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Tuesday, July 26, 2016

Dispute over trust funds in the Atlanta-based family behind Orkin Pest Control is headed for a jury trial

An illustration of the Rollins family
(From forbes.com)
A dispute about trust funds in one of the South's wealthiest families will go to a jury trial. A trial court in Atlanta had dismissed claims from four adult grandchildren of the late co-founder of Rollins Inc., but a Georgia appellate court found the case presents issues of fact that should be presented to a jury.

Rollins Inc., the parent company of Orkin Pest Control, is headed by billionaire brothers Gary W. and R. Randall Rollins. They are the sons of the late O. Wayne Rollins, who founded the company with his brother, the late John W. Rollins Sr.

The plaintiffs in the court case are Gary Rollins' children. They claim their father and uncle engaged in bad-faith actions that deprived them of access to trust accounts.

Why does the case, which has been litigated for six years, have special interest here at Legal Schnauzer? We explained in a December 2014 post:

The John Rollins side of the family is based mostly in Delaware and the Carolinas, and it includes Ted Rollins, who recently was removed as CEO of Campus Crest Communities. Ted Rollins has been the subject of numerous posts here at Legal Schnauzer, mainly because of his central role in a grossly unlawful divorce case in Shelby County, Alabama, from his second wife, Birmingham resident Sherry Carroll Rollins. Also, Ted Rollins has student-housing developments at four Alabama campuses (South Alabama, Troy, Jacksonville State, and Auburn), even though he has a criminal conviction for assault from the brutal beating of his stepson.

Ted Rollins is not directly involved in the Georgia lawsuit, but the controversy involves billions of dollars and attracted the attention of Forbes magazine, with reporter Clare O'Connor producing a major investigative report. What will be at stake at trial? The Daily Report, of Atlanta, reports:

"This case turns on claims of breach of fiduciary duty and breach of trust," (appellate judge William Ray II wrote). "A jury could find evidence of bad faith." 
Orkin owner Rollins died in 1991, leaving an estate that Forbes magazine estimated to be worth $8 billion. If Forbes was correct, the 11 heirs— two sons and nine grandchildren—stood to inherit more than $700 million each.

In 2010, four of the grandchildren—Glen, Ruth, Nancy and O. Wayne II—sued their father, Orkin CEO Gary Rollins, and their uncle, Chairman R. Randall Rollins. The younger generation accused their father and uncle of manipulating accounting records, making improper investments and setting a subjective conduct-based standard for inheritance. They contended the restrictions violated their grandfather's directions to share equally.

After the trial judge's initial decision in favor of the father and uncle on all but one claim, both sides appealed. This was the third trip to the Georgia Court of Appeals on various issues. The most recent review was ordered by the Georgia Supreme Court, which prescribed a different standard of review for the conduct of the father and uncle.

"Even evaluating Gary and Randall's actions under the more lenient partnership standard (as opposed to the more stringent trustee standard), a jury could find evidence of bad faith," Ray wrote.

The appellate ruling means Rollins family business practices likely will be exposed to the public in a way that never has happened before::

H. Lamar Mixson of Bondurant, Mixson and Elmore, lead counsel for the grandchildren, called the decision an important victory for his clients.

"The bottom line is the court of appeals correctly recognized factual questions that must be decided by a jury," Mixson said. "We look forward to that as soon as possible."

Instead of their full inheritance at age 45—and partnership in the Rollins Investment Fund—as prescribed by their grandfather, Mixson said his clients "got paper and no money" on their birthdays. After they filed their lawsuit, Mixson said they were "cut off entirely" from their trust disbursements. Also, he said, Glen Rollins was fired from his job as president of Orkin.

The case boils down to a battle over an estate estimated at $8 billion. That should make for an interesting jury trial.


Anonymous said...

I bet this case never goes to trial.

Anonymous said...

Each heir was to get $700 million? Wow, that is some serious loot.

Anonymous said...

Can you imagine the legal fees in a case like this, when it's dragged on for six years? Lord, Lord!!

Anonymous said...

Maybe Rollins family has made so much money off cockroaches that they are starting to act like cockroaches?

Anonymous said...

The illustration is worth a good chuckle!!!