Heirs Battle Over $1-Billion Estate in New York : Mother Pitted Against Children for Ownership of Goldman Properties

During his life, Sol Goldman established a reputation as a hard-bitten businessman. Over four decades, the Brooklyn grocer’s son clawed his way up New York’s real estate ladder by playing hardball with rivals, evicting tenants and demolishing buildings. Armed with an infectious smile that cloaked a consuming drive, Goldman enjoyed boasting of his ambition to be “the richest man in the world.”

When Goldman died in 1987 at age 70, he left behind a thriving real estate kingdom and a bitter family feud over his $1-billion estate. It pits Goldman’s four children against their mother and Goldman’s son Allan against his daughters.

At stake is the future ownership of the massive Goldman property holdings, some of the world’s largest. In New York City, where Goldman once owned the landmark Chrysler Building, his estate controls 10,000 apartments, hotels and clusters of buildings all the more valuable because they stand in the path of future development.

It is the richest estate ever fought over in New York Surrogate Court, which probates wills. By comparison, the previous record-holder, the Johnson & Johnson drug company legacy, was worth a mere $500 million, about half the value of the Goldman estate.

With fortunes riding on the battle’s outcome, knives are being sharpened and charges are flying. Goldman’s son and his three sisters are seeking to negate their mother Lillian’s claim to a third of her husband’s estate. Allan’s children, Stephanie and Cindy Goldman, allege in court papers that their father, once imprisoned as an alimony scofflaw, may be trying to chisel on their inheritances from their grandfather’s estate by overcharging them for educational and living expenses.

“He was charming, intelligent, mean,” Lillian Goldman, 67, said of her husband in a recent interview. “None of us dared cross him. Nobody wanted to incur his wrath. He would make life impossible for you. Verbally. Mentally. You didn’t get away from him. You were his possession . . . . I was his possession and I dared to leave the house.”

That decision may well cost her tens of millions, perhaps hundreds of millions, of dollars before the current estate fight is over. Her predicament dates from 1983 and the day she moved out of her husband’s suite at the Waldorf Astoria Hotel. They had been married for 42 years, their union producing four children: Allan, Diane, Amy and Jane.

At the time, Sol Goldman was ill, undergoing dialysis treatment for kidney problems. Only a few years earlier, when the city’s real estate market collapsed, his real estate empire had teetered on the brink of ruin.

Goldman’s problem was that he financed new purchases by piling debt on properties he already owned.

In the mid-1970s, however, the value of those properties suddenly plummeted. For instance, Goldman and his lifelong business partner, Alex DiLorenzo Jr., defaulted in 1975 on their most prestigious possession, the Chrysler Building.

Goldman was spared ruin as New York real estate rebounded in the early 1980s. But his wife says the strain of living with her husband became too much.

“They (my children) are angry because they say I walked out on their father,” she says. “I didn’t walk out. I ran. I ran for my life.”

She ran straight to her attorney, the late and controversial Roy Cohn of McCarthy hearings fame, who in October, 1983, filed a divorce action against her husband on the grounds of cruelty and inhuman treatment.

Sol Goldman, faced with the prospect of losing half of his $1-billion real estate empire in a divorce, offered his wife a deal. If she dropped the action, he would give her $6 million, buy her an apartment and leave her a third of his estate outright when he died. The value of that share: $333 million.

In April, 1984, Goldman’s offer was drafted by Raoul Felder, his lawyer, and Cohn. All parties signed. And for the moment, the Goldmans’ marriage appeared spared.

One week later, however, Lillian Goldman says she discovered a letter from Cohn to Felder while looking for theater tickets in her husband’s coat. In it, Cohn complained bitterly that Goldman was trying to bargain down the $300,000 legal fee he expected to $100,000.

The letter read in part: “After the job we did for the Goldmans--including saving Sol’s exposure to 3 or 400 million dollars equitable distribution, I was shocked and deeply hurt that he would offer me $100,000 for all these months of work.”

Lillian Goldman saw red. She repudiated the recent pact and, alleging that Cohn’s letter showed that the lawyer had conspired with her husband to dupe her into the agreement, filed suit, asking that the reconciliation agreement be nullified. She also moved out, never living with her husband again.

In late 1987, however, state Supreme Court Justice Kristin Booth Glen upheld the contract, saying the Cohn letter did not represent a conspiracy.

Died Soon After Verdict

Sol Goldman’s courtroom victory was brief. He died 26 days after the verdict. And the earth had barely settled over his grave when the dispute over the reconciliation agreement flared anew.

The new battle was between Lillian Goldman and her children. The reason was the terms of Sol Goldman’s will, which leave his ex-wife her one-third share in trust rather than outright, as promised in the reconciliation agreement. That’s the difference between $333 million in hand under the reconciliation pact or just the interest on that sum, with the principal remaining in the estate until she dies. The bulk of the estate has been left to Goldman’s four children.

The resulting legal fracas centers on what document will determine Lillian Goldman’s share of her late husband’s estate--his will or the reconciliation agreement.

Goldman’s widow has filed suit to block probate of his will and says she wants the reconciliation agreement she challenged enforced. Her children claim that she should be cut out of the will entirely. Their allegation is that, because Lillian abandoned their father, she doesn’t legally qualify as his “surviving spouse.”

Allan Goldman, 45, and his sister Jane are executors of their father’s estate. In that capacity, Allan holds the purse strings to the millions bequeathed to his daughters, Stephanie and Cindy, from whose mother he was divorced years ago. Although now a millionaire many times over, Allan failed to meet his financial obligation toward his children in the past.

In 1973, he was briefly imprisoned after failing to pay $5,005, approximately one year’s support for his children, in back alimony payments, court records show. A 1973 court affidavit signed by Sol Goldman seeking his son’s release stated that Allan “has been under psychiatric care and I am fearful that the strain of being incarcerated for any length of time will aggravate his condition and potentially result in a complete crackup.”

Lillian Goldman says her son never really was able to step out from his father’s shadow.

To young Cindy Goldman, it is all a game of power, much like the one her grandfather once played against tenants, employees, business rivals and his own family. In the Goldman clan, she says, money was always used to control people, doled out when they behaved, snatched away when they didn’t.

“All these years,” Cindy wrote her father last fall, “you were waiting around for your father to die so that you could finally achieve the wealth and power that you had been dreaming of. I too was waiting around for my father, not to die, not to inherit money, but to fulfill his true role as my father. But for some reason I have a feeling that I’m going to be waiting around a lot longer for my wish than you ever did.”