Feisty Horsewoman on the Trail of the Mighty Irvine Co. Says She Got the . . . : Last Laugh
She was a millionaire by birth, a horsewoman by choice, a gadfly by inclination. But what she was not, says Joan Irvine Smith, was a woman who was taken very seriously, not by the men who ran the Irvine Co., the vast barony her great-grandfather founded.
“I had years and years of people saying, ‘Now dear, don’t worry about your assets, we’ll take care of them for you. You just have a good time,’ ” she remembered.
Over the years she married four times, gave birth to three sons, raised horses for fun and profit. And she battled the Irvine Co., at board meetings and public hearings. When it came to her family birthright, Smith wouldn’t be brushed off, or married off, or bought off.
Through the years her business opponents tried to match her up romantically, she said, figuring that would get this pesky woman out of their hair.
“It’s a joke,” she said. “Every time you turn around, you find somebody running some man in on you. . . . They figure if you are a woman, they can get you sidetracked. It is the male ego. They think a woman can’t possibly function except on an emotional basis and ‘if we can find her the right man, we will just have her right where we want her.’ ”
As it turns out, they never did get her right where they wanted her. Last week a Michigan court referee decreed that the giant development company pay Smith and her mother, Athalie Clarke, $149 million for their share of the company they agreed to sell in 1983 to Donald L. Bren, the company chairman.
The award ended a lengthy and complex lawsuit and left both sides claiming victory. The Irvine Co. reasoned that the amount was far less than the $330 million Smith was asking; Smith noted that it was 31% more than the $114 million Bren offered her in 1983. Once the court totes up the interest and decides who pays the lawyers, the award is expected to hit at least $250 million.
Within days of the award, a fit and relaxed Smith granted a rare interview at her oak tree-studded ranch to reminisce about the past and consider what her money might bring.
One of her favorite stories has been how years ago she “embarrassed” the Irvine Co. into adopting a master plan for development of its extensive agricultural landholdings, which once spanned a fifth of Orange County, and donating the land for the campus that became UC Irvine.
Now, with her millions, she offers: “There are a lot of things that can be done in medical research. . . . I am still very interested in doing something for the University of California, Irvine.”
For years she has pushed for an on-campus teaching hospital at UCI, despite the presence of such a hospital off campus now and despite the opposition of the local medical community. Will she push the project again? “We’ll see,” she laughed.
Another project will be to expand her business of breeding, training, showing and selling top thoroughbred horses, not only at the 22-acre Orange County ranch but also at her spread in Virginia.
In fact, she wore pants and boots for a riding tour of her Orange County operation, the Oaks, after the interview. The stable’s tack rooms and offices blaze with colorful prize ribbons, and the ranch landscape was bedecked with plants and flowers that she buys by the truckload.
Smith, 57, her hair now a mixture of gray and blond, is a woman of great energy who rises at 5 a.m., retires at midnight and talks with incessant urgency in her voice.
Always a minority shareholder and the only female member on the company’s board of directors, Smith has used whatever method was available--including the courts, Congress and the press--in a fight to protect her inheritance and make known her opinions. And she says she will not “let up one inch until I have my money in the bank.”
So she continues to attend meetings of city councils, county supervisors and water boards, and to bombard Irvine Co. executives and government officials with synopses of the meetings and cover letters that she types herself--a regimen she has followed for 13 years, accompanied in recent months by Skippy, a small brown-spotted dog that she nursed back to health after it was hit by a van.
Smith recalled that last January when she fell from an unruly horse and dislocated the knuckles of her left hand, she took care of the injury herself by using some veterinary painkillers and other remedies at her stable. “I wasn’t going to go to the doctor and have him tell me I had to have it wrapped up,” she said. “I had to keep typing with the damn thing.”
Smith traces her battles with the company that has been her nemesis for decades right back to the time she took a seat on the firm’s board of directors. The year was 1957. She was 24.
Her grandfather had died in 1947, and the foundation he set up to run the company after his death had a board with a few directors she believed were trying to use the company to enrich themselves. So she fought. In the 1960s, fed up with low dividends the Irvine Co. was paying on her stock, Smith lobbied Congress for seven years before winning passage of tax legislation in 1969 that forced the foundation to sell its controlling interest in the company.
In 1975, she sued to block the foundation from selling the Irvine Co. to the Mobil Oil Corp. for $200 million. As it turned out, that suit was a scene-setter for a bidding war in 1977, which ended with Smith and others buying the company themselves for $337.4 million.
