New York Attorney General Seeks Reduction of Leona Helmsley Estate Executors’ Fees

Bill for $100 million called ‘astronomical’

Leona Helmsley, shown in 1990, left most of her billions to charity when she died in 2007.

Leona Helmsley, estate planning

Leona Helmsley, shown in 1990, left most of her billions to charity when she died in 2007. Photo: Associated Press

By Peter Grant

Updated Jan. 21, 2016 5:32 p.m. ET

NEW YORK-Nine years after Leona Helmsley died, a battle over her estate erupted Thursday in a New York court. The state attorney general said a $100 million fee sought by the estate’s executors, including two of Mrs. Helmsley’s grandchildren, is “astronomical” and should be cut, potentially by about 90%.

Mrs. Helmsley, a onetime owner of a sprawling property portfolio that included the Empire State Building, left most of her $4.78 billion fortune to charity when she died in 2007. The four executors of her will in 2014 petitioned the estate for the fee to cover their work thus far.

The office of New York Attorney General Eric Schneiderman on Thursday challenged the executors’ petition, calling the more-than-$6,000 hourly rate it amounts to “exorbitant,” according to a filing in New York Surrogate’s

The attorney general’s charities bureau has the power to contest the executor fees to ensure the amount the charity receives isn’t diminished by “excessive and unreasonable expenses,” the filing states.

The filing asks that a more reasonable amount be set. It suggests one method of calculating under which the fees would be less than $10 million.

The battle marks the latest twist in the unwinding of a real-estate fortune built by Harry Helmsley over a half century. Other issues have included a challenge to Mrs. Helmsley’s will by two of her grandchildren who were cut out of it and the inclusion in the will of $12 million for her dog, Trouble, which eventually was reduced to $2 million.

Mrs. Helmsley served 19 months in jail on tax-evasion charges and garnered a reputation for mistreating her staff.

The four executors of her will include two of her grandchildren from her first marriage, David Panzirer and Walter Panzirer as well as one of her lawyers, Sandor Frankel, and John Codey, a business adviser. Mr. Codey figured in a 2001 page one article in The Wall Street Journal about Mrs. Helmsley and one of her suitors after her husband’s death in 1997.

In a statement released Thursday, a representative of the executors defended their $100 million request, noting that they “administered an extraordinarily complex the face of enormous risks.” The statement also said that the executors enhanced the estate’s value “by hundreds of millions of dollars” despite the economic downturn that caused real-estate values to plummet after Mrs. Helmsley’s death.

The attorney general’s Thursday filing points out that time records show that the executors spent 15,535 hours on estate matters, making their request for $100 million equivalent to a rate of $6,437 an hour. “By any definition, this hourly rate is exorbitant, unreasonable and improper,” the filing said.

The court earlier awarded the executors $7.2 million in fees as an advance payment. Nothing has been paid since because the attorney general’s office in late 2014 asked the court to hold off paying the full $100 million until it could review the request.

Mrs. Helmsley, who died at the age of 87, left most of her fortune to a charity, Leona M. and Harry B. Helmsley Charitable Trust. Her will included $15 million for her brother, the late Alvin Rosenthal; $10 million each for David Panzirer and Walter Panzirer, and $12 million for Trouble.

Two other grandchildren, Craig Panzirer and Meegan Panzirer Wesolko, received nothing. They contested the will and ended up getting $3 million each, according to people familiar with the matter. The two couldn’t be reached for comment.

The fight over executor fees stems in part from the will’s lack of clarity. The document expressly rules out the executors getting the statutory commission based on the estate’s assets, according to the attorney general’s filing.

The filing describes that provision of the will as a “prudent decision” because the statutory commission would have come to about $200 million, an amount that “would far exceed the reasonable value of the executors’ services.”

But the will doesn’t specify how the executor fees should be calculated, according to the attorney general’s filing. That means the executors “are entitled only to reasonable compensation for the services they actually rendered to the estate and nothing more,” the filing said.

Any resolution will center on the question of what is reasonable. The 2014 affidavit filed by the executors points to out how challenging it was for them to handle more than 80 stakes in real estate in 17 states and the District of Columbia, hundreds of individual bond issues, and hundreds of other pieces of personal property. The real estate included such trophies as the Empire State Building and Park Lane Hotel, garden apartments in White Plains, N.Y., and Wal-Mart Stores Inc. WMT 1.71 % properties throughout the country.

Complicating the executors’ task was the financial downturn and Mrs. Helmsley’s “personal notoriety,” the affidavit said. The executors contended that under these “unprecedented, extraordinary and exceptionally difficult” conditions they achieved enormous savings for the estate by doing such things as keeping taxes to a minimum and waiting for opportune times to sell such assets as the Park Lane.

“The executors confronted innumerable challenges and problems which were addressed successfully, all to the enormous benefit of the Charitable Trust,” the affidavit states.

The attorney general’s filing calls the affidavit “misleading” because it creates the impression that the executors were at the center of the real estate deal-making. In fact, they were “primarily reviewing information, analyses and recommendations prepared by their consultants and counsel,” the filing says.

The attorney general’s filing asks the court to appoint a neutral expert to advise on the “reasonable value” of the executors work.

As an alternative, the papers provide an analysis of what reasonable compensation should be based on the amount of hours the executors worked. That analysis concludes the four executors worked a total of about 15,535 hours and that a fair rate of payment would be $628 an hour based in part on what senior executives at the company were being paid at the time of Mrs. Helmsley’s death.

Mrs. Helmsley left instructions in her will that the fortune be spent on “purposes related to the provision of care for dogs” but a judge ruled that the trustees could give the money away as they saw fit. The trust had made $1.42 billion in grants as of March 2015 to charities including nonprofit organizations involved in health care and education. The four executors of
the Helmsley estate also are the trust’s four trustees, according to its 2014 annual filing.

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Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning. She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about. Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime. To download Annino’s FREE eBook, Estate Planning 101 visit,