Judge Orders Adamson Sisters to Notify Widow of Real Estate Actions : Malibu: But judge rejects request for a receiver to manage the affairs of the key landowning company.
Amid claims by Sharon Adamson that the company her late husband headed until his death in 1986 has been mismanaged by his sisters, a judge has ordered that she be notified before the Adamson Cos. attempts to sell or mortgage any of its real estate.
However, Superior Court Judge Bonnie Lee Martin last week rejected a request by the widow of Merritt Adamson that a receiver be appointed to manage the company’s affairs.
Instead, Martin ordered that the company, one of Malibu’s largest landowners, provide Sharon Adamson written notice at least 10 days in advance of trying to sell or encumber any of the firm’s properties.
The request represents the latest skirmish in a legal battle between Adamson and her sisters-in-law, Sylvia R. A. Neville and Rhoda-May Dallas, for control of a family fortune estimated to be worth at least $75 million.
At Thursday’s hearing, an attorney for Sharon Adamson argued that unless the court intervened, there was a grave threat that the company’s properties may be dissipated before her lawsuit against her sisters-in-law comes to trial in October.
“We had hoped that the judge would have granted us more relief, but we’re pleased with what we received,†attorney Hillel Chodos said.
Lawyers for the Adamson Cos. also expressed pleasure at the outcome, and said the firm is financially strong and well-managed. “A lot of what you heard (from the other side) was pure histrionics,†company attorney Thomas K. Houston said.
Besides offering a rare glimpse of a family feud between wealthy heirs, the dispute has attracted widespread interest in Malibu because it comes at a time when the firm is trying to build a $65-million, 300-room luxury hotel overlooking the Pacific Ocean there. Sharon Adamson is opposed to the project.
Some slow-growth activists have also expressed misgivings, saying that they would like work on the hotel to be delayed until Malibu becomes a city.
The company, which last month announced it has joined with the Sazale Corp., a Japanese firm, in a bid to develop and manage the hotel, still needs final approvals from the California Coastal Commission before construction may begin.
In what could be its last major bureaucratic hurdle before starting work on the project, the firm is scheduled to go before the Coastal Commission Wednesday in Eureka for approval to grade the 27-acre hotel site near Pepperdine University.
If granted, the company could begin construction as soon as Los Angeles County receives final approval from the Coastal Commission to start work on its proposed $43-million sewer system for Malibu, Houston said. The state panel approved the hotel plan in 1986, on the condition that the county’s sewer system be installed before the hotel could operate.
“The financing has basically been arranged,†Houston said. “The whole deal would be ready to go as soon as the county gets (the commission’s) OK for the sewer, and we’re optimistic that may occur as early as November.â€
The county wants to start work on the sewer before a new city government has a chance to block it. Although voters overwhelmingly approved cityhood in June, the Board of Supervisors has delayed the actual incorporation until next March. Cityhood backers, who failed to get a state appeals court to nullify the delay, have filed an appeal with the California Supreme Corut.
Although the company’s hotel plans have attracted public attention, the personal stakes are far higher for the heirs in their fight to control what is left of an almost century-old land empire.
At issue is an agreement Merritt Adamson signed with his sisters shortly before he died, giving them future control of the company and leaving his widow with little say in its affairs.
Under the arrangement, the sisters became sole general partners when their brother died, enabling them not only to control their own stake in the company, but the one-third of the firm’s shares Sharon Adamson owns.
In her lawsuit, Sharon Adamson, along with her two adult children, Grant Adamson and Leslie London, contends that the agreement should be invalidated since, by signing it, her husband made a gift of the couple’s community property.
The suit seeks to have the sisters removed as trustees of the one-third of the company Sharon Adamson owns, but does not control. She accuses them of being inept managers who have nearly ruined the firm.
Neville and Dallas, meanwhile, have filed suit against Sharon Adamson, accusing her of interfering in the firm’s affairs. If they prevail in having the agreement enforced, Adamson would be prevented from having a say in the company’s affairs.
The firm’s financial health has become an issue since company officials disclosed in pretrial testimony that as of last month it had run out of cash and was unable to pay the more than $1 million it owes to creditors.
In their testimony, company officials said they were considering obtaining a mortgage on the Point Dume Club, a luxury mobile home park on 91 acres of Malibu oceanfront that provides more than half the firm’s income.
On Thursday, company attorney John R. McDonough said the firm had acquired a $5-million line of credit from a bank with which to pay its creditors and that there were no plans to mortgage any of its properties.
“He (attorney Chodos) has made a lot of charges, but no one has presented a single piece of evidence to prove that the company has been mismanaged,†McDonough said.
However, Sharon Adamson’s attorney remained sharply critical of the company’s management, and said he found it astonishing to learn recently that the company had decided to sell 10 acres in Malibu’s Civic Center area, which had been on the market for $3.5 million, to developer Jerry Perenchio, a principal in the Malibu Bay Co., for $2 million.
“These people can make a lot of deals like that between now and October,†Chodos said. “And they can give themselves bonuses, congratulate each other, and the next thing you know, the money is gone.â€
He accused the company of being top-heavy with executives, and singled out Olaf Isachsen, a former consultant hired recently to advise Neville at an annual salary of $400,000. Isachsen’s contract provides for $400,000 in severance pay should he be discharged for any reason.
“They’re looking at $3 million in just fees--lawyers, architects, engineers,†Chodos said. “They’ve got more advisers than Carter has pills.â€
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
