September 7, 2011; Source: Boston Globe | This one sounds like a good Vanity Fair article. Back in pre-recessionary 2007, millionaire brothers Alan and Hank Lewis decided to donate an ownership stake in the Paul Gaugin, a luxury cruise ship, to the Boston Foundation (TBF). Alan had turned over a 40-percent share and Hank a 3-percent share in the ship before Hank balked and tried to block the donation. An acrimonious feud between the brothers has ensued and is not expected to cease anytime soon.
In the meantime a game of poker began between Hank Lewis and TBF, which now shared ownership of a cruise ship that it could not sell. TBF President Paul Grogan says that the foundation originally accepted the cruise ship donation, even though it was unusual, because a sale of the ship was in the works and the proceeds would have constituted the foundation’s largest donation ever. “The flexibility to work with people on nonstandard gifts has been one of the keys to our success,” Grogan told the Boston Globe. “But this was in a class by itself.”
Unfortunately the gift negotiation was also in a class by itself. Hank Lewis knew that TBF had an impending deadline. “Under federal tax codes,” the Globe article reports, “the foundation faced serious penalties if it held onto the donated ship for more than five years. The penalty balloons from 10 percent of the property’s assessed value in the sixth year of ownership to 200 percent in the seventh.” According to the court’s decision, Hank Lewis “devised a scheme intended to force [TBF] into selling its shares . . . at a discounted price.’’ He turned down a $68 million offer for the ship and ran down the clock, offering TBF first $15 million and then $17 million for its stake, which was about half what the foundation would have gotten if the sale had been made. The court has now ruled that the foundation is to be paid the $31.6 million it would have received. Hank is now suing Alan for bad business practices and Alan is getting ready to begin to help guide the long-awaited charitable dollars to youth organizations. A real nail-biter!—Ruth McCambridge