In re Peierls Charitable Lead Unitrust
77 A.3d 232
Del.2013Background
- This case arises from Petitions by Peierls family members seeking to compel the Court of Chancery to accept jurisdiction over and modify thirteen trusts created 1953–2005, none settled or administered in Delaware.
- The Ethel F. Peierls Charitable Lead Unitrust is at issue in this No. 12, 2013 matter; companion cases cover seven Peierls testamentary trusts and five Peierls inter vivos trusts.
- The 1994 Trust designated Brian and Jeffrey Peierls as initial trustees, with the Foundation as the sole current beneficiary and a 35-year term ending 2029, after which Brian may exercise a testamentary power of appointment.
- Petition requests included resignations of current trustees, appointment of Northern Trust as sole trustee, Delaware law governing administration, Delaware situs, reform of the administrative scheme, and Court of Chancery jurisdiction over the Trust.
- The Vice Chancellor denied relief on several grounds, including lack of an actual controversy and potential advisory opinions, prompting appellate review.
- The court held that the Trust’s situs and governing law could be determined without court-ordered changes, and that unilateral moves by trustees could render any Court of Chancery relief advisory rather than authoritative.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there is an actual controversy justifying declaratory relief over resignations, trustee appointment, situs, and governing law. | Peierls argues for Court intervention to resolve governance. | Chancery found no actual controversy as terms did not require court approval. | No actual controversy; advisory opinion risks; relief denied. |
| Whether the petition could be treated as reformation of the trust. | Petitioners seek reform under equitable powers. | Reformation hinges on Washington law governing administration; designation of Delaware situs ineffective. | Reformation not proper under current situs; potential reconsideration if situs properly changed. |
| Whether the court should retain jurisdiction over the Trust. | Petitioners seek ongoing supervision by Delaware courts. | No compelling reason to retain jurisdiction absent proper situs and administration. | Court should not retain jurisdiction; proper situsing would enable future consideration. |
| Whether designation of Delaware as situs and change in law governing administration is effective without court approval. | Trustees attempted to designate Delaware as situs to shift administration. | Designation conditioned on court confirmation; current designation ineffective. | Situs designation ineffective; Washington law continues to govern administration until proper transfer. |
Key Cases Cited
- In re Ethel F. Peierls Charitable Lead Unitrust, 59 A.3d 464 (Del.Ch.2012) (trust administration and situs considerations in Peierls)
- In re Peierls Family Inter Vivos Trusts, 77 A.3d 249 (Del.2013) (prior inter vivos Peierls analysis on situs and administration)
- Rollins Int’l Inc. v. Int’l Hydronics Corp., 303 A.2d 660 (Del.1973) (requirements for an actual controversy)
- Charitable Lead Unitrust, 59 A.3d 468 (Del.Ch.2012) (interpretation of trust provisions and administration)