Irvine Co. Paints Smith’s Suit as a ‘Whim’ : Closing Arguments Start With Slash at Granddaughter of Founder
In more than 5 hours of closing arguments, attorneys for the Irvine Co. criticized heiress Joan Irvine Smith for failing to appear in court during the lengthy trial that will determine the value of her stake in the company founded by her grandfather.
“Not only did she elect not to testify at the trial, but never once set foot in the courtroom during the entire 17 months of trial,” Irvine Co. attorney William B. Campbell said.
“Obviously, she had nothing to say in support of her case,” he said. “Just as obviously, there is no way she could explain her arbitrary, bad-faith conduct in forcing this lawsuit.”
Repeating much of the evidence presented during the past 17 months, Campbell said the trial came about “to indulge the whim of very wealthy woman who could afford to inflict the expense and inconvenience of such a proceeding on the Irvine Co. at no inconvenience to herself.”
The court must decide how much Smith’s 11% interest in the Irvine Co. was worth when Donald L. Bren offered her $110 million for her shares in 1983. Smith agreed at the time to sell, but contended her shares were worth $330 million, which touched off a lawsuit and the trial.
In his closing statement, Campbell suggested that she receive just $88 million rather than the $500 million she is seeking, which includes interest since 1983.
Conspicuously present during the closing arguments was Bren and senior vice president Gary Hunt. Hunt attended much of the trial. Bren was present during the opening statements and appeared later as a witness for about 10 days.
“I’m here because I’m keenly interested in the lawsuit and the valuation and the outcome of it,” Bren said.
“I’m saddened by the fact that so much time and energy has been taken away from the corporation. Many of the senior executives have come out and spent time here when all of us could, in fact, have been doing something more productive than this lawsuit.”
The trial was held in Michigan because the Irvine Co. is incorporated here.
In summation, Campbell noted that 30 other Irvine Co. shareholders sold their stock to Bren in 1983, giving him control of the real estate development company, which is an indication that he offered Smith a fair price for her stock.
Detroit shopping mall magnate A. Alfred Taubman, oilman Max Fisher and New York financier Herbert Allen Sr. were among those shareholders who decided to accept Bren’s offer.
“Taubman, Fisher and Allen are not people who make billion-dollar mistakes,” Campbell said. “They said, ‘This is the best I’m going to get, and I’m not going to get any better offer,’ because they knew the marketplace.”
Campbell referred to Fisher’s testimony in the case and quoted him as saying: “I felt it was a good opportunity and a good price. That is how I appraise deals.”
Campbell added that no one would have sold their shares to Bren if they had thought a better deal was available someplace else.
Addressing the judge, Campbell said that defense attorneys are “trying to convince you that you should give them money that the marketplace can’t give them.”
Referring to the experts called by the defendants, Campbell said, “We have listened to the better part of a year why three experts think they know better than the actual investors about the issue.”
The experts to whom he referred are economist Michael Tennebaum, real estate consultant Stephen E. Roulac and real estate appraiser Robert H. Flayvell.
“Tennebaum felt he had better judgment and instincts than the people who spent 5 years actively involved in the company, those who eventually sold their shares,” Campbell said.
“You can give $1 million to oilman Max Fisher to invest, or to Tennebaum. Who will give you the best return on your money? This is what the case is all about.”
Smith’s attorneys were scheduled to present their closing arguments today. A decision, which can be appealed, is not expected until spring.
Shawn D. Lewis is a free-lance writer in Detroit.
