In the Matter of Ethel F. PEIERLS CHARITABLE LEAD UNITRUST.
Submitted: July 10, 2013.
Court Below: Court of Chancery of the State of Delaware, Case No.: 16811.
Upon appeal from the Court of Chancery.
Peter S. Gordon (argued), Gordon, Fournaris & Mammarella PA, Wilmington, Delaware for appellant.
Collins J. Seitz (argued), Seitz Ross Aronstam & Moritz LLP, Wilmington, Delaware for appellee.
Before STEELE, Chief Justice, HOLLAND, BERGER, JACOBS, and RIDGELY, Justices, constituting the Court en Banc.
STEELE, Chief Justice:
This Opinion is one of a trilogy of opinions, issued concurrently, addressing issues arising out of Petitions, filed by members of the Peierls family, requesting the Court of Chancery to accept jurisdiction over, and then modify, thirteen (13) trusts created during the period 1953 through 2005. None of these trusts were created or settled under Delaware law, and none were ever administered in Delaware. The Petitioners sought relief under recently-adopted Court of Chancery Rules 100-103, inclusive, which were designed to create an orderly procedure for entertaining petitions to modify a trust. No respondent was named in the Petitions, which the Court of Chancery denied on various
grounds, including lack of jurisdiction. The Petitioners appealed to this Court, which appointed Collins J. Seitz, as amicus curiae to brief and argue in opposition to the Petitions.
This Opinion, in No. 12, 2013, addresses the issues arising out of the Ethel F. Peierls Charitable Lead Unitrust. Our opinions in the companion cases, Nos. 11 and 13, 2013, respectively, address the seven (7) Peierls testamentary trusts and the five (5) Peierls inter vivos trusts. For the reasons next discussed, we affirm the judgment of the Court of Chancery.
I. FACTUAL AND PROCEDURAL HISTORY
Appellants, Brian E. Peierls and E. Jeffrey Peierls are the current trustees of the Ethel F. Peierls Charitable Lead Unitrust. The facts, which are set forth in the Vice Chancellor's opinion, are adopted in large part in this Opinion as well.
A. The Charitable Trust
On September 12, 1994, Ethel F. Peierls settled a charitable trust and named her sons, Brian and Jeffrey, as initial trustees (the " Trust" ). The Trust Agreement provides that each taxable year the Trust will pay an amount equal to six percent of the net fair market value of the Trust estate to the Peierls Foundation (the " Foundation" ). The Foundation is a charitable organization qualified under Section 170(c) of the Internal Revenue Code. Should the Foundation fail to qualify as a Section 107(c) charitable organization, the Trust ...