Settlement in Ford Family Feud Collapses

WEST PALM BEACH, Fla. — A last-minute settlement in a family feud over the $350-million trust left by auto magnate Henry Ford II broke down in court Monday.

The hearing before Palm Beach Circuit Judge Vaughn Rudnick pitted Ford’s widow, Kathleen DuRoss Ford, against the late auto maker’s son, Edsel Ford II, and other family members, as well as trustee William Donaldson.

Kathleen Ford had complained that Donaldson, an ally of Edsel Ford, was demanding a $1-million-a-year salary to administer the trust and that he had threatened to cut her income to the minimum level of $1.5 million.

Early Monday morning, 14 attorneys for both sides worked out a compromise that was to remain secret.

Robert Montgomery, one of four attorneys representing Kathleen Ford, said only that under the settlement, Donaldson would remain a trustee, a new lawyer would be appointed as the trust’s attorney and a financial adviser would be appointed.

But a question over whether a legal guardian should be appointed for Ford’s minor grandchildren created a furor, and the whole settlement collapsed.

$1-Million Salary

Ford, who died Sept. 29, 1987, took control of Ford Motor Co. in 1945 from his frail and failing grandfather, auto pioneer Henry Ford.

He named Kathleen Ford as sole beneficiary of his trust but stipulated that upon her death, his six grandchildren would become the beneficiaries.

He named three people to manage the trust--Kathleen Ford, Edsel Ford and family friend Martin Citrin. In April, Citrin killed himself.

Ford’s choice for an alternate trustee was Donaldson, 57, an investment banker, former undersecretary of state and founder of the Yale Graduate School of Organization and Management.

Citing his expertise, Donaldson requested a $1-million yearly salary for managing the trust. Kathleen Ford said his request amounted to extortion and sued to have him removed.

Kathleen Ford’s income is more than $10 million a year, an attorney said.

On Wednesday, a judge will hear a motion to dismiss the $5.4-million claim on the estate brought by Cristina Ford, whom Ford divorced in 1980 before he married Kathleen DuRoss later that year.

The divorce settlement left her with $100,000 in quarterly payments for 20 years. She contends that since Ford died, the payments have stopped. She has sued for the full 20-year amount.