Supreme Court refuses to intervene in U-Haul’s 14-year-old family feud

Monday, Jan. 10, 2000 | 11:44 a.m.

BLOOMBERG NEWS

WASHINGTON -- Amerco, the parent of U-Haul International Inc., must pay $55 million in interest after the U.S. Supreme Court refused to intervene in a 14-year-old family feud.

The nation's highest tribunal, without comment, today rejected an appeal by Amerco, Chairman Edward "Joe" Shoen and other company officials in an offshoot of the sibling-on-sibling fight that helped send the company's board of directors into bankruptcy in 1995.

The high court decision is a triumph for family members Samuel W. Shoen, Cecilia M. Hanlon, Katrina Carlson and Michael Shoen and the companies they control. The justices left intact a lower court decision awarding interest to that group on top of the $462 million damage award they won in 1995.

Amerco previously placed money in escrow to cover the interest payments. In regulatory filings, the company previously said the case "will not have the effect of increasing or decreasing Amerco's net earnings, but could reduce stockholders' equity."

The legal fight dates back to 1986, when Joe Shoen and allies took control of the company, ousting his father Leonard as chairman.

Leonard Shoen and six of his children sued two years later to resolve a dispute over the value of shares they held. A judge awarded the ousted faction $462 million, while ordering them to surrender 48 percent of the company's outstanding shares in exchange. Amerco's five directors immediately filed for bankruptcy.

In an agreement with the directors, Amerco ultimately agreed to pay the award in cash. The bankruptcy plan nonetheless didn't resolve whether Amerco would have to pay the interest that had accrued since the directors' bankruptcy petitions.

A series of lower courts sided on that question with the Leonard Shoen group, now led by his son Samuel W. Shoen. Those decisions prompted the Supreme Court appeal by Amerco, Joe Shoen and others.

Amerco, based in Reno, also owns insurance and real estate businesses in addition to its well-known U-Haul truck and storage rental businesses.

Leonard Shoen, who fathered 12 children, died in October at the age of 83 in a Las Vegas auto wreck that police called an apparent suicide.