Heirs of construction magnate fight over $7 billion in court
BIRMINGHAM (AP) — The son and daughter of John Harbert III, the wealthy construction magnate who died in 1995, are fighting in court over the son's transfer of the family construction company to an investment firm with $7 billion in holdings.
Harbert's daughter, Margie Gray, filed suit in Jefferson County Circuit Court claiming her brother, Raymond Harbert, improperly took the core business for the benefit of his investment firm and left her with a comparative financial pittance.
The suit, which was filed last month, says the transfer of Harbert Corp.'s assets to the investment firm, Harbert Management Corp., provided her an amount "so disproportionately small" that no reasonable person would accept it.
Deceit or desert?
The Birmingham News, which reported on the suit in December, said she accused her brother of getting her to sign a shareholder consent form approving of the transfer by hiding the text of the papers, claiming it was merely a loan agreement, while she held an infant in the garden of the family home.
In response, Raymond Harbert called his sister's allegations unfounded and said he turned a financially ailing construction business, which was teetering on the brink of bankruptcy, into a hugely successful investment operation that has provided her and others with handsome profits.
His filing said Gray has received $15 million in distributions since the reorganization. His response also said his sister, a director of Harbert Corp., had never before objected to him managing the family's assets through Harbert Management.
The legal spat involves siblings in one of Alabama's richest families. John Harbert III's wife, Marguerite, was listed in September by Forbes magazine as being worth $1.5 billion through her inheritance.
Gray contends the transfer plan was approved at a meeting without her. She also said it was a conflict of interest for her brother, as a director of Harbert Corp., to vote on the plan because he had a stake in the investment firm.
Her suit asks for a jury trial, punitive damages and payment of Harbert Management's improper profits back to Harbert Corp.
Raymond Harbert said the plan was consistent with the wishes of their father and was approved before his death.
"Harbert Management Corp. has become a successful enterprise, managing the growth of the assets of Harbert Corp. and 900 other parties," Raymond Harbert's response reads. "The benefits to Harbert Corp. and its shareholders, including the plaintiff, have been profound."
Harbert Management spokes-man Bill Lucas said the suit
will have no impact on the business.
"Gray's claims are a personal family matter and we regret she has chosen to make them public," Lucas said. "Raymond Harbert enjoys the full support of Harbert Management and its shareholders, directors and officers."
Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Save $84.50 a year off our newsstand price:
Subscribe today for only 38 cents a day!