DELAWARE FILES ACTION OVER ALFRED I. DUPONT TESTAMENTARY TRUST

(The following is a reformatted version of a press release
issued by the Office of Delaware Attorney General Beau Biden
and received via electronic mail. The release was confirmed by
the sender.) 
June 18, 2012 
Biden Protects Resources That Provide Healthcare for Delaware
Children 
Attorney General acts to ensure Delaware continues to be primary
beneficiary of A.I. duPont 
Trust; Attempts to lessen Delaware’s influence cited in filing 
Wilmington - Delaware Attorney General Beau Biden filed an
action in a Florida court Monday asking a judge to order the
trustees of the four billion-dollar Alfred I. duPont
Testamentary Trust to adhere to Mr. duPont’s clear intent that
Delaware children and elderly be the ultimate beneficiaries of
his trust. 
The filing alleges that the Trust has deviated in several
important respects from the clear directions that Mr. duPont
laid out in his Will, including the governance structure of the
Nemours Foundation, and how money is distributed from the Trust
to the Foundation and, ultimately, to beneficiaries in Delaware.
Biden is asking the Court to enter a declaratory judgment about
the proper accounting and governance of the Trust, and is
seeking other remedies to ensure that Delaware residents receive
the benefits that Mr. duPont intended to leave as his legacy. 
“This case is about ensuring that Mr. duPont’s clear intent is
followed and that Delaware’s interests are protected,” Biden
said. “Because of Mr. duPont’s vision and generosity,
generations of Delaware children have benefitted from the care
at the hospital that bears his name and the Nemours clinics.
Mr. duPont determined that Delaware’s children and elderly were
to be the primary beneficiary of his trust, and my office is
going to make sure that vision continues to be carried out.” 
Alfred I. duPont, who was a vice president at the DuPont Company
before moving to Florida, died in Jacksonville, Florida in 1935.
He left the vast majority of his fortune to the Trust, which is
now valued at more than $4 billion.  His Will instructed his
trustees to create the Nemours Foundation to care for children
and the elderly.  The Nemours Foundation was established in 1936
and is one of the largest children’s health care systems in the
country.  The Nemours Foundation treats more than 200,000
children annually, and employs approximately 4,400 people in
Delaware, Pennsylvania, New Jersey, and Florida. 
Mr. duPont intended for the Nemours Foundation’s main focus to
be on Delaware, specifying in his Will that “first
consideration, in each instance, (be) given to beneficiaries who
are residents of Delaware.”  The Will also directs that Nemours’
governing body consist of a majority of Delawareans. 
Biden filed his pleading in the Duval County Circuit Court in
response to Mr. duPont’s trustees’ request that the Court allow
it to split the Trust for tax purposes.  The trustees are also
seeking the Court’s approval for a host of changes to the
governance structure and accounting procedures of the Nemours
Foundation, as well as changes to the removal process for the
trustees.  Earlier this year, the Court granted Biden’s motion
requesting that the Department of Justice be allowed to
participate in the proceedings as a representative of the
Delawareans who are the ultimate beneficiaries of the Trust. 
Specifically, Biden’s complaint alleges that the trustees have
violated Mr. duPont’s intent (and by extension Florida law) by: 
·         Shifting the Trust’s primary focus away from
Delaware’s beneficiaries and toward Florida.  Mr. duPont was
clear in his Will that Delaware was to receive “first
consideration” for the charitable contributions made by the
Nemours Foundation. 
·         Restructuring the Nemours Foundation’s governing body
in a way that dilutes Delaware’s influence and violates Mr.
duPont’s instruction that the Foundation be controlled by a
five-member Board of Managers, at least three of whom live in
Delaware. Instead, the trustees have proposed a governance
structure where Delaware would have a majority only on a state-specific Delaware Board of Managers, which would be subject to
the authority of a Board of Directors that answers to the
trustees. 
