SHERIDAN — In an opinion published earlier this month, the Wyoming Supreme Court partially affirmed and partially reversed the 4th Judicial District Court’s decision in a case regarding a Sheridan County trust and its beneficiaries.
According to court documents, the Forbes family fortune originated with American businessman William Hathaway Forbes, who inherited his father’s Massachusetts trust and investment advisory firm, J.M. Forbes & Co.
William Hathaway Forbes established the Beckton Ranch Trust in the 1920s to manage and hold property in Sheridan County on behalf of the family and its descendants.
Spike Forbes, along with his siblings William C. “Cam” Forbes, Julia Forbes, Edith Forbes and 17 other family members, are beneficiaries of the trust’s 1,188 shares. Cam, Julia and Edith Forbes, as well as Spike Forbes’ nephew, Donald Bingham, are trustees of the Beckton Ranch Trust.
Disagreements, however, soon resulted in personal — and legal — conflict for the family.
Spike Forbes sued his family members in 2019 over a dispute in the value of trust shares. After Spike Forbes tried to give his trust shares — which he estimated were worth more than $21,000 each — to other family members and a foundation, trustees conducted a sealed-bid process to determine the value of each share and recoup the shares from Spike Forbes’ awardees at a fair market value. The trustees found each share was worth about $6,000 and reacquired the shares at, Spike Forbes alleged, less than fair market value.
In response to the discrepancy, Spike Forbes sued, requesting an accounting of the trust, damages for breach of fiduciary duty and declaratory judgment — or a binding judgment defining the legal relationships between parties and their roles.
The district court found Spike Forbes did not have a standing to seek declaratory relief in the case and the fellow trustees did not breach their duty of loyalty. The court also found the trustees’ accounting to be sufficient.
The suit reached the Wyoming Supreme Court in January.
In a decision authored by 5th Judicial District Court Judge Bobbi Overfield — who heard the case instead of the judge who initially decided the case, Wyoming Supreme Court Justice John Fenn — the Wyoming Supreme Court upheld the district court’s initial findings Spike Forbes had no standing to request declaratory judgment and the Beckton Ranch Trust’s accounting was adequate.
However, the Wyoming Supreme Court determined one trustee, Edith Forbes, engaged in self-dealing — or took advantage of her role as a trustee to act in her own interest, rather than the interests of all trust beneficiaries.
Through the trustees’ sealed bidding process, Edith Forbes received one additional share in the Beckton Ranch Trust. Although the trustees took steps to disadvantage themselves in the bidding process by offering first-priority to non-trustee bidders in the event of tied bids, the court determined these efforts were insufficient to stop trustees from self-dealing.
“We find (Edith Forbes') acquisition of the share constitutes impermissible self-dealing,” Overfield wrote.
The court remanded the case back to the district court with instructions to order Edith Forbes to return the additional share of the Beckton Ranch Trust she received through the bidding process.