Appeal from the Circuit Court of McLean County; the Hon. James
A. Knecht, Judge, presiding.
JUSTICE MILLS DELIVERED THE OPINION OF THE COURT:
"Family Feud" goes to the theatre.
A brother and sister at an impasse over the sale of trust property — the Normal Theatre.
The trial court authorized the sale.
The trustee sought authority to sell the Normal Theatre — the sole asset of a trust — against the wishes of the present beneficiary, whose acquiescence is required by the terms of the trust before the realty can be sold. After a bench trial, the trial court entered an order authorizing the sale and respondents Sylvan L. Kupfer, Jr., and Mary Jane Kupfer appeal.
The evidence below was uncontroverted. In 1965, Ruth M. Kupfer, by her will, created two trusts, one of which was for the benefit of her son, Sylvan L. Kupfer, Jr., for a period of 21 years after her death. Upon termination of the trust, the assets were to be distributed one-fourth to Sylvan, one-fourth to Mary Jane Kupfer (Sylvan's wife), and the remaining one-half to be divided equally among Sylvan's children. The sole asset placed in the trust was Ruth's one-half interest in the Normal Theatre (the Theatre). (Ruth had previously transferred the other one-half interest in the Theatre to her daughter, Joan E. Kupfer.) The trustee was not to sell the Theatre without the consent of Joan and Sylvan.
Ruth died in 1965. American State Bank was named as trustee in the will and has administered the property by leasing it to Kerasotes-Rialto Theatre Corporation (Kerasotes). Kerasotes notified the trustee that it no longer wishes to lease the Theatre. An installment sale contract was negotiated among Kerasotes, Joan, and the trustee. Under its terms Kerasotes would purchase all of the Theatre's personal and real property for $150,000, to be paid over 10 years after a 10% down payment, with interest on the unpaid balance accruing at 12%. Sylvan refused to agree to the sale and the trustee petitioned the circuit court of McLean County for instructions, with Sylvan, Mary, Joan, Melissa Kupfer (Sylvan's adult and sole child) and the unborn children of Sylvan, named as respondents. A guardian ad litem was appointed for the unborn children.
The petition for instructions alleged that no tenants other than Kerasotes could be obtained for the premises, and that absent a tenant, the trustee could not pay insurance premiums or real estate taxes on the premises, and as a result thereof, might lose the sole asset of the trust estate.
At trial, James Drake, attorney for Kerasotes, testified that his client had no interest in the Theatre as a tenant and was continuing the lease on a month-to-month basis until its purchase offer was formally accepted or rejected. Kerasotes invests in downtown theatres only when they are in good locations and can be expanded into two-plex or three-plex theatres. Kerasotes is only interested in making such an investment in property which it owns. Downtown theatres have been closing rapidly, partially because of their inability to share in the economies of a multi-screen operation.
Gary Riss, a real estate appraiser, testified that the replacement cost approach to the appraisal of the building would result in an appraised value of between $112,000 to $115,000 for the property. There would have to be extensive remodeling for the building to have a use for any other type of commercial purpose. The sloping floor would have to be changed to a level floor. There would have to be interior partitions, heating, ventilating, electrical and plumbing work done. His estimate of the cost range was $25,000 and up. He further testified that in his opinion the potential sale price would be less than his appraised value if the property were to be sold by the sheriff at a partition sale.
Joan testified that if the Theatre was not sold according to the proposed contract for purchase, she would bring a partition suit so that she could sell her one-half interest in the property. Her share of the rent is her primary income and would not allow her to make payments for taxes and insurance on the property if the lease with Kerasotes ran out. Neither could she pay her share of any remodeling costs.
She further testified as to her familiarity with the motion picture business, and that the trend has been to fewer and fewer independent theatres with chains buying out independent theatres or the theatres closing down. She did not know of any possible tenants for this property. The building was constructed in 1937 and has always been leased to a chain. Five different chains were contacted in an attempt to negotiate a lease. None of these contacts resulted in any interest. Joan said she was not willing to sell her interest to Sylvan on the same terms as she would be willing to sell to Kerasotes, because Kerasotes is a corporation with financial resources and stability and that she would only consider a chain because of the nature of the theatre business.
David Sullivan, a trust officer for the petitioner, testified that the will of Ruth Kupfer provided for two trusts, the Sylvan L. Kupfer, Jr., trust and the Melissa Kupfer trust. The only asset in ...