Deloitte Sued for $500 Million by Estate of Ex-Pistons OwnerBy
Adviser failed to disclose risks of plan, according to suit
Late Bill Davidson's estate hit with $2.7 billion tax bill
A Deloitte LLP unit allegedly promised a tax plan under which former Detroit Pistons owner Bill Davidson would “win if he lived, or win if he died.”
It didn’t work out that way. Four years after the 2009 death of the multibillionaire, his estate was hit with a $2.7 billion tax bill, according to a lawsuit filed in New York.
The estate sued Deloitte Tax LLP Thursday to recover $500 million in taxes, fees and penalties from the adviser.
Deloitte Tax failed to disclose the risks of the tax plan that it recommended to Davidson in order to secure him as one of its “marquee clients” who could generate large fees and serve as a “showpiece” to promote its services to other wealthy people, the estate said in the lawsuit.
“We are deeply committed to our clients and stand fully behind the services our team provided to Mr. Davidson,” Deloitte Tax said in an e-mailed statement. “We regret that the estate executor has decided to pursue this path.”
Deloitte Tax is ready to fight the lawsuit and is confident it’ll win, the company said.
According to the lawsuit, the Internal Revenue Service sent Davidson’s estate the $2.7 billion tax bill in May 2013 and, after negotiations, the estate is obligated to pay more than $457 million, in addition to $168 million in estate taxes and $82 million in gift taxes already paid.
“In its zeal to secure Mr. Davidson’s business, Deloitte Tax failed to disclose the numerous material risks associated with the plan that it advocated,” Davidson’s estate said in the lawsuit, which was filed in state court in Manhattan.
In addition to the Pistons, Davidson also owned the NHL’s Tampa Bay Lightning and in 2004 became the only owner in the history of professional sports whose teams won the hockey and basketball championships in the same year.
The case is Aaron v. Deloitte Tax LLP, 653203/2015, New York State Supreme Court, New York County (Manhattan.)
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