A court commissioner in Nevada has ruled against Rupert Murdoch’s attempt to change his family trust to effectively give his eldest son control of his media empire, according to legal documents reviewed by The New York Times.
On Saturday, Commissioner Edmund J. Gorman Jr. ruled that Murdoch and his son Lachlan, who is the head of Fox News and News Corp., acted in “bad faith” in their effort to amend the irrevocable trust, which gives Murdoch’s four oldest children — Lachlan, James, Elisabeth and Prudence — equal voting power of the company after his death.
The 93-year-old media mogul established his Murdoch Family Trust in 2006. Rupert Murdoch’s attempt to alter his family trust did not seek to diminish any of his children’s financial inheritance but is seen as a move intended to shift power of his media empire to Lachlan, who is known to have more conservative political views than his siblings.
“I love each of my children, and my support of Lachlan is not intended to suggest otherwise,” the elder Murdoch reportedly said in a trust meeting last year. "But these companies need a designated leader, and Lachlan is that leader."
In court, Rupert and Lachlan Murdoch had to prove that their plan to shift power was being done in good faith for the sole purpose of benefiting all of the elder Murdoch’s heirs. They reportedly argued that Lachlan’s control would ensure that the media empire would stay on its highly profitable, conservative course, which would be in the best interests of all of Rupert's beneficiaries.
In his 96-page ruling, Gorman described their plan as a “carefully crafted charade” to “permanently cement Lachlan Murdoch’s executive roles” inside the empire, “regardless of the impacts such control would have over the companies or the beneficiaries” of the family trust.
Lawyer Adam Streisand, acting on behalf of Rupert Murdoch, told the Times that they planned to appeal the court decision.
“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,” James, Elisabeth and Prudence Murdoch said in a statement to the Times.
The family’s legal battle reportedly began when the Murdoch siblings watched an episode of the HBO drama "Succession," in which the fictional Roy family owns a media conglomerate that falls into dysfunction upon their patriarch’s death. The TV show led Elisabeth's representative to the trust to write a " 'Succession' memo" to prevent a repeat in real life, according to the Times.