L.A. Times / Don Bartletti ~ Reading Cinemas Movie Theatre

The Los Angeles Times is reporting on a family estate dispute and court drama thatis affecting the Los Angeles-based movie theater chain Reading InternationalInc. which has dozens of cinemas around the world, major real estate holdings, and a nearly 200-year history with roots in the railroad and coal business. The adult three children of Reading’s late chief executive, James J. Cotter Sr., are waging a battle for control of the company.

This case is more complicated than the typical estate dispute in that it involves a public company but it has some allegations that are common to many of them such as whether the father had capacity to amend the trust, breach of fiduciary duty and undue influence.

The Los Angeles Times reported that the issues began after James J. Cotter Sr., a Los Angeles businessman, resigned as CEO and chairman in August 2014 because of declining health, leaving son James Cotter Jr. in charge. Cotter Sr. died in September 2014 at age 76. Shortly thereafter, his two daughters went to court, alleging their brother improperly convinced their father to add him to a trust that would control the voting shares of the company.

The article notes that Ellen and Margaret Cotter’s court papers claimed that James Cotter Jr. unduly influenced their father while he was in the hospital after suffering a fall in his home. The daughters said their father lacked “the knowledge and understanding necessary” to make such financial decisions. The daughters contend that after their dad was admitted to the hospital, their brother convinced an estate attorney to draft an amendment to the trust that made him a co-trustee. They allege he lied to Margaret by saying the changes were made based on videos he took of their father expressing his wishes. 

NYT Article On Competency: "Money Woes Can Be Early To Alzheimers" And How This Effects Deciding When A Client Lacks Capacity

The New York Times recently had an article entitled "Money Woes Can Be Early Clue To Alzheimers" which is a case study on why early estate planning and having powers of attorney in place before there are competency issues is important -- especially to avoid later charges of undue influence and competency. It also raises the issue, however, of “What do we mean when we say someone has enough decision-making capacity to be ‘competent’?" The issue promises to become even more complicated as researchers and doctors diagnose Alzheimer’s earlier and earlier.

The article notes that the Financial Industry Regulatory Authority, the largest nongovernmental regulator for securities firms doing business in the United States, recently met with individual financial services companies and the Alzheimer's Association to formulate guidelines on how to deal with clients who have trouble remembering and reasoning, a problem that is not new but is increasing as the population ages.

On one hand, it is generally agreed that decisions by a competent adult should be respected. On the other hand, if new brain scans and other methods show signs that a person is developing dementia, does that mean the patient should be watched, or that there should be limits on his or her abilities to make financial or legal decisions?

The article cites experts who say confusion over money and finances is perhaps the most important and most predictable early functional change as people descend into dementia. For lawyers, the main question is at what point a client lacks the capacity to execute a will, trust or other document, and who decides when that point has been reached. And if a lawyer lets a client go ahead, will the document be challenged?

The American Bar Association's Commission on Law and Aging created guidelines on this issue in 2005 entitled "Assessment of Older Adults With Diminished Capacity." The guidelines that include warning signs of diminished capacity, like memory loss and problems communicating and doing calculations. The guidelines instruct lawyers to look at the legal requirements for capacity in specific situations, like making a gift. Courts are always struggling to come up with principles and definitions of capacity and definitions of capacity vary among the states.

With respect to probate, Hank Moravec has over 20 years' experience as one of the best Los Angeles probate attorneys and Los Angeles probate litigation attorneys and is available should you need legal advice regarding your own or a family member's situation. For a consultation, You can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221 to request a consultation.

The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office.

The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. There is ample free parking adjacent to the firm's office.

The San Fernando Valley office is located at 4605 Lankershim Boulevard, Suite 718, North Hollywood, California 91602-1878.