May 9 (Bloomberg) -- John Hancock, who has feuded with his billionaire mother Gina Rinehart for at least a decade, today for the first time sought to wrest control of a multibillion dollar family trust from her.
Hancock is prepared to be the trustee of the Hope Margaret Hancock Trust, his lawyer Christopher Withers said at a hearing in New South Wales Supreme Court in Sydney today. Hancock and his sister Bianca Rinehart sued to remove their mother as trustee, accusing her of misconduct.
“That is the focus of the litigation,” Justice Patricia Bergin said, referring to Rinehart’s removal and adding the replacement trustee should be dealt with at trial, scheduled to start Oct. 1.
The trust holds almost a quarter of Gina Rinehart’s estimated net worth of $17.3 billion, which makes her the 42nd richest person in the world, according to the Bloomberg Billionaires Index. Included in the trust are 23.5 percent of shares in Hancock Prospecting Pty, Gina Rinehart’s iron ore company which collects royalties from Rio Tinto Group operations and is building its first mine.
Hancock, Gina’s only son, and his sisters Bianca and Hope Rinehart Welker sued to remove their mother as trustee in September 2011 after she had sought to extend her control of the trust to 2068, threatening the children with bankruptcy if they didn’t agree. Welker pulled out of the lawsuit earlier this year and is now named as a defendant. Ginia, the youngest of Gina’s children, has sided with her mother since the suit was filed.
In the initial complaint, the children accused their mother of misconduct by threatening their financial ruin, giving them a single day to sign the accord extending her control of the trust and lying to them in a bid to sign the agreement. Hancock and Bianca are revising the complaint to reflect Welker’s withdrawal and putting Hancock up as a replacement trustee.
Gina Rinehart plans to argue Hancock isn’t a suitable replacement, her lawyer David Russell told Bergin today.
Based on evidence that will be presented in court, “Mr. Hancock would be far less satisfactory” as a replacement, even if the judge finds Gina Rinehart should be removed, Russell said. He didn’t elaborate on the evidence he plans to present.
“I’m not worried,” Hancock said in an e-mail today. “I’ve done nothing wrong.”
He said he was capable of fulfilling the duties of a trustee and a qualified independent person would be as well.
Hancock dumped his mother’s name and adopted that of his grandfather in 2003. Two years later he agreed to drop claims against his mother and her company in exchange for A$398,125 ($407,481) which he received in lieu of any distributions from the Hope Margaret Trust before it vested in 2011, on Ginia’s 25th birthday.
Under the agreement, Hancock was also promised a job with a stock broker who would take Hancock Prospecting to an initial public offering, and if that didn’t happen, Hancock would get A$2 million, according to a copy of the agreement released in the case.
Hancock has also suggested that in his stead, an independent trustee could be appointed by the court, a proposal disputed by Rinehart who claims that would violate agreements that prohibit non-family members from controlling the trust.
“The last thing this litigation needs is more litigation,” Bergin said in response to a proposal from the defendants’ lawyers to challenge the idea of naming an independent trustee in pre-trial arguments.
The case is John Langley Hancock v Gina Hope Rinehart. 2011/285907. New South Wales Supreme Court (Sydney).
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