When Sol Goldman’s widow died two decades ago, the children agreed to divide ownership of the family’s multibillion-dollar real estate fortune among themselves in four equal parts.
The problem is, now that there’s a power struggle between the family members, no one can remember exactly what it was they agreed to.
The dispute is focused on control of SG Windsor, a holding company that owns interests in Solil Management and a key LLC in the web of hundreds of entities that makes up the Goldman family empire.
“After Lillian died in August 2002, Jane, Diane, Amy, and Allan treated themselves as equal members of SG Windsor, with each receiving a 25 percent member interest,” read an opinion issued last week by a Delaware judge overseeing part of the family feud.
“There are no documents establishing the transfer of interests in SG Windsor to the siblings,” Judge J. Travis Laster wrote. “No one remembers how that was accomplished. It just happened.”
For 35 years following Sol Goldman’s death in 1987, his eldest daughter Jane ran the family company day-to-day while sharing ownership with her three siblings: Diane, Amy and Allan.
After Allan died in 2022, his son Steven Gurney-Goldman tried to assume more control. When Jane refused, he challenged her grip on the company.
The main issues there were whether SG Windsor is managed by Jane or managed by its members — i.e., she and her siblings — and whether or not Steven counts as a member.
Following a one-day trial in May, Laster late last week denied Steven’s request for injunctive relief prohibiting his aunt from making important decisions for the company without his approval. He also ruled that while Jane manages the company in the colloquial sense, from a legal perspective she still shares management with her siblings.
The case revealed the informal ways the company had been run for decades.
When lawyers for the Goldmans set up the SG Windsor entity, they didn’t create an LLC agreement that spelled out how it would be managed. According to Delaware law, in the absence of such an agreement the LLC is automatically managed by its members, not by a sole manager.
The burden of proof was on Jane to show that her siblings at some point appointed her the legal manager, either through an oral agreement or practice. In the end, the court said Jane failed to do so.
“Jane conceded that she could not recall any discussion or agreement about SG Windsor being a manager-managed entity with Jane as one of the managers,” the decision read.
Both sidesing
What the decision means for the company going forward is a point of disagreement for both sides.
While the judge ruled that this key LLC is managed by its members, he opined that Steven — as executor of his father’s estate — is not one of them. The judge did rule that Steven can exercise certain rights when it comes to administering his father’s properties, but the two sides disagree on the scope of those rights.
Steven’s attorney, Ryan Rakower at Quinn Emanuel, said he was pleased the court ruled Jane is not the appointed manager.
“Mr. Gurney-Goldman looks forward to exercising his father’s governance rights for the purpose of administering his father’s property and settling his father’s estate,” he said.
Jane’s attorney, Jason Cyrulnik of Cyrulnik Fattaruso, said the court made clear that Steven’s authority is “limited to statutory executor rights — which Jane has never denied him.”
“The court further recognized that Jane Goldman has managed the Goldman family real-estate empire and carried on her father’s legacy since his passing in 1987, and that everyone including her family knew it,” he added. “Ultimately, the plaintiffs’ senseless lawsuit — filed as a tactic in their self-described ‘war’ to try to unfairly squeeze money out of the family business for themselves — was a fruitless effort.”
Any major disagreement about the extent of Steven’s rights might require more litigation.
The Delaware case could affect a related New York case in which Steven has challenged the valuation process of the family portfolio.
Web of LLCs
The scope of the fortune at stake alone makes the Goldman dispute a must-watch case. But it also provides an unfiltered view into how one of real estate’s most private families operates.
Their arrangement can be maddeningly lax.
“Today, the Goldman family business involves literally hundreds of entities,” read Laster’s opinion. “The record suggests that the Goldman family has not always observed entity formalities by maintaining a strict division between the property manager and the property owners. Who does what in what capacity seems fluid.”
For years, Jane and Allan made major decisions regarding the company, and there was an understanding that they would consult with Diane and Amy.
According to the judge’s decision, when Allan died, Jane saw herself as the lone decision maker, but Steven hoped to take over his father’s role co-managing the business with his aunt.
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When she rebuffed him, Steven teamed up with his aunt Amy to form a bloc that could try to deadlock the LLCs jointly managed by the aligned Jane and Diane.
“[Jane] felt that Steven — like her own similarly aged son — was too young to take on a major decision-making role,” Laster wrote. “Jane acknowledged that she and Allan, when similarly callow, had taken on managerial roles after Sol’s death, but necessity had forced the issue. Jane felt that because she remained at the helm, there was no reason to integrate the next generation so quickly. Steven did not like that answer, and his relationship with Jane came under strain.”