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Judge backs new trustees’
avoidance of state suit

Pursuing former trustees could harm
the estate, the probate court rules

By Rick Daysog
Star-Bulletin

The interim Kamehameha Schools trustees do not have to participate or assist the attorney general's attempt to recover tens of millions of dollars from the estate's former trustees, a state judge ruled today.

Probate Judge Kevin Chang also said that interim trustees do not have to file a separate surcharge suit against ex-board members Henry Peters, Richard "Dickie" Wong, Oswald Stender, Gerard Jervis and Lokelani Lindsey.

The order upholds the findings of court-appointed special master Michael Tanoue, who said in a July 10 report that the interim trustees should not jeopardize the estate's $75 million insurance policy by taking part in the attorney general's surcharge suit against the estate's former trustees.

The interim trustees previously petitioned the probate court for instructions over concerns that their participation in the state's suit may lead to the loss of their insurance coverage.

The attorney general's suit, set for trial on Sept. 18, alleges that the former board members took excessive compensation, mismanaged trust money and incurred more than $200 million in investment losses.

Mel Miyagi, an attorney for the interim board, said his clients would like to see the attorney general's office succeed but argued that their hands are tied.

If the interim board were to take part in the suit, there would be no insurance to cover any of the claims arising from the suit, Miyagi said.

The attorney general has argued that the interim board has not cooperated with the state's requests for information and is allowing the trust's insurance policy to dictate the trustees' fiduciary duty.

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Bishop Estate Archive
Kamehameha Schools