The sale was hailed across the nation as a victory for Smith, proof her claims that the Mobil bid was far too low were correct. But there was a downside, too. Smith said the new owners forced her to reduce her ownership of the company from 21.1% to 11%, though she did receive $76 million for the stock she sold.
This forced Smith to give up her dream of gaining control of the company by taking it public, while still being its single largest shareholder.
“It would have been the best thing that ever could have happened because if you could have given the people of Orange County an opportunity to invest in the Irvine Co., it could have made a lot of the development easier,” she said. “But the foundation didn’t want that.”
And after the 1977 sale, Smith had to contend with Bren, the powerful, debonair local builder who had his own plans for gaining control of the company. In 1983, Bren bought out his other partners for $560 million, valuing the entire company at $1 billion. Smith’s share came to $114 million. After failing in court to block Bren’s bid for controlling ownership of the company, Smith decided to sell all her shares and get out.
The only matter left to be settled was how much money she would get. She took Bren to court in Michigan, where the Irvine Co. is incorporated, when his original offer was, in her opinion, too low.
The company argued that Smith had no basis for questioning the business judgment of the other shareholders, which included the likes of automobile baron Henry Ford II, shopping center magnate A. Alfred Taubman and Herbert Allen, a prominent New York investment banker.
But Smith says the judge’s decision proves that her challenge “was not a frivolous lawsuit.” Because she is a woman, Smith said, she never has been taken seriously by her business associates.
She lugged out a large scrapbook, plunked it on a patio table and opened it to reveal newspaper clippings that chronicled her battles with the Irvine Co. for more than three decades. The photographs accompanying many of the stories, some of which appeared in foreign publications, showed that it was Smith’s glamour-girl looks and audacity, as much as what she had to say, that drew attention. “Dazzling Blonde to Sue for Million,” said one headline.
In fact, Smith has sacrificed much of her personal life to do what she felt was necessary to protect her legacy.
She said that her last marriage to Morton (Cappy) Smith, a horseman, ended because of the tremendous amount of time she spent away from their home in Middleburg, Va., to attend to her lawsuits against the company.
“I did what I had to do,” recalled Smith, who is still a business partner and close friend of her ex-husband, who operates her farm in Middleburg.
More recently, Smith’s self-appointed role as Irvine Co. watchdog has made her something of a prisoner, unable even to visit her horse farm in Virginia. It was her need to have some diversion from 12-to-18-hour workdays over the past 13 years, Smith said, that led her to develop her South Orange County horse ranch, where she spends most of her spare time.
But now Joan Irvine Smith is on the verge of finally breaking free and gaining personal control of her business affairs and her fortune. “You can’t imagine how much I am looking forward to it,” she said. “I want to be in control of my own destiny.”
Smith’s feisty personality is often compared to that of her late grandfather, James Irvine Jr., known as J.I., who defended his ranch against trespassers and the railroad, at gunpoint if necessary. But she says she is certain her grandfather would approve of her decision to sever her ties with the land rather than remain a minority player. “My grandfather was in a control position with the company. He wasn’t there in a minority position. He wouldn’t have tolerated it,” she said.
By contrast, at her ranch Smith is in command. She has hired two trainers and is striving to create a stable of champions, maybe even a future Olympics entry or two. She also is trying to give the sport of show jumping a higher profile on the West Coast. For five springs Smith and her mother have hosted the Oaks Classic, a jumping extravaganza and fancy bash that attracts top-notch thoroughbreds from around the country as well as the cream of Orange County society.
Smith stables 40 of her horses at the ranch, about 14 of which she said she has added since last fall in anticipation of a resolution of her lawsuit. Also, she has plans to build a house on the ranch and to begin some much-delayed improvements on her farm in Virginia. When loose ends on the litigation are tied up, she will be freer to travel and to enter horses at shows on both coasts. She plans to ride some of them herself.
Further down the trail, Smith intends to write a book about her life, which she expects to be highly controversial. “When I get around to it, it is going to be about the litigation and the intrigue and a lot of things that a lot of people aren’t going to want to have exposed,” she said. She also muses that “making a movie of it would be fun. But it would have to be toned down for prime-time showing.”
As to possible additional plans for the money, she is reticent, except to speak of the possibility of business opportunities with social import. She said she has gotten very interested in the field of toxic waste cleanup. But she doesn’t want to say too much until she actually gets the cash.
When the day comes, she said, she intends to ride to the bank with the check on a horse who has grown old and swaybacked waiting for the chance. The horse’s name? “Last Laugh.”
