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Use of Scaife trust for newspapers, charity was not a waste, attorneys assert

Keith Srakocic/Associated Press

Use of Scaife trust for newspapers, charity was not a waste, attorneys assert

If the daughter and son of Richard Mellon Scaife wanted to stop him from spending a trust fund on newspapers, they should have piped up long before the account was emptied and their father was dead, a trustee argued in court papers filed Monday.

Two trustees filed answers to objections lodged early this month by Jennie Scaife, 51, of Florida, and David Scaife, 49, of Shadyside, who believe that $450 million was improperly drawn from an 80-year-old trust fund.

The daughter and son “were aware for many years prior to 2014 that substantial distributions were being made from the 1935 Trust to be used to support their father’s media properties,” wrote attorneys for trustee H. Yale Gutnick, who is chairman of the Tribune-Review newspaper’s board. Since they didn’t object then, they can’t cry foul now, according to the answer.

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Attorney Dennis A. Watson, representing David Scaife, said the son and daughter “acted promptly under the circumstances” and faced no “set specific time” during which they had to act on any earlier knowledge that the trust fund was being depleted. The two filed their initial petition in November, four months after their father’s death.

Richard Mellon Scaife divided most of his assets — often estimated at $1.4 billion — between the Sarah Scaife Foundation and the Allegheny Foundation.
Rich Lord
Scaife’s daughter seeks to invalidate billionaire’s will

The 1935 Trust was set up by Sarah Mellon Scaife, mother of Richard, to support his welfare. The daughter and son were to receive anything that was left in the trust upon their father’s death, but it dwindled over time, and shortly before his July 4 passing, the balance reached zero.

Mr. Gutnick denied the contention by the daughter and son that he told them, in 2008, that the trust would contain “a specific amount” upon their father’s death. The two have said that they were led to believe that they would get a total of $90 million from the trust.

Most of the money drawn from the trust over 20 years went to support the Tribune-Review media family, which the daughter and son have characterized as “a waste.”

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According to Mr. Gutnick’s answer, the use of the trust to support newspapers and some philanthropy advanced Mr. Scaife’s “two salutary life passions, to wit, his media properties and charity.”

Fellow trustee James M. Walton filed a similar answer. The answer from PNC, the third trustee, was not available Monday afternoon.

In May, the trustees disclosed 20 years of distributions from the 80-year-old trust fund. The daughter and son then asked the court to order the trustees to pay them an unspecified sum, alleging that they breached a duty to preserve some of the funds.

The dispute is before Orphans Court Judge Kathleen A. Durkin, who has allowed discovery to begin and has scheduled a Feb. 25 status conference.

Jennie Scaife has also challenged the validity of her father Richard Mellon Scaife's will, which mentioned neither the daughter nor son.
Rich Lord
Richard Mellon Scaife’s son objects to subpoenas issued by trustee

Rich Lord: rlord@post-gazette.com

First Published: June 29, 2015, 7:26 p.m.
Updated: June 30, 2015, 4:27 a.m.

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Richard Mellon Scaife  (Keith Srakocic/Associated Press)
Keith Srakocic/Associated Press
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