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Billionaire Conrad Prebys’s Son Gets $15M after Being Disinherited

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Conrad Prebys
San Diego real estate developer and philanthropist Conrad Prebys.

Debra Turner, the longtime live-in partner of San Diego developer and philanthropist Conrad Prebys, has tried to sue the directors of the Conrad Prebys Foundation for their decision to give $15 million to Prebys’ son, Eric, who had been left nothing by Prebys in his estate planning documents.

The San Diego Union-Tribune reported in the article “Court fight continues over control of $1 billion Prebys estate,” that in January, a San Diego Superior Court judge dismissed Turner’s suit, holding that she had no legal standing to bring it. She then filed an amended complaint. However, recently the judge dismissed her lawsuit.

The legal fight has kept the estate money from going to the charities favored by Conrad Prebys. During his lifetime, he donated more than $350 million to various organizations – most of them in the San Diego area.

Turner says the issue arises from the foundation board’s decision to disregard Prebys’ wishes and give money to his only child, a physicist at UC Davis, who had been written out of the legal documents in 2014.

“When Conrad made a decision, it was done, and he was adamant about revoking Eric’s gift,” Turner told The San Diego Union-Tribune in 2017.

Prebys died in 2016, and his trust left gifts to twelve individuals and institutions. The bulk of his assets were left to to his foundation to “support performing arts, medical research and treatment, visual arts, and other charitable purposes” consistent with the causes he cared about when he was alive. However, a few months after his death, the foundation directors – five unpaid volunteers handpicked by Prebys – met to consider the next steps. The directors included Turner and Laurie Anne Victoria, a longtime executive with Prebys’ real-estate company. Victoria is also the trustee of the Prebys estate.

According to Turner’s lawsuit, a foundation attorney had warned the directors that Eric might contest the will, and if he won, he could “get it all.” Several weeks later, Eric’s attorney indeed sent a letter to the board, raising questions about Conrad’s mental competency at the time that the trust was amended. Eric also believed that Turner had exerted undue influence on his father’s decisions. Turner denied the allegations. But in December 2016, the other directors authorized a settlement. Eric got $9 million, plus $6 million to cover the estate taxes.

Turner then sued the board members on behalf of the foundation, alleging they had breached their duties to protect the estate’s assets.

Victoria defended the settlement as “the only reasonable decision” to avoid the uncertainty, expense and publicity of litigation with Eric and to begin fulfilling Conrad’s charitable wishes. She said the money represented less than 1% of the overall estate.

Turner is no longer on the board, and in dismissing her suit, Superior Court Judge Kenneth Medel said that, under corporate law, Turner can’t sue on behalf of the foundation because she’s no longer a director and, thus, lacks standing. Although she was a director when she filed the suit, the law requires her to maintain board membership throughout the litigation, according to the decision.

Reference: The San Diego Union-Tribune (March 29, 2019) “Court fight continues over control of $1 billion Prebys estate”

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