·         Improperly calculating and accounting for Delaware’s
distributions from the Nemours Foundation and the distributions
from the Trust to the Foundation.  The Will specifically states
that the trust’s first priority is to maintain the Nemours
Mansion and Gardens (Mr. duPont’s home in Delaware) and the
maintenance is to be paid off the top before the annual proceeds
are distributed.  In 2009, the Trust completed a multi-year
renovation to restore the mansion and grounds to “a grand French
neoclassical home, built in 1910 in the manner of great homes
such as Versailles and Blenheim Palace.”  The costs were charged
completely to Delaware’s allocation instead of coming out of the
trust’s principal as called for in Mr. duPont’s Will.  Delaware
was charged $72 million over those five years for the work on
the mansion and grounds.  Had the renovation costs been properly
allocated by the Trust, Delaware’s portion would have been cut
in half and the State would have received an additional $36
million to be spent on care for children and the elderly.  In
another example in the complaint, $102 million came out of
Delaware’s allocations from 2005 to 2010 for “Corporate and
Shared Services,” but just more than $19 million was charged to
Florida and nothing appears to have been charged to Pennsylvania
and New Jersey. 
·         Improperly calculating and accounting for Delaware’s
distributions from the Nemours Foundation and the distributions
from the Trust to the Foundation. 
·         Adopting several changes to the Trust without first
notifying Delaware and/or without including Delaware as a party
in the legal proceedings. 
·         Making the Nemours Mansion and Gardens difficult for
the public to visit--for example, by denying access to children
under 12.  Mr. duPont’s cousins - Henry Francis DuPont
(Winterthur) and Pierre S. DuPont (Longwood Gardens) - built
homes and then left the properties to be used for the public
good as well.  For the year 2010, Winterthur had 116,000
visitors, and Longwood Gardens had 876,000.  By contrast,
Nemours had only 21,000 visitors in 2010.  No children under 12
are allowed and a maximum 48 visitors are allowed at any one
time on the 222-acre property. 
“Delaware has experience with the duPonts building homes with
the intent of turning them over to the benefit of the public,”
Biden said. “Alfred I. duPont wanted the mansion to be for the
public good. Few Delawareans have seen Nemours, but the other
mansion and gardens are part of the fabric of our state. This
shows that the current Nemours governing scheme is not sensitive
to Delaware residents.” 
To remedy the harm that Delaware beneficiaries have already
suffered as a result of the trustees deviating from the
conditions of Mr. duPont’s Will and violating Florida law - as
well as to guard Delaware’s interests going forward - Biden is
asking the Court to enter declaratory relief regarding the
structure of the Trust going forward and relief to make up for
any shortfalls in Delaware’s distributions for past years.  The
pleading also asks the Court to: 
·         Make sure that the highest governing body that
controls the Nemours Foundation be made up by three-fifths (60%)
Delaware residents, whether such body is labeled a Board of
Managers or Board of Directors, such that no distributions be
made outside of Delaware except with the prior consent of that
governing body. 
·         Provide the Delaware Attorney General notice of any
subsequent proceeding in which any party attempts to change the
terms of the Trust. 
·         Provide the Delaware Attorney General a full
accounting of the Trust’s income and the value of its assets
from 2005 to 2011, as well as all of the expenditures related to
the Nemours Mansion and Gardens, and all disbursements made to
beneficiaries of Delaware, and all other distributions. 
·         Pay for all renovations to the Nemours Mansion and
Gardens out of the Trust’s principal, as Mr. duPont intended,
not from the annual income distributed to Delaware. 
·         Ensure the Nemours Mansion and Gardens are open and
accessible to the public, including children, in accordance with
the testamentary intent of Mr. duPont. 
Jason P. Miller
Public Information Officer
Delaware Department of Justice
820 N. French Street, 6th Floor
Wilmington, DE 19801
(302) 577-8949
(302) 893-8939 (cell)
(302) 577-6626 (fax) 
(bjh) NY 
#<480199.660640.3.0.2.6.76>#
 
 
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