The Key Players and Money In The Murdoch Legal Drama
Ben Thomson, LawFuel contributing editor
The media world – other than the Murdoch-owned media – is abuzz with the latest chapter in the Murdoch family saga, as a Nevada courtroom becomes the stage for a high-stakes succession battle involving the media patriarch and his family.
Rupert Murdoch, the 93-year-old patriarch of a global media empire, is seeking to alter the terms of his family trust, created back in 1999 following his divorce from his second wife Anna, in a move that could reshape the future of Fox Corporation and News Corp.
The trust was created as irrevocable, but with a clause that permitted Murdoch snr. to amend the trust to ensure that his empire is kept without dissenting voices from Lachlan’s more left-leaning siblings.
Rupert Murdoch’s key driving factor is to keep the business together and moving in a conservative direction. A family-controlled business is unlikely to achieve either outcome in his view.
The Core Issue
At the heart of this legal drama is Rupert Murdoch’s attempt to amend an irrevocable family trust established in 1999 and whether his attempts to make the required amendment is in good faith and for the benefit of all beneficiaries.
The current trust structure would divide voting shares equally among his four eldest children upon his death – something that Murdoch wants to change to provide his eldest son Lachlan with the majority control, but with a distribution of bountiful monies for his other children.
However, Murdoch is now pushing to grant his eldest son, Lachlan, majority control.
Key Players in the Drama
- Rupert Murdoch: The media mogul seeking to change the trust.
- Lachlan Murdoch: Current CEO of Fox Corp and Rupert’s chosen successor
- James, Elisabeth, and Prudence Murdoch: Rupert’s other children opposing the change
Assets at Stake
The trust controls a 40 percent voting stake in both News Corp and Fox Corp[2]. These companies encompassing Fox News, The Wall Street Journal, The Times, The New York Post and various broadcast and sports network interests.
The combined market value of these assets runs into billions of dollars, making this one of the most significant media succession cases in recent history.
Legal Proceedings
The case is being heard in a Nevada probate court, known for its strict confidentiality laws, where it has focused on trust law and its ‘dynasty trust law’ jurisdiction.
Probate Commissioner Edmund J. Gorman Jr. is presiding over the proceedings, which began on September 16, 2024.
Despite efforts by media organizations to make the trial public, the court has largely denied these requests, keeping most documents sealed. This level of privacy is typical in Nevada for family trust cases, even when they involve publicly traded companies.
Legal Hurdles
The primary legal challenge lies in the nature of the trust itself. Irrevocable trusts are designed to be difficult to modify, typically requiring either the consent of all beneficiaries or a court order.
To succeed, Rupert Murdoch must demonstrate that he is acting in good faith and the changes are for the benefit of his heir and not others.
The nature of irrevocable trusts and the significant legal and political implications for the Murdoch empire create the high-stakes issues that the Nevada court needs to unravel in the face of intense legal arguments from some of the country’s top ‘Succession’ lawyers.
Potential Outcomes
The court’s decision could have far-reaching implications:
- If Rupert prevails: Lachlan would gain exclusive control, likely maintaining the conservative editorial stance of Fox News and other Murdoch outlets, which obviously have significant implications (maybe signalling one reason for William Barr’s involvement);
- If the siblings win: A potential power struggle could ensue, possibly leading to editorial shifts or even the sale of certain assets, as the objectives and political stance of all family members remains opaque, at best;
- Compromise scenario: There’s a possibility of a settlement, though previous talks about James, Elisabeth, and Prudence selling their stakes have reportedly failed, however anything must be ‘on the cards’ in the case like this and the attorneys are well known to handle high-level settlements.
Legal Representation
The involvement of high-profile legal teams suggests that both sides are prepared for a potentially lengthy and complex legal battle over the Murdoch empire.
Gary A. Bornstein, (pictured) the co-head of litigation at Cravath, Swaine & Moore, the firm that top’s LawFuel’s ‘most prestigious law firm list’, is representing the three Murdoch siblings (James, Elisabeth, and Prudence) who are opposing the move by their father.
By sharing legal counsel, the three siblings present a united opposition to Rupert Murdoch’s proposed changes. This coordinated approach strengthens their position and streamlines their legal strategy.
Bornstein’s litigation experience suggests that the siblings are prepared for a potentially lengthy and complex legal battle, ready to pursue all available legal avenues to protect their interest. Cravath’s involvement may also signify the ability to achieve a settlement, given their experience in settling complex personal and corporate disputes.
William Barr, former U.S. Attorney General in the Trump presidency (pictured) is leading Rupert Murdoch’s fight to change his trust. Barr works Torridon Law, a law firm he established with former Facebook General Counsel Ted Ullyot in 2022.
Along with Barr is Sheppard Mullin litigator Adam Streisand, a lawyer who has vast experience and a high success rate when it comes to ‘Succession’ style battles, as his law firm bio says –
If you’ve seen it on HBO’s “Succession,” Adam Streisand has litigated it (and much more) in real life. Celebrities, musicians, pro sports franchises, athletes, and some of the world’s wealthiest individuals and families turn to Streisand for battles over inheritance, fiduciary conduct and business succession. While Streisand is known for his sweeping victories in high-profile courtroom battles involving celebrity estates, he has also become the go-to trial lawyer whenever the fate of a national sports franchise is on the line, including trust wars over control of the LA Lakers, LA Clippers, LA Chargers and Baltimore Orioles. Sheppard Mullin
Broader Implications
For lawyers and legal professionals, this case highlights several intriguing aspects of trust law, including the ability to modify irrevocable trusts and the role played by probate courts in high-stakes succession planning.
The case also serves to highlight the importance of careful estate planning, particularly for high-net-worth individual with complex business interests.
The outcome of this case in Reno could set precedents for how similar high-profile succession disputes are handled in the future, making it a landmark case in the realm of trust and estate law.
It will also identify a real-time ‘Succession’ drama involving a media empire intersecting with politics and the law in a way that only Rupert Murdoch might achieve.
