New Orleans Saints and Pelicans owner Tom Benson and trustees for his estranged heirs have ironed out legal and structural sticking points of a settlement that has been in the works since last June, avoiding a federal trial that was scheduled to begin on Monday.
The confidential agreement, announced Friday, allows Benson to avoid the likelihood that proprietary financial information sensitive to the NFL and NBA would become public record in court.
"This has been a long and difficult time and we are pleased this is behind us," Benson said in written statement released by his pro teams. "We continue to strive for our number one goal and that is winning championships."
The 89-year-old Benson and the trustees had already agreed on the framework of a settlement removing shares of the pro teams from trusts set up for Benson's daughter, Renee, and her two children, Rita and Ryan LeBlanc. However, the sides still had to mutually accept technical details regarding how settlement payments would be made and guaranteed.
U.S. District Judge Jane Triche Milazzo had set trial for Monday in the event no agreement on those matters was reached.
"From the beginning of this lengthy legal process, our sole objective has been to ensure that any exchanged assets were of fair and equal value," trustees Robert Rosenthal and Mary Rowe said in a written statement. "We believe this settlement does just that."
The Saints and Pelicans have politically sensitive leases to play in state-owned stadiums, allowing the clubs to pay negligible rent while keeping virtually all revenues they generate through tickets, concessions, parking, sponsorships and naming rights. As a related inducement, state offices have paid above-market rents to operate out of a Benson-owned office tower next to the Superdome.
A trial was bound to shed more light on the deal the teams are getting to play in the Superdome and neighboring basketball arena, as well as details about their revenues. Benson also was expected to be compelled to testify.
In January 2015, Benson announced he no longer wanted his daughter and her children to inherit his pro clubs, and that he intended to removes shares of the teams from their trusts and replace them with other assets. Benson also stated at that time that he intended to leave the NFL and NBA teams fully in the hands of his third wife, Gayle, whom he married in 2004.
Three lawsuits followed in state courts in Texas and Louisiana, and in U.S. District Court in New Orleans. The Texas case was settled in January 2016.
The federal lawsuit settled Friday involved the initial rejection by trustees of Tom Benson's proposed asset swap. Benson sought to substitute more than $500 million in mostly promissory notes - some of which would not have come due for more than two decades - in place of non-voting shares in his two pro teams and other businesses interests.
At the time the family strife began, the heirs' trusts held more than 90 percent of Pelicans non-voting stock and more than half of Saints non-voting stock.
Benson bought the Saints for about $70 million in 1985 and the Pelicans for $338 million in 2012. Financial publications in the past year have estimated the value of the Saints at more than $1 billion and the Pelicans at more than $600 million.
The most contentious of the lawsuits took place in civil court in Louisiana. In that case, the estranged heirs asked a judge to rule Tom Benson mentally incompetent. That lawsuit centered on allegations that Gayle Benson and an inner circle of team executives manipulated an enfeebled Tom Benson into ostracizing his daughter and grandchildren, who've long been the heirs apparent to the a more-than $2 billion business empire that includes the two pro teams, auto dealerships, a television station and real estate.
After a trial that was closed to the public, Judge Kern Reese ruled that while Benson sometimes exhibited forgetfulness or impairment common among people his age, he remained aware of the consequences of his actions and therefore fit to continue overseeing his own affairs.
Because the estranged heirs have sought to publicly demonstrate Tom Benson's alleged mental fragility, they might have preferred that the federal case go to trial. However, the trustees who settled that case were only legally bound to protect the heirs' financial interests, somewhat insulating them from the family drama.
None of the settlements or rulings preclude the heirs from contesting Tom Benson's will after his death.