Knott battle could be over

Representatives of mother's estate dismissed, but feud continues

December 17, 2006|By Nicole Fuller | Nicole Fuller,sun reporter

Knott family legal battle might be over, but family still feuding A recent court decision to dismiss two siblings from the prominent Baltimore Knott family as representatives of their late mother's estate could end the legal battle over millions of dollars that were slated for the family's foundation but were instead donated to charities.

But by most accounts, the family feud will rage on.

In the latest turn of events, Patricia K. Smyth and Francis X. Knott, who were appointed as representatives of the estate, were relieved of their duties by an order from the Orphans' Court of Baltimore City. According to the court's findings, the two "have mismanaged funds entrusted to them in a fiduciary capacity." Another sibling, Martin G. Knott, will succeed them.

"This is a real tragedy as far as I'm concerned," said Margaret K. Riehl, another sibling, who estimated she and others spent about $200,000 in legal fees to protect their parents' interests. "The family has been decimated. I take no great pride in the fact that they were removed. But I'm glad that they were. In my mind, they betrayed my parents' trust."

The dismissed estate representatives declined to comment on the matter, but in the past have said they had both the authority and moral obligation to fulfill commitments to charities their parents had planned to contribute to from the estate before their deaths.

In what might be the last Knott family gathering of the children of multimillionaire developer and philanthropist Henry J. Knott Sr. and his wife, Marion I. Knott, on Thursday, eight of the 10 surviving siblings met at a storage facility in Linthicum to divvy up their mother's items, including "a sleigh-back chair from Mother and Daddy's bedroom" and "the bronze Lion and Lioness," as ordered by the court.

More like a lottery drawing than a family meeting, each was given a number, dictating the order in which they could choose from their mother's belongings. At the gathering, described as "tense," none of the children left with items totaling more than $8,600.

Henry J. Knott Sr., who as a developer amassed a fortune estimated at more than $150 million before his death in 1995 was a generous man, by all accounts. His humble beginnings as a bricklayer and his Catholic education -- at Loyola High School at Blakefield and later Loyola College -- almost certainly informed his philanthropy.

In 1977, he established the Marion I. and Henry J. Knott Foundation and through it donated tens of millions of dollars to educational, cultural and health institutions in Baltimore. In 2005, the foundation contributed $1.2 million to charity and lists its assets in its latest filing as $61.8 million.

In their wills, filed in Baltimore Circuit Court, the Knotts bequeathed their estate, "after the payments of all debts, expenses, taxes, charitable pledges ... and other charges," to their foundation. But Patricia K. Smyth, Francis I. Knott and another brother, Henry J. Knott Jr., who has since died, donated $17 million from the elder Knotts' estates to charities -- many of which the Knotts had long contributed to. Francis I. Knott replaced Henry J. Knott Jr. as an estate representative after he died.

The contributions included $7.5 million to the Johns Hopkins University in 1999; $2.5 million to Loyola High School in 1998; and $1.75 million to Loyola College in 1996. The donations continued. On May 12, 2003, they contributed $300,512 to St. Mary's Seminary and University, according to court records.

In a February 1996 memorandum, lawyers involved in the Knotts' estates warned Patricia K. Smyth and Henry J. Knott Jr. not to donate any more money to Loyola College without discussing the matter with the foundation's trustees. While the elder Knotts had donated to those institutions in the past, the amounts were usually less than $100,000 and drew from interest on the foundation's assets.

It wasn't until 2003, when their mother died, that six of the children filed suit requesting an independent personal representative be named to investigate any actions taken on behalf of their mother by the special administrators during her life and after her death. They also requested a hearing on her "testamentary capacity" and the validity of the will and its codicil.

In March 2004, attorneys for the foundation, Sandra P. Gohn and William E. Davis, filed a confidential executive summary in which they said that Henry J. Knott Jr., Patricia K. Smyth and, to a lesser extent, Francis X. Knott "breached their obligation of loyalty and impartiality," in diverting the money from the foundation. But, they said, "They did so with no intent to benefit themselves financially; in truth, their motivation is unclear."

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