U.S. Trust's Rivals Over Estate Still Putting Up Their Dukes

U.S. Trust Corp.'s proposal to settle the Doris Duke estate may not end its woes.

Last week, the bank filed a settlement proposal in New York State Surrogate's Court hoping to clear some legal hurdles so it can get the $1.2 billion estate admitted to probate and eventually into the hands of beneficiaries. The court must approve the settlement agreement.

But U.S. Trust opponents for control of the estate that were not party to the tentative settlement continue to have some beefs with the bank.

Bank of New York Co., Chemical Bank, and three beneficiaries still want to have U.S. Trust removed as co-executor of the estate and are girding for battle in the wake of the settlement proposal.

"The surrogate has basically given everybody who ever had an interest in this case until the end of April to submit papers on the proposed settlement agreement," said Charles E. Rappold, executive vice president and chief trust officer of The Bank of New York.

"Then there's going to be a hearing on it in early May. It's our present intention to prepare papers," Mr. Rappold said.

Chemical also is getting ready to weigh in against the proposed settlement. "We're studying the papers," a bank spokeswoman said.

The banks still have legal standing to fight U.S. Trust over the Duke estate because they were named as co-executors in different previous versions of Ms. Duke's will.

In late January, both the Bank of New York and Chemical Bank - now a subsidiary of Chase Manhattan Corp. - raised legal objections to the tobacco heiress' 1993 will naming U.S. Trust a co-executor of the estate.

Three former servants who are beneficiaries of Ms. Duke are still concerned that U.S. Trust has performed poorly as an executor. With that premise in mind, their attorney, Raymond J. Dowd, is more perturbed that the bank be allowed to propose a settlement.

"Two courts found U.S. Trust unfit and a third court ordered that there be a hearing on their fitness," Mr. Dowd said. "How can there possibly be a settlement when there hasn't been a hearing held on their fitness? It just doesn't make sense."

Under the settlement, the bank would become sole executor, ridding itself of an embarrassing association with controversial co-executor Bernard Lafferty, Ms. Duke's spendthrift former butler.

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