Tulsa judge orders bank to repay $18 million to Skelly trust
BY ZIVA BRANSTETTER World Enterprise Editor
Wednesday, October 10, 2012
10/10/12 at 4:28 PM
Document: Read the ruling here
A Tulsa district court judge has ordered J.P. Morgan Chase Bank to repay $18 million to a trust benefitting the granddaughter of oil baron W.G. Skelly, after finding that Chase sold the elderly widow complicated investments that earned up to $2 million in fees for the bank and its employees.
Tulsa District Judge Linda Morrissey’s ruling Tuesday concluded that Chase’s actions were “grossly negligent and reckless.” The bank’s employees “disregarded the clear and unequivocal expression by Mr. and Mrs. Skelly, who placed their confidence in a corporate trustee,” Morrissey’s ruling states.
The ruling also authorized punitive damages against Chase, to be determined in a hearing set for Dec. 11, records show.
Doug Morris, a J.P. Morgan spokesman, said: “We disagree with the court’s decision and will take all appropriate measures to respond, including appealing the decision.”
The ruling orders Chase to pay $18 million to the Carolyn S. Burford trust. The sole beneficiary of the trust is Ann Fletcher, 74, the granddaughter of W.G. and Gertrude Skelly.
W.G. Skelly founded Skelly Oil Company and Gertrude Skelly had ties to Mobil Oil. The Skellys are considered as one of Tulsa’s founding families.
Upon Fletcher’s death, half of the trust is to be distributed to her children — Carolyn Briggs and Marianne Borgono — and the other half to the Oklahoma Annual Conference of the United Methodist Church, the ruling states.
Morrissey’s ruling states that $18 million is the value of more than 200,000 shares of ExxonMobil Corp. stock sold by the trust at the bank’s urging. The funds were used to purchase complicated investments known as “variable prepaid forward” contracts.
Expert testimony showed that the bank earned up to $2 million in profit from the contracts while the trust’s principal declined $1.8 million by the time the bank resigned as co-trustee in 2006.
Meanwhile, the bank increased payments to Fletcher from $25,000 per month to $33,000 per month, the ruling states.
Fletcher’s husband died in 1997 and she lives in a Southampton, N.Y. condominium, the ruling states. She requires “live-in help to handle the household affairs, including paying bills and handling communications,” it states.
It states that Fletcher has been diagnosed with acute stress syndrome, depression and has “limited comprehension.”
Read the complete story in Thursday’s Tulsa World.
Tulsa oilman W.G. Skelly. Tulsa World File