NEW ORLEANS — New Orleans Saints and Pelicans owner Tom Benson and trustees for his estranged heirs have ironed out legal and structural sticking points of a settlement that has been in the works since last June, avoiding a federal trial that was scheduled to begin on Monday.
Attorney Thomas Flanagan, who represents one of the trustees, said Friday he was informing the court that the parties had reached the confidential agreement, which allows Benson to avoid the likelihood that proprietary financial information sensitive to the NFL and NBA would become public record in court.
The 89-year-old Benson and the trustees had already agreed on the framework of a settlement removing shares of the pro teams from trusts set up for Benson’s daughter, Renee, and her two children, Rita and Ryan LeBlanc. However, the sides still had to mutually accept technical details regarding how settlement payments would be made and guaranteed.
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“This has been a long and difficult time and we are pleased this is behind us,” Benson said in a statement released by the Saints. “We have many great projects ahead and look forward to them. In addition, we continue to strive for our number one goal and that is winning championships in football and basketball.”
The trustees called the settlement “a winning proposition for the City and people of New Orleans and fans of the Saints and Pelicans everywhere.”
“The New Orleans Saints are among the elite, iconic franchises in professional sports, and the Pelicans are making their mark as a highly competitive and successful franchise in its own right, as well as an important part of the fabric of the City of New Orleans,” the trustees said in a statement. “Keeping these two teams in New Orleans and ensuring their future vitality has always been the highest priority for the family beneficiaries and the trustees. We are optimistic about the future success and prosperity of these two franchises.”
The Saints and Pelicans have politically sensitive leases to play in state-owned stadiums, allowing the clubs to pay negligible rent while keeping virtually all revenues they generate through tickets, concessions, parking, sponsorships and naming rights. As a related inducement, state offices have paid above-market rents to operate out of a Benson-owned office tower next to the Superdome.
A trial was bound to shed more light on what kind of deal the teams are getting to play in the Superdome and neighboring basketball arena, as well as details about their various revenue streams. Benson also was expected to be compelled to testify; he was on a witness list submitted by attorneys this week.
In January 2015, Benson announced he no longer wanted his daughter and her children to inherit shares of his pro clubs, and that he intended to replace those shares in the trust with other assets. Benson also stated at that time that he intended to leave the NFL and NBA teams fully in the hands of his third wife, Gayle, whom he married in 2004.
Benson fired his daughter and her children from executive positions with the clubs. Three lawsuits followed in state courts in Texas and Louisiana, and in U.S. District Court in New Orleans. The Texas case was settled in January 2016.
The federal lawsuit settled Friday involved the initial rejection by trustees of Tom Benson’s proposed asset swap. Benson sought to substitute more than $500 million in mostly promissory notes — some of which would not have come due for more than two decades — in place of non-voting shares in his two pro teams and other businesses interests.
The trustees — Robert Rosenthal and later Mary Rowe — who are required by law to protect the interests of the trust beneficiaries, had said they did not believe Tom Benson had properly demonstrated he was offering a fair swap of assets. Tom Benson then sued in federal court in an attempt to compel the trustees to approve the swap.
At the time the family strife began, the heirs’ trusts held more than 90 percent of Pelicans non-voting stock and more than half of Saints non-voting stock.
Benson bought the Saints for about $70 million in 1985 and the Pelicans for $338 million in 2012. Financial publications in the past year have estimated the value of the Saints at more than $1 billion and the Pelicans at more than $600 million.
Perhaps the most contentious of the lawsuits took place in civil court in Louisiana. In that case, the estranged heirs asked a judge to rule Tom Benson mentally incompetent. The lawsuit centered on allegations that Gayle Benson and an inner circle of Saints and Pelicans executives have manipulated an enfeebled Tom Benson into ostracizing his daughter and grandchildren, who have long been the heirs apparent to the a more-than $2 billion business empire that includes the two pro teams, auto dealerships, a television station and real estate.
After a trial that was closed to the public, Judge Kern Reese ruled that while Benson sometimes exhibited the forgetfulness or impairment that is common among people his age, he remained aware of the consequences of his actions and therefore fit to continue overseeing his own affairs.
Because the estranged heirs have sought to demonstrate to the public Tom Benson’s alleged mental fragility, they might have preferred a trial, which also would have provided them a venue to communicate with their Patriarch. However, the trustees who settled the case with Tom Benson were only legally bound to protect the heirs’ financial interests, somewhat insulating them from the family drama.
None of the settlements or rulings preclude the heirs from contesting Tom Benson’s will after his death.
Information from The Associated Press and ESPN’s Mike Triplett was used in this report.
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