David A. Katz, (hereinafter, the “petitioner”), as one of four trustees, seeks to dissolve the Adam J. and Phyllis Katz Foundation formed by trust agreement dated June 7, 1994, between Adam J. Katz and Phyllis Katz, as donors and trustees (hereinafter, the “Foundation”), and to have the assets of the foundation distributed equally to two new trusts pursuant to EPTL 7-1.13(a)(2) or (3). Petitioner would be the trustee of one of the new trusts and his brother, Alexander Katz, also a trustee of the Foundation, would be the trustee of the other new trust pursuant to a May 3, 2018 action of the Foundation’s board of trustees. The three other trustees of the Foundation, Alexander S. Katz, Ellen Katz-Doft, and David Katz-Doft, object to the petition (hereinafter, jointly the “respondents”). Pursuant to EPTL 7-1.13(a)(2), a trustee may divide a trust with the consent of all persons interested without court approval. Article v. of the Foundation requires the trustees, among other things, to act “by a vote of a majority of their number at any given time.” At this time, there are four trustees. Three trustees oppose the division of the Foundation. Article v. of the Foundation also requires that all actions of the trustees must be taken by resolution at a meeting or by written record without a meeting. Nonetheless, pursuant to EPTL 7-1.13(a)(3) the court has discretion to divide a trust upon the petition of a trustee or any interested person for any reason not directly contrary to the purpose of the trust. The May 3, 2018, written action of the board calls for the Foundation to be divided in a manner to be determined. Respondents allege that on April 4, 2022, a majority of the trustees agreed that Foundation would be spent down and terminated no later than December 21, 2029, as opposed to dividing the Foundation into separate trusts. However, respondents fail to provide a copy of such resolution or written record as required by Article v. of the Foundation. Moreover, petitioner alleges that the division of the Foundation was integral to his agreement to the designation of David Katz-Doff, as the fourth trustee on May 3, 2018. The trustees of the Foundation had been petitioner and his wife Esther, and objectant, Alexander and his wife Ellen, also an objectant. Esther died in 2014, leaving three trustees. David Katz-Doff is the son of Alexander. Petitioner alleges that but for the agreement to divide the Foundation, he would not have consented to giving Alexander a “supermajority of the trustees” by appointing his son David Katz-Doff, but instead, would have had his own daughter appointed as the fourth trustee in place of her mother. Thus, in essence, petitioner is seeking to enforce the May 3. 2018, action of the Foundation’s board. Respondents’ alleged that the May 3, 2018, action has been validly countermanded but have provided no proof. Similarly, petitioner’s attachment of a one-page email dated May 10, 2018, is not proof of a valid plan to divide the Foundation. Accordingly, if is hereby ORDERED that, petitioner, and his respective counsel, and respondents, and each of their respective counsel, shall appear for an in-person conference in court room 509 of New York County Surrogate’s Court at 31 Chambers Street, New York, New York on December 5, 2024, at 11:00 a.m; and it is further ORDERED that counsel shall forward a copy of this decision and order to each of their respective clients. The clerk of the court shall email a copy of this decision and order of the court to the addresses at the foot hereof. Dated: October 16th, 2024
