Thursday, January 15, 2015

How a $150-Million Trust Fund Went Missiing

Wall Street had a terrible year in 1973. Franklin Resources, run by Charles B. Johnson, had gone public two years earlier;  now it was struggling with a major acquisition and running at a loss.

Franklin's underwriter obtained a $100 million loan for Johnson from Anthony Miele, Jr. As a thank you for the help, Johnson gave Miele 4,000 shares of Franklin Resources, then worth about $4 a share. Miele put the shares in a trust for his son, Anthony Miele III.

In 1974 the elder Miele died of a heart attack at age 39. The trust's Franklin Resource shares were voted that year, according to bank records. After that the story, as told by William D. Cohan in the NY Times,  gets murky.

For years the younger Miele knew nothing about the trust. Eventually the shares were deemed abandoned, and Franklin Resources rejected Bank of New York's offer to track down the trust beneficiary. In 2012, a business partner of "the Al Capone of New Jersey" reportedly "signed something" on behalf of Miele.

Anthony Miele III is fighting to reclaim his inheritance, now worth about $150 million, including unpaid dividends.

Update: Antoine Gara's Forbes column offers additional details of the murky story. Not only did the 4,000 shares go missing, Miele Jr.'s $100-million loan was not repaid.

1 comment:

Anonymous said...

$100,000 you knucklehead, not $1m...