$200 million settlement in Scaife trust case approved

An Allegheny County judge has approved the $200 million settlement proposed in January to resolve the long-running court battle between billionaire Richard Mellon Scaife’s heirs.

Common Pleas Judge Joseph K. Williams III approved the settlement in an order dated Dec. 23 in Orphans’ Court. The case dates to 2014, when Scaife died and a trust fund’s principal of more than $400 million had been depleted.

“There is nothing special about this case,” Judge Williams wrote in a memorandum. “That is, if you look at it from a strict, procedural perspective.

“Normalcy ends with this case at the door of procedure. It begins anew with money. Lots of money. Like nine-digits-totheleft- of- the- decimal- point money,” he wrote.

The trust fund was originally set in place in 1935 by Richard Scaife’s mother. After his death, his children, David N. Scaife and the late Jennie Scaife, were beneficiaries of the trust.

They claimed the trustees — PNC Bank, James M. Walton and H. Yale Gutnick — had improperly handled the money in

order to prop up the Tribune Total Media company owned by Richard Scaife. The trustees argued they had acted in good faith and within the law.

While Richard Scaife’s son, grandson and two of the fund’s three trustees agreed in January to the $ 200 million settlement, which is coming from Richard Scaife’s estate, they did not agree on the income the trust would have generated had the principal not dried up, leaving the court to come up with such a number. (Ms. Scaife’s estate was originally left out of this agreement and opposed it, but the estate changed counsel and accepted it in October.)

The court decided that David Scaife and Jennie Scaife’s estate will split nearly $46.7 million. The rest of the money goes back to the trust and, therefore, to David Scaife.

There also is an ongoing federal case that began earlier this year, brought by Ms. Scaife’s estate against the fund’s trustees, but PNC Bank and the other trustees moved to have the case dismissed and continued in Allegheny County Orphans’ Court. That motion is pending.