Herblaife Millions

A boy and the $400 million

Alex Hughes would be to inherit the majority of his father's Herbalife fortune. But meanwhile, his mother and also the estate's trustees have been in a bitter fight.

Los Angeles Occasions/September 13, 2005

By Robert W. Welkos

His title is Alex. He's 13 years of age. So when he reaches 35, he stands to inherit an estate now priced at about $400 million.

This L.A. golden child may be the only boy of Mark Hughes, the late founding father of Herbalife Worldwide, a maker of dietary supplements.

Hughes' death at 44 on May 21, 2000, made Alex the only beneficiary of the huge trust. The multimillionaire died of the lethal mixture of alcohol as well as an antidepressant following a consuming binge. The death was considered accidental.

But Alexander Reynolds Hughes has become at the middle of a extended and contentious probate fight in Los Angeles County Superior Court pitting his mother, Suzan Hughes, an old actress, court reporter and Miss Petite U.S.A., against trustees from the Hughes Family Trust. Mark and Suzan Hughes divorced 2 yrs before his death, in 1998, after nearly ten years of marriage. She was the 3rd of his four spouses.

Suzan Hughes wants the court to oust the trustees, who include Alex's paternal grandfather. She formerly attempted - and unsuccessful - to influence the courts to get rid of the trustees on grounds of breaking their fiduciary responsibilities. Now, she's filed another petition seeking their removal on other grounds.

Hillel Chodos, her attorney, claims the trustees have compensated themselves millions in costs while disregarding Alex's needs.

"Essentially, they were given the gold mine and [Alex] got the shaft," Chodos stated. "They've compensated themselves a minimum of $5 million in trustee costs up to now - maybe more. They compensated their lawyers and an accounting firm maybe $12 million to $15 million."

But lawyers for that trust have fired in court papers, accusing Suzan Hughes of fighting a "personal vendetta" from the managers from the Hughes trust. They describe the case as "probably the most contentious trust and estate proceedings on record."

Which, they explain, comes despite the fact that the trustees have accomplished "enormous success in giving the nearly $400-million estate Mark left out (e.g. - they saved a lot more than $100 million in estate taxes, they structured a purchase of Mark's company for any cost which was roughly two times the marketplace cost immediately before his death, plus they effectively opposed nearly $500 million in claims)."

"While Suzan gripes noisally within the legal costs suffered by the fiduciaries, the plain details demonstrate to her to become the real cause from the expenses," the court papers state. "The fiduciaries submit that overview of a brief history of those matters results in the final outcome the administration is not complicated by any fault of their own, but rather by Suzan Hughes' desire to get into the cash Mark left for Alex (and never on her)."

"The trustees do their finest to develop the assets," stated Kenneth A. Ziskin, a lawyer for that trust. "If they're effective, you will see way over fifty percent-a-billion dollars" when Alex reaches 35.

The trustees include Alex's paternal grandfather, Jack Reynolds, former Herbalife leader Christopher Pair, who had been a longtime friend of Mark Hughes, and Conrad Lee Klein, a lawyer who had been Mark Hughes' personal counsel for nearly two decades. Klein may be the husband of California Appeals Court justice Joan Dempsey Klein and served for several years being an executive officer of Herbalife. (No parties, including Alex and the mother, maintained financial ties to Herbalife after its purchase.)

Under the trust, Alex will get one-third from the trust's annual earnings - or about $a million knowing by present day value - together with one more $35 million from the separate custodial account, when he reaches age 25. At 30, he could be prepared to receive about $two million yearly. Then, at 35, he'll receive whatever remains within the trust, Ziskin stated.

"That's presuming they still have the cash when he reaches be 35," Chodos stated. "Suzan wants [Alex] to achieve the existence his father meant for him.... Their fundamental attitude is they would like to control everything. They detest Suzan. She's belittled them. They tend not to be belittled."

A onetime juvenile delinquent, Mark Hughes founded Herbalife in 1980, using his tale of the rags-to-riches past and the mother's early death from dependence on weight loss supplements to market the planet on his weight-loss program. Herbalife depended with an worldwide network of independent marketers to pitch the business's type of herbal and weight-loss items.

The charming Hughes, together with his Prince Valiant hair do and costly suits, appeared to become a walking success story in public places. But behind the curtain, aides hidden his consuming problem.

Attorney Edward A. Forest, who signifies the trust in the present lawsuit, noted the trustees want to sit lower with Alex and discover what he wants, but his mother, who's Alex's legal protector, has blocked such attempts.

"All of the trustees wish to accomplish is come with an chance to go to with and connect to Alex," Forest stated. "Does he desire a ski visit to Europe, or does mom desire a ski visit to Europe? Does he want to visit camp ... or even the South of France? Does he require a chandelier or would he be quite happy with something from IKEA? The almighty knows there's sufficient profit the estate. However the trustees come with an obligation under California law to exercise their discretion."

