Judge to Approve Settlement in $1.2-Billion Duke Estate Battle

NEW YORK â€”  A Surrogate’s Court judge in Manhattan said Tuesday that she will approve a plan to finally send Doris Duke’s $1.2-billion estate to charity--and end one of the biggest will fights of the century.

Culminating a week of behind-the-scenes negotiations, Judge Eve M. Preminger told lawyers in the case that she will consent to a revised settlement to conclude a 2 1/2-year battle fought by some of the nation’s largest banks, law firms, armies of private detectives and the tobacco heiress’ ponytailed former butler, Bernard Lafferty.

Lafferty, who was named executor of Duke’s estate under her contested 1993 will, agreed to resign that position and play no role in the Doris Duke Charitable Foundation in return for a $4.5-million executor’s fee and the $500,000 yearly bequest provided for him by the heiress.

“It’s been rough. It’s been the roughest time of my life. I never thought I’d see the end,� said Lafferty, who faced a barrage of allegations from former Duke servants and others challenging the will--accusing him of everything from being an alcoholic spendthrift to murdering the 80-year-old Duke with overdoses of drugs.

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“The reason why I step aside is because it will let the money go to the charities that Miss Duke wanted, [instead of] lawyers and all these people wanting to get big fees by keeping this case going,� Lafferty said.

Just last week, the judge refused to approve an earlier settlement reached by the major parties in the case, complaining that it allowed “obscene� yearly fees of up to $300,000 to be paid to the trustees of the Duke foundation--and that it did not preclude Lafferty from a future role in the charity.

Under the deal Tuesday, the foundation board will be enlarged from six to seven members--to add a “nationally recognized� medical expert--and the yearly fees cut so that trustees get no more than $128,000. In addition, the judge will review future appointments to the board of what will be one of the nation’s most powerful charities.

After indicating that the changes satisfied her concerns, the judge set a hearing for this afternoon to officially ratify the settlement.

One seat on the board will go to the New York physician who led the will challenge, Dr. Harry B. Demopoulos, a “longevity� and vitamin specialist who treated Duke for years and once was in line to be her executor, but was written out of her final will.

“I do believe it’s a victory,� said one of Demopoulos’ attorneys, Don Howarth. “Our goals were to get Lafferty out [and] Harry in.�

The settlement, however, leaves in place three trustees originally proposed by Lafferty: Nannerl O. Keohane, the president of Duke University, which is named for the heiress’ father; J. Carter Brown, former chairman of the National Gallery of Art in Washington; and Marion Oates Charles, a society friend of Duke’s.

The other seats will be taken by John J. Mack, president of the Morgan Stanley investment banking firm, and New York lawyer James Gill, who led Gov. George Pataki’s effort to dismantle the Long Island Power Co.

Those members will name the final trustee requested by the judge, the medical expert, and appoint an executive director to oversee day-to-day operation of the foundation, which Duke created to benefit such causes as Islamic art, historic preservation, AIDS research and animal rights.

Although Lafferty in the past expressed frustration that the tangled case was costing the estate millions in legal fees and delaying formation of the foundation, he praised the judge Tuesday for helping limit future fees to Demopoulos and others who will direct the charity.

While admitting it was “painful� to play no role in the board himself, Lafferty said he was pleased with his financial settlement.

The hearing today is expected to be brief, but one party pledged to protest the settlement--Raymond Dowd, a New York lawyer representing three former Duke servants who have issued sensational allegations in the case, including the claim that Duke was murdered.

Duke, the only child of James Buchanan Duke, founder of the American Tobacco Co., died in October 1993 at her gated home above Beverly Hills. The fight over her will was waged here because it was filed for probate in Manhattan.

Authorities in Los Angeles still are investigating the allegation that doses of morphine and Demerol killed the heiress, who gained fame earlier in the century as “the richest girl in the world.�

The challenge to Duke’s last will originally was led by Chandi Heffner, the woman Duke adopted a decade ago and then tried to disown. But Heffner gave up her claims in return for a $65-million settlement from the estate.

Goldman reported from New York and Lieberman from Los Angeles.