MONTGOMERY — A lawsuit alleging self-dealing among trustees overseeing a scholarship fund for needy children created by former Alabama Secretary of State Mabel Amos has been settled pending approval by Montgomery County Circuit Judge Greg Griffin.
Allen Dodd, an appointed Deputy Alabama Attorney General, said in a hearing in Montgomery County Circuit Court on Thursday that the state, the fund's board members and the trust fund's trustee Regions Bank recently settled the case. The fund's board members are John Bell, Rick Clifton and Alabama Ethics Commission executive director Tom Albritton.
The Mabel Amos Trust Fund is worth about $8.2 million, mostly due to oil and gas wells being on its property in South Alabama. Amos was Alabama Secretary of State from 1967 to 1975. She died in 1999.
Attorney General Steve Marshall said in a filing in April 2023 in a lawsuit against the trust he intervened in that Regions and the board members "engaged in acts of self-dealing, or breached their fiduciary and other duties to the trust by failing to prevent or prohibit self-dealing, or by permitting and acquiescing in self-dealing, and engaging in other acts and omissions in violation of statutory and common law duties owed to the Trust." The trustee and board “impermissibly” awarded $135,000 in college scholarships to Albritton’s children, according to the filing. Albritton has said he didn’t approve the scholarships to his children while serving as a board member and got opinions from Regions Bank’s legal and accounting staff that said his children were eligible for the scholarships.
Griffin didn’t rule on scheduling a later hearing to approve the settlement on Thursday. He is also considering a motion by private plaintiffs to appoint a “special fiduciary” to investigate the trust fund’s finances. In May, the Alabama Supreme Court overruled a court-ordered investigation by a special master and CPA.
Dodd said the settlement was based on extensive discovery for over a year and six months of negotiations among the parties. He said the settlement “more than recovered” what the state contends has been expended erroneously or wrongly.
Byron Mathews, an attorney representing Tyra Lindsey, a 10th-grade student at Hillcrest High School in Evergreen, and her mother, Denese Rankin, requested Griffin appoint a “special fiduciary” to further investigate any wrongdoing before settling. Lindsey hopes to apply for a scholarship from the fund to attend college after high school.
Mathews said the settlement was “collusive” and a “slap on the wrist.”
Dodd said, “It’s a little presumptuous to attack the settlement when he has no idea what the terms are.”
Dodd told Griffin paying a special fiduciary, likely an accountant or CPA, would be expensive.
“The proposed order that they would have you sign is going to tax fees incurred by the special fiduciary to the trust,” Dodd said. “Every dollar that that trust spends to pay for useless and unnecessary work because this case has been settled is a dollar less that goes to the children of Alabama. Every dollar that comes out of that trust and goes into someone’s pocket is a dollar that is not going to a child in South Alabama and North Alabama who but for this trust would never step into a college.”
Mathews countered, “A special (fiduciary) will more than likely find funds that haven’t been returned to the trust so he’ll benefit financially the trust rather than harm it.”
“You’re going to be in a position to approve how much he’s going to receive and you’ll have before you how much he has discovered that they haven’t discussed that should be returned back to the trust as a result of their breaches of their fiduciary duty,” Mathews told Griffin.
Terms of the settlement weren’t disclosed in court on Thursday.
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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