Ziskin stated the trustees were so worried about such a deluxe and extravagant lifestyle might caused by Alex at his age they consulted a mental health specialist, who they stated has already established many dealings with wealthy children, in addition to a rabbi who authored a magazine on people of great wealth. "Both of them cautioned the trustees that supplying enough money to ensure that Alex would live a luxurious and lavish lifestyle would most likely 't be great for him - 't be healthy," Ziskin stated. "We shared individuals conclusions with Suzan and she or he didn't agree."

Lawyers for sides say Alex is really a normal, well-modified boy.

Chodos claims the estate has managed to get a hardship on Alex to retrieve household products along with other keepsakes from Grayhall, the 22,000-square-feet mansion which was offered this past year for any reported $18 million.

"Alex had spent half his time at Mark Hughes' house in Beverly Hillsides," Chodos stated. "Suzan wanted a few of the furniture. They fought against her for 4 years on that. Actually, once they agreed to give [the furnishings] to Alex, they offered it for an antique dealer. Suzan needed to go and purchase it. Which was shocking."

The products incorporated "chairs, barstools, Aubbasson pillows, entry way lamps, fire place irons, a gilded mirror, candelabra, a console in the Netherlands along with a chandelier from France."

But, trustees wondered, were these the sorts of products a boy want - or his mother?

The newest bone of contention between your trust and Suzan Hughes involves her demands the trust spend the money for rent on the Malibu summer time vacation home for Alex. Chodos claims the trust has, up to now, compensated only $50,000 for any holiday for Alex.

This summer time, Suzan Hughes filed a lawsuit against trustee Pair alleging sexual harassment. She suggests in her own suit that although wrangling over her request the trust pay $160,000 for 2 months' rental on the Malibu vacation home for Alex, Pair telephoned her in your own home on June 27. It had been the very first time he'd spoken to her in 3 years. Based on the court papers, Pair told Suzan he loved Alex and was calling to ask him, together with Pair's boy, to go to a free showing from the King Tut exhibit in the Los Angeles County Museum of Art your evening.

She claims that throughout the phone call, she requested him why the trustees only wanted to cover one month's rent around the summer time home and, based on the suit, he responded that they could obtain money for 2 month's rent "if she'd be nice to him."

"You realize everybody always were built with a factor for you personally,Inch he allegedly informed her, based on the suit. "You are among the most breathtaking, not possible women on the planet. Here's home phone number and call me when you are prepared to produce what I want." When she told him his remarks were "crazy," he allegedly responded: "How crazy would you like to get?"

Your evening, she required her boy towards the museum. Within the suit she states that because they were heading down the hall to go in the area that contains King Tut's remains, Pair contacted her and stated, "I'll enable you to get in your knees eventually. I am likely to [expletive erased] you some way."

"The suit is completely without merit and I am deeply upset and saddened she'd turn to such tactics," Pair stated in reaction towards the lawsuit.

His attorney, Don Mike Anthony, referred to Suzan Hughes' lawsuit because the legal same as "World War III" being fought from the trustees and noted that "huge lawyers costs happen to be incurred due to all her lawsuit."

Under her divorce settlement, Suzan Hughes receives $10,000 per month in direct supporting your children and also the trust pays roughly $100,000 for property taxes and insurance on her behalf home, for Alex's tuition in the Windward School in West L.A., as well as for his medical expenses and health care insurance.

Court papers filed on Suzan Hughes' account state that "supporting your children didn't consider the lavish lifestyle which was presented to Alex by his father when Mark was alive coupled with custody of the children of Alex. This lifestyle incorporated travelling with Mark at his lavish beach home, cruising on Mark's yacht, driving in Mark's number of luxury cars go to occasions of remarkable prestige, lavishness and extravagance."

She's requested the trust to pay her for Alex's expenses and also to make annual obligations of $877,000 in after-tax dollars "to ensure that Alex will continue to live the life-style he loved while his father was alive." Chodos stated Alex's expenses include legal costs, charitable giving and accounting advice.

The trust's lawyers think that Alex's mother has fought her legal fight for 2 reasons: her attempt along with other bidders to get Herbalife after her ex-husband's death was declined through the trustees, and, she may think that her divorce settlement was "insubstantial" when in comparison towards the payout received by Mark Hughes' 4th and final wife, Darcy LaPier Hughes. The first kind Hawaiian Tropic model, who married Hughes on Valentine's 1999 after previous partnerships to Hollywood action star Jean-Claude Van Damme and Hawaiian Tropic founder Ron Grain, apparently received a $34-million settlement.

But lawyers for that trust estimate Suzan Hughes' internet worth more than $ten million, having a yearly earnings in excess of $600,000.

Yet, they assert in court documents, "her wealth apparently fails to deliver of the items she thinks she's titled to."

Suzan Hughes wouldn't comment with this story around the advice of her attorney.

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