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Therese Reined It In
WOULD $5.2M make you update your legacy documents?
THERESE Rein, wife of federal Labor leader Kevin Rudd, bought shares with a market value of $5.2million from the estate of her dead business partner for a tenth of their worth.
When the executors of the estate tried to stop the sale, Ms Rein took them to the Queensland Supreme Court until they relented, a month ago.
Ms Rein filed a lawsuit last July in which she argued that Frances Jane Edwards, a former nun and physiotherapist who helped establish Ms Rein's successful company Work Directions Australia, now known as Ingeus, had agreed to sell her 5200 shares in the company if she died.
Ms Rein and Edwards - the founding shareholders in the company - signed an agreement on or about May 22, 1998, declaring that their shares would be sold to the other, for a pre-determined price of $100 a share, if either of them died.
Under the agreement, if Ms Rein had predeceased her partner, her beneficiaries would have received the same amount.
Ingeus had revenues of $175million last year and employs 1300 people in 66 offices worldwide. The company is the third-largest provider of services to the federal Government's Job Network Agency.
Edwards had been ill for more than 10 years when she died, of cancer and renal failure, on January 21 last year. She was 74, and had never married. Edwards's will - which she actioned two days before her death but was too ill to sign - left the bulk of her estate to her sister, Martha Sirovs.
Within weeks of the Supreme Court granting probate to three executors, Ms Rein gave notice, on June 21, of her intention to buy the Ingeus shares in accordance with the agreement and sent a cheque for $520,000 and a share transfer form the following day.
When the executors blocked the sale, Ms Rein asked the court to enforce the terms of the original agreement and award her costs. Ms Rein - who resigned as chair of Ingeus last year but remains on the board and is understood to now have 13,000 shares in the company - withdrew the lawsuit on January 23.
She last night told The Australian the dispute was resolved out of court when the executors agreed to sell the shares for $520,000. "That agreement was upheld to the letter and honoured and the matter was resolved."
The Australian understands Ms Rein owns 13,000 shares in Ingeus worth $13 million, according to a KPMG valuation from June 2004 filed with the court.
The executors, in a defence filed in the court, had disputed the terms of the agreement, and argued Ms Rein had altered the company so much since 1998 the agreement had become void.
Since Edwards signed the agreement, the company has been renamed, three other directors - including former Queensland premier Wayne Goss - had been appointed to the Ingeus board, shares had been sold to nine other parties and the company was no longer a proprietary company. Furthermore, a new constitution filed in 2002 also departed from the terms of the 1998 agreement.
The executors also noted that Edwards's role in the company had changed and the company's profitability had increased, as had the value of the company and its shares, which, at June 30, 2004, were worth approximately $1000 - 10 times as much as listed in the agreement.
Ms Sirovs said yesterday "there is really no problem with the whole situation" but otherwise would not comment on Ms Rein's pursuit of the shares.
The executors' solicitor, Harrold Littler, confirmed the matter had been resolved out of court.
THE AUSTRALIAN FEBRUARY 21, 2007 | Sean Parnell, Brisbane