Bickering over the assets of former American Airlines executive Max Hopper resulted in a multi-billion dollar judgment against JP Morgan, the firm administering the enormous estate.
By most accounts, one-time American Airlines Vice President of Information Systems and former Sabre Group Chairman Max Hopper was a visionary who foresaw that the future of aviation would depend on an investment in computerized reservation and booking networks. Largely credited with modernizing the way airline passengers book travel, in 1992, Hopper was named as one of “The 25 Greatest Contributors to Information Systems” by Computer World.
There is no way, however, that the forward-looking information systems pioneer could anticipate his sudden and unexpected death following a massive stroke in 2010. Hopper left behind an estate estimated to be in excess of $19 million. Unfortunately, he did not have a will at the time of his death.
According to The Dallas Morning News, infighting among Hopper’s heirs may have cost JP Morgan billions of dollars. As the administrator for the majority of the assets in probate, the firm was taken to court by Hopper’s surviving family. The bank was accused of favoring certain family members and ignoring others when making financial decisions worth millions of dollars for the estate. Some of the heirs claimed that the bank was slow to release assets as well as personal items and accused JP Morgan of repeatedly missing critical legal and financial deadlines. The bank, on the other hand, argued that it was simply trying to find an equitable solution to disagreements between the surviving heirs.
In September of this year, a Dallas jury found that JP Morgan had mishandled the estate and ordered the firm to pay family members $8 billion in punitive damages – an amount that dwarfed the size of the already substantial estate.
“Clearly the award far exceeds any possible interpretation of Texas tort reform statutes,” a spokesperson for JP Morgan said of the verdict at the time. “There has been no judgment entered by the court based on this verdict.”
The firm said that it was “highly confident “ that the decision would be overturned and this month, lawyers representing JP Morgan went back to court to ask the judge to throw out the jaw-dropping jury award.
“The law and evidence do not support any claim against JPMorgan, much less the unprecedented multi-billion-dollar punitive damage award, which the heirs have already admitted is unconstitutionally excessive,” JP Morgan wrote in a court filing, asking for relief from what it points out is the ninth-largest monetary verdict in US history. ”The crux of the lawsuit is whether sparring survivors of a decedent may blame an independent administrator for seeking judicial guidance on a distribution issue about which the survivors disagree.”