The Miami Herald

Inherit The Whirlwind
Previous Deal With Son Set In Motion Challenges To Millionaire Posner's Will

Mimi Whitefield and Elaine Walker
Miami Herald

The seeds of the battle over Victor Posner's estate were planted when the late tycoon and corporate raider agreed to settle a lawsuit with his son Steven, who claimed his father had cheated him out of millions of dollars in trust payments.

Steven and his father had been battling for more than a decade. In a gesture befitting Posner's brash business style, they agreed to divvy up the assets to be included in Steven's settlement by tossing a golden dollar coin before a Miami-Dade Circuit judge.

The younger Posner won the toss and chose the first property from the portfolio of Security Management Corp., Posner's main holding company. He selected a 71 percent interest in a 9.8-acre tract in Hallandale Beach.

Victor picked next and so it continued until seven properties had been chosen by Steven. Though terms of the settlement, which was signed in the spring of 2001, weren't made public, sources say they netted Steven real-estate holdings worth an estimated $100 million.

In exchange, Steven gave up any future claim on Posner's estate. ''He's quite satisfied,'' said his lawyer, Harris Buchbinder.

NEW WILL

That agreement, however, set off a chain of events culminating in a new will signed on June 28, 2001, and filed with the court Feb. 11 -- just hours after Posner succumbed to pneumonia at the age of 83.

It named Posner's business associate and former girlfriend, Brenda Nestor Castellano, his chief beneficiary, while leaving nothing to three of Posner's four children or any of his grandchildren.

The new will didn't go over well with some of the Posner relatives. Steven's twin sister, Gail, and Posner's former attorney Marty Rosen quickly sued, claiming Nestor exerted undue influence over a weak and befuddled Posner when he signed the new will. Instead, they claimed the court should recognize the 1996 will that Rosen drafted.

Last week they agreed to a settlement with Nestor, who is married to Bobby Castellano but uses Nestor as her business name. Terms of that settlement were sealed by the court.

But Steven Posner's three adult children -- Jarrett Posner, Sean Posner and Dr. Kelly Posner-Gerstenhaber -- continue their quest to have the 2001 will thrown out.

''It's about justice and doing the right thing,'' Posner-Gerstenhaber said. ``It's not about money.''

But it's clear that a great deal of money has always been at stake when it comes to Victor Posner. His immediate family is provided for in more than a dozen trusts that are worth as much or more than the probate estate, estimated at over $195 million.

''The will was only one component to transfer wealth to his family,'' friends and business associates, said Tom Schultz, one of Nestor's attorneys.

LEGAL BATTLES

Through the years, the trusts have been the source of much hard-fought litigation, and the weeks after Steven's settlement were tumultuous ones for Victor Posner and his business empire:

• Shortly after the settlement, Rosen -- who did corporate and tax work for Posner and set up trusts for the Posner family -- met with attorney Milton Ferrell in an attempt to reach a similar settlement on Gail Posner's behalf.

But Rosen claims the discussions never got far because Ferrell, Schultz's partner and now attorney for the Posner estate, wanted Gail Posner to agree to a settlement similar to the one her brother had received.

However, under the 1996 will Gail would have been the chief beneficiary of her father's estate. Since Steven got nothing in the 1996 will, Rosen felt she was entitled to more.

''We were conciliatory if there was a reasonable offer on the table, but that was not an acceptable offer,'' Rosen said. "Only a fool would have agreed to the same deal that Steven had. Gail was entitled to far more then Steven based on the will and the trusts.''

Under the 1996 will, Gail got all her father's personal effects, including clothing, jewelry and automobiles, as well as the house where she lives on Sunset Island in Miami Beach and Victor's Golden Beach house.

In addition, it provided $100 million and all Posner's voting shares in Security Management Corp. to be held by his trustees for Gail Posner. She was to receive a minimum of $8 million a year.

The lawyers talked on and off for much of 2001, but they still hadn't reached a settlement for Gail.

• Around the spring of 2001, three of Posner's long-time attorneys were fired.

Rosen, Cliff Steele and Mark Dopkin, a Baltimore attorney and Posner's second cousin, didn't see it coming. For years all three had been considered part of Posner's inner-circle of business associates. Steele was the least tenured of the group, working almost 14 years for Posner, while the other two had been advising Posner for between 30 and 40 years.

They all claim they were canned by Nestor, although Ferrell and Nestor say it was Posner who decided to give them the boot.

• A June 6, 2001, letter sent to Rosen and signed by Posner stated that since Rosen had officially undertaken the representation of Gail Posner in the settlement negotiations, ``I believe it is inappropriate for you, your law firm, or your accounting firm to continue to represent me.''

DIRECTORS MEETING

• On June 14, 2001, a notice was issued for a special meeting of Security Management Corp., the first time in years directors had been summoned for such a gathering. The purpose: to elect a board of directors. Rosen says it was called within 24 hours of the last meeting he had with Ferrell and Schultz to discuss a settlement for Gail and that its obvious purpose was to vote her off the board.

• When the meeting was held on June 25, 2001, Posner didn't appear nor was he in touch by phone. Instead, he authorized his brother-in-law Melvin Colvin, through a written proxy, to vote his personal stock and the stock held by the 12/1/60 Victor Posner Trust. It was unusual behavior for the always-controlling Posner.

At the meeting, Rosen complained about the timing of the gathering and the allegedly unjustified salaries and benefits paid to the officers and directors of Security Management. He said Gail Posner deserved her board seat since she owned nearly 37 percent of the company.

But Rosen's pleas went unheard. When the votes were tallied, Gail was no longer an SMC board member. The new board consisted of Colvin, Nestor and Victor Posner.

• Three days later -- on June 28, 2001 -- the new Posner will was executed. Ferrell says he drafted it at Posner's request and it revoked the 1996 will.

Now with the settlement reached last week, neither Rosen nor Gail Posner are contesting the 2001 will. However, the grandchildren will continue their litigation despite their aunt's settlement.

''We're not disappearing,'' said Holly Skolnick, the Greenberg Traurig attorney representing the grandchildren, who were each left $250,000 under the 1996 will.

She claims that if the grandchildren's lawsuit is successful, it would jeopardize the settlement that Gail Posner, Nestor and Rosen agreed upon. ''The settlement is based on the validity of the 2001 will, which we firmly believe is invalid,'' Skolnick said.

However, Steven Marks, the attorney for Gail Posner and Rosen, contends the grandchildren's suit has no impact on the settlement.

The three grandchildren aren't the only Posner relatives still fighting over the remains of Posner's empire. Disputes regarding the beneficiaries of the trusts also are ongoing.

Prior to Victor Posner's death, some of the trusts benefiting Gail Posner were changed to make her stepbrother, Troy Posner, and the daughter of her stepsister, Tracy Posner Ward, the beneficiaries.

''It's not over,'' said Buchbinder, who also represents Tracy Posner Ward on trust issues. "There's definitely more that's going to happen.''