I recently received an e-mail soliciting feedback on Estate Planning and baseball. I discovered that Sheel Kamal Seidler (“Sheel”), the widow of San Diego Padres (“Padres”) owner, Peter Seidler (“Peter”), filed a lawsuit in Texas accusing her brothers-in-law, Robert Seidler (“Robert”) and Matthew Seidler (“Matthew”), of various misdeeds in handling Peter’s Estate and Trust. Peter had an interesting story. He was one of ten children born to Roland Seidler and Terry O’Malley Seidler. Peter’s mother was one of the few women who served as principal owner of a Major League Baseball team, inheriting half of the ownership interest in the Los Angeles Dodgers after her father, Walter O’Malley, died in 1979. In 1992, Peter founded Seidler Equity Partners (“SEP”) and eventually invited his brothers, Matthew and Robert, to join him in that endeavor. Peter married Sheel in 2008, and they remained married until his death on November 14, 2023. They had three children together. In 2012, Peter, his uncle, Peter O’Malley, and Ron Fowler formed the O’Malley group to purchase the Padres. Peter served as chairman of the Padres from 2020 until his death.
Sheel’s Complaint
Peter, Sheel, and their children resided in the community property state of Texas. Peter created the Peter Seidler Revocable Trust on January 19, 2001 (“PS Trust”) naming himself as beneficiary and Trustee. He amended and restated the PS Trust on June 20, 2019, and again on July 18, 2021 (“2021 Amendment and Restatement”). He executed two amendments to the 2021 Amendment and Restatement, neither of which is at issue. Upon Peter’s death, Robert became Trustee of the PS Trust and Executor of Peter’s Estate. Robert resigned both fiduciary positions in May 2024 and Matthew began serving as Executor and Trustee. According to the complaint filed by Sheel, the PS Trust assets include “the largest single ownership block and explicit control rights of the Padres professional baseball team.” The block and control rights form the basis for Sheel’s complaint.
HEMS
Upon Peter’s death, the PS Trust requires the Trustee to divide the Trust into an Exemption Trust and a Marital Trust. The Exemption Trust consists of an amount equal to Peter’s remaining generation-skipping transfer tax exemption and the remainder funds the Marital Trust. Both Trusts name Sheel as the sole income beneficiary during her lifetime and allow the Trustee to make distributions of principal to her for her health, education, maintenance and support in her accustomed standard of living as of Peter’s death. Upon Sheel’s death, the assets in both trusts pass to the Seidler 2012 Irrevocable Trust the provisions, beneficiaries, and Trustees of which are unknown.
Peter’s Legacy
Sheel filed suit in Travis County, Texas on January 6, 2025. The lawsuit contains nine counts and numerous allegations regarding the Trustee’s inaction and breach of fiduciary duties found here in Cause No. C-1-PB-25-000023, Sheel Kamal Seidler vs. Matthew Seidler and Robert Seidler. First, Sheel alleges that since Peter’s death, the Trustee failed to fund either the Exemption Trust or the Marital Trust, disregarding the terms of Peter’s Will and Trust and “intentionally schemed to take for themselves the Estate and Seidler Trusts’ valuable rights and assets” by misleading and demeaning Sheel, engaging in self-dealing and using Trust assets to pay attorneys’ fees. Sheel’s complaint alleges that the Trustee used Trust assets improperly by paying personal obligations and suggesting that the Trusts owe Robert and Matthew money. The complaint also contains allegations that the Trustee has denied distributions, information, and other intangible benefits to Sheel, including naming her as the “Control Person” for the Padres. According to the complaint, the Control Person for a Major League Baseball Team wields significant power over the management and business affairs of the team and conveys the right to control the future of the franchise and ownership interests. Peter served as the Control Person of the Padres during his lifetime and left the ability to appoint the Control Person at the discretion of the Trustee of the PS Trust. Finally, the Complaint accuses Robert and Matthew of trying to erase Peter’s vision and legacy and insert themselves as Peter’s true heirs. Sheel’s lawsuit asks the court to remove Matthew as Trustee and to name her as Control Person among numerous other requests for relief.
Fiduciaries
Million-dollar estates that end up in litigation provide wonderful learning opportunities for Trust and Estate practitioners and their clients. First, exercise care when naming individuals as fiduciaries. Presumably, Peter believed that his brothers would divide the PS Trust and make distributions from the Trust to Sheel and their children. The documents make clear that Peter named his brothers as Trustees but also makes clear that the entire estate benefits Sheel and their children. Interestingly, the PS Trust requires all Trustees to be Independent Trustees thereby eliminating the possibility of Sheel serving as Trustee. Even more fascinating was that this was the first marriage for both Sheel and Peter and neither had any children other than the three they had together. Spouses in first marriages who share all the same children often name the other as successor Trustee or give them the right to veto certain Trustee decisions. That didn’t happen here and there’s nothing to indicate the underlying reasons.
Contingency Planning
Next, make sure that your documents clearly lay out your plans and address alternate scenarios. Sheel and Matthew have each asserted different individuals to serve as Control Person. The Complaint submitted by Sheel contains what she purports is Peter’s handwritten list of candidates to serve as Control Person after his death. Sheel was at the top of that list and Peter’s brothers were several spots down. Matthew counters that assertion in a letter penned to the Padres community and indicates that Peter always intended for one of his siblings to serve in that role. That letter further indicates that Sheel signed a document agreeing that she had no right to become or designate the Control Person and foregoing initiation of any legal proceeding seeking to become the Control Person upon Peter’s death. The court record contains no copies of those documents, but that may change as this case progresses.
Litigation
The Defendants have yet to file any responsive pleading, although Matthew’s letter to the Padres’ community may give us a preview of the defense. Even if Peter intended for one of his brothers to serve as Control Person, it appears that few or none of the usual actions required by a successor Trustee after taking office have occurred since Peter’s death. While intriguing, it’s unfortunate that this matter will play out on a public stage. Typically, when litigation ensues, only the lawyers benefit as will no doubt be the case here. Litigation takes time and costs money during periods of significant grief. Given the complex nature of this case, we will no doubt have a front-row seat to watch the drama unfold.
Find peace for your family with a Will or Trust from Gaughan & Connealy: https://www.midwestestateplan.com/meet-with-chris-gaughan-or-casey-connealy/.
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