Appeal from the Circuit Court of Cook County; the Hon. GEORGE
N. LEIGHTON, Judge, presiding. Affirmed.
MR. JUSTICE ENGLISH DELIVERED THE OPINION OF THE COURT.
This is a consolidated interlocutory appeal, pursuant to Supreme Court Rule 307(a)(1), from two orders granting preliminary injunctions restraining payment by the American National Bank & Trust Company, as escrow agent, to two trusts (hereafter the "Sugarman Trusts"). Previously, on motion of plaintiffs Roxanne Louise and Scott Avery Keeshin, the court had entered summary judgment in their favor and against defendant Nathan Sugarman on the issue of liability for breach of fiduciary duties with respect to two trusts (hereafter the "Keeshin Trusts") of which those plaintiffs are beneficiaries. A similar motion by plaintiff Marcelle Keeshin had been denied.
The following statement of facts is taken from appellants' brief, with only irrelevant or argumentative comment deleted:
"(a) Background of the 1961 Settlement. Alex Greenberg died in December, 1955. The principal assets of his estate consisted of controlling shares of stock in two corporations, Seneca Hotel Company and Canadian Ace Brewing Company. *fn1 Alex's daughter, Ida Schultz, and his sons-in-law, Allen Schultz (an attorney) and Nathan Sugarman (a professor of chemistry at the University of Chicago), were named in the will as co-executors and as co-trustees of three separate testamentary trusts each of which being for the primary benefit of one of Alex's three daughters, Goldie Sugarman, Ida Schultz and Marcelle Keeshin. Among its other provisions, the will provided that majority decision among the three co-executors or co-trustees should control.
"Almost from the beginning of administration, conflicts arose between Ida and Allen Schultz, on the one hand, and Nathan Sugarman, on the other. These conflicts led to the proceedings for appointment of independent counsel for Nathan Sugarman which are described in the opinion of this Court in In re Greenberg's Estate, 15 Ill. App.2d 414. As set forth in that opinion independent representation was ultimately denied by this Court.
"Thereafter there was intensification of the conflict between Nathan Sugarman and his co-executors relating to a variety of issues, two of which are directly relevant to the present litigation. Nathan Sugarman desired that Canadian Ace begin to pay dividends in view of its increasing profitability. Allen and Ida Schultz (who were two of the three directors of Canadian Ace, the third director not being a party to the present proceeding) insisted that all profits be reinvested in the brewery, and in this policy they were vigorously supported by Marcelle Keeshin and her husband, Sanford, who, after the death of Alex Greenberg, had become an officer and second highest salaried employee of Canadian Ace. Further conflict arose over the question of whether Alex Greenberg's estate had a valid claim against Sanford Keeshin for a sum in excess of $49,000 representing, in Professor Sugarman's opinion, a loan by Alex Greenberg to Sanford Keeshin. Marcelle and Sanford Keeshin joined Ida and Allen Schultz in resisting this claim.
"Shortly before January, 1961, . . . litigation was commenced by certain owners of Seneca Hotel stock concerning the consequences attendant upon termination of the voting trust into which a controlling block of Seneca stock had been placed. On January 10, 1961, a proposal was made to Nathan Sugarman on behalf of Allen Schultz whereby the three testamentary trusts would purchase all Seneca Hotel stock not owned by the Greenberg family. Nathan Sugarman . . . made a counterproposal whose essence was that the Sugarman trusts sell their shares in Canadian Ace and Seneca Hotel.
"(b) 1961 Settlement. Nathan Sugarman's counter-proposal led to a meeting on January 13, 1961, attended by Nathan Sugarman, Allen Schultz, Louis Biro (a partner of Allen Schultz) and Theodore and Moses Levitan (attorneys representing Nathan Sugarman). At that meeting, an agreement was reached whereby the Sugarman family would be enabled to sever its financial involvement with the Schultz and Keeshin families.
"The salient provisions of that agreement were as follows. The 400 shares of Canadian Ace stock owned by the Sugarman Trusts and the 200 shares owned by Goldie Sugarman, individually, would be sold to Canadian Ace for the aggregate price of $1,000,000 payable over 15 years. The Seneca Hotel shares owned by the Goldie Sugarman Testamentary Trust would be sold to Canadian Ace for $332,550 payable over 15 years, although it was subsequently determined that such a purchase might exceed Canadian Ace's corporate powers and, therefore, Allen Schultz, individually, and the Keeshin and Schultz Testamentary Trusts were substituted as purchasers. All claims of Alex Greenberg's estate against Sanford Keeshin would be released. Nathan Sugarman would receive $35,000 for services as co-executor. . . . Ida and Allen Schultz would resign as co-trustees of the Goldie Sugarman Testamentary Trust and Allen Schultz would resign as co-trustee of the Goldie Sugarman Living Trust. Nathan Sugarman would resign as co-trustee of each of the four Keeshin and Schultz Trusts. The adult beneficiaries of the six trusts involved, and their spouses, would execute, on their own behalf and that of their descendants, releases and indemnification agreements to the resigning co-trustees.
"The foregoing agreement was implemented in March and May of 1961. Pursuant to an escrow agreement dated May 26, 1961, the periodic payments for the Canadian Ace and Seneca Hotel stock were made to the American National Bank, as escrow agent, which would deposit the moneys to the accounts of the Sugarman Trusts.
"(c) The Present Litigation. Six years later, in May, 1967, after Canadian Ace had suffered a decline in fortunes, a complaint was filed on behalf of Marcelle Keeshin and her two children, then both minors, Roxanne Keeshin and Scott Avery Keeshin. The complaint sought to set aside the 1961 settlement. In January, 1969, after Roxanne Keeshin had attained her majority, additional counsel filed an appearance in her behalf and a guardian ad litem was appointed for Scott Avery Keeshin, still a minor.
"In March, 1969, the discovery deposition of Nathan Sugarman was taken, and . . . a motion for summary judgment against Nathan Sugarman `as to liability' . . . was filed on behalf of [Roxanne Keeshin and on behalf of Scott Avery Keeshin by his guardian ad [item.] . . . Thereafter a similar motion was filed on behalf of Marcelle Keeshin. The affidavit of Nathan Sugarman, setting forth essentially the facts contained herein, was filed in opposition to the motion.
"On June 23, 1969, the summary judgment motion of Marcelle Keeshin was denied, but that filed on behalf of Roxanne and Scott Avery Keeshin was granted as of June 13, 1969. . . . Temporary injunction orders were entered on June 13, 1969 and July 31, 1969 [re Canadian Ace and Seneca, respectively] restraining payment by the American ...