Family’s Financial Hurricane

Timothy S. Ferry, Esq.
Ferry Joseph, P.A.

Businessman Peter Karmanos, Jr., the Compuware co-founder and owner of the NHL’s Carolina Hurricanes, recently found himself caught in the middle of a financial storm that was allegedly considered to be of his own making.  His three adult sons filed suit against their father, arguing that they were owed money from a partnership valued at over $100 million that began with the intent to allow Karmanos to transfer his assets to his sons in a tax-advantageous manner.

According to the lawsuit filed in late May of 2016, Karmanos previously borrowed approximately $70 million from the partnership to support his NHL franchise, with the agreement to repay the loan at a 2.15% annual interest.  Later, in 2013, the partnership made a separate loan to Karmanos, this time for $101 million, which was to be repaid in installments over the next decade.  However, since that second loan, Karmanos “has failed to make a single payment of principal and/or interest due”, the lawsuit states.  In response, the sons sought the amount of interest owed, plus the initial loan amount, along with damages and attorney’s fees.  Fortunately, this suit was settled in mediation between the parties, thus avoiding a potentially protracted and contentious trial in the courts.

Though suits of this monetary amount are rare, they still highlight an important truth regarding the importance of seeking the assistance of professionals to avoid such family squabbles.  At Ferry Joseph, P.A., our attorneys regularly handle family disputes regarding estates, trusts, and guardianship.