A U.S. court has rejected Australian media mogul Rupert Murdoch’s attempt to name his oldest son Lachlan as his only successor, according to The New York Times.
The 93-year-old had sought to amend a legally binding trust to grant Lachlan full control of his media empire.
Currently, the trust equally divides control among Murdoch’s four oldest children: Lachlan, Prudence, Elisabeth, and James.
The court found that Rupert and Lachlan acted in “bad faith” in their efforts to amend the trust.
Rupert and Lachlan Murdoch
Rupert Murdoch started in media in the 1950s, when he inherited his father’s newspaper business in Adelaide.
He owns several American, Australian and UK publications and TV networks. This includes Fox, News Corp, and the Wall Street Journal.
Forbes estimates his net worth is $US22.5 billion ($AU35 billion).
Murdoch has been married five times and has six children.
Lachlan Murdoch, 53, is Rupert’s oldest son. He, Elisabeth, and James are the children from Rupert’s marriage to his second wife, Anna. Prudence, Rupert’s oldest child overall, was born to his first wife.
Over recent years, Rupert has handed increasing business responsibilities to his oldest son. In 2019, Lachlan was named CEO of Fox.
Last year, Rupert stepped down as chairman of Fox and News Corp after almost 70 years. Lachlan became the sole Chair of News Corp, and continued as CEO of Fox.
Irrevocable trust
After divorcing Anna in 1999, Rupert Murdoch set up an “irrevocable trust”. Like a will, the legal document details how his business empire and assets should be divided when he dies.
Murdoch’s assets (e.g. his shares and property) will be equally shared between all six of his children.
The trust also ensured that the four oldest children would share voting rights in decisions about Fox and News Corp.
Rupert has since tried to change this aspect of the trust, giving Lachlan sole control.
Ruling
James, Elisabeth, and Prudence objected to the change.
The dispute ended up in court in the U.S. state of Nevada. Proceedings have been kept secret, and only The New York Times has seen actual court documents.
In a ruling handed down last week, Commissioner Edmund Gorman described the plan to change the trust as a “carefully crafted charade… regardless of the impacts on the company or the other children”.
In a statement, James, Elisabeth and Prudence said: “We welcome Commissioner Gorman’s decision and hope that we can move beyond this litigation to focus on strengthening and rebuilding relationships among all family members.”
Rupert and Lachlan’s lawyer Adam Streisand told the New York Times they were disappointed with the ruling and intended to appeal.
Another judge will also need to approve Gorman’s ruling.
