Double lawsuits against Klein Estate prompt attorney reaction
Michael Klein’s ex-wife has filed a wrongful death lawsuit on behalf of their daughter against his estate and other parties. Until his death Klein ran Pacificor, the Santa Barbara-based hedge fund.
Michael Klein’s daughter, Talia Klein, 13, died with him when a small plane carrying them crashed into a mountainside in Panama on Dec. 23, 2007.
Also aboard the plane were a pilot and Francesca Lewis, a friend of Talia Klein who was 12 at the time. In addition to Michael and Talia Klein, the crash killed the pilot, but Lewis survived.
Lewis’ family has filed a personal-injury suit related to the crash.
The complaints, both filed the week of July 14, did not name a dollar figure being sought. As a legal precursor to filing suit, however, each family had filed claims against Michael Klein’s estate, totaling $525 million.
The estate rejected the claims, opening the door to civil suits.
In an interview with the Business Times, Stuart Fraenkel, the Los Angeles-based attorney handling the wrongful death lawsuit, said of the damages sought, “We primarily leave that up to the discretion of a jury.” He said juries have awarded large judgments in similar cases in the past.
Both suits allege that Michael Klein, 37, was a licensed pilot who should have known the limitations of the single-engine Cessna 172N aircraft carrying the group. They allege that he or the plane’s pilot “intentionally, recklessly, and in conscious disregard for the safety of others, flew, or directed the flight” of the craft off its slated course and into dangerous weather to scout properties for a business interest.
The assertion that Michael Klein or the pilot acted in relation to a business interest is key if the plaintiffs hope to connect liability for the crash to Pacificor and other businesses named as defendants in the suit. Gary Hill, the Santa Barbara attorney representing Pacificor in the cases, rejects that notion.
“Neither the trip nor the accident had anything to do with the business activities of Pacificor,” Hill said. “Pacificor, along with many other entities in which it is believed Michael Klein had an interest, have been named based upon the mistaken belief that Michael Klein was somehow acting on their behalf at the time of the accident.”
Hill also represents Michael Klein’s estate and trust. “From the point of view of the trust and estate, we do not believe that they or Michael Klein [are] in any way legally responsible for the aircraft accident which occurred while he was vacationing in Panama,” Hill said.
Pacificor reported it manages more than $530 million in its most recent disclosure with the Securities and Exchange Commission. Earlier this month, Pacificor gained control of Michigan-based Dura Automotive, a publicly traded company that recently emerged from Chapter 11 bankruptcy.
Pacificor is named as a defendant in two multi-million-dollar legal battles separate from the wrongful death and personal injury suits. Company representatives have denied the allegations in those suits and have said they expect the complaints against Pacificor to be dismissed.
Kurt Benjamin, the company’s senior vice president of business development, said legal proceedings have not hindered Pacificor.
“On the contrary, we are and will continue to be completely focused on our core business, which is in the midst of entering the most opportune period in the company’s long history,” Benjamin said.
Michael Klein, a rising star in the hedge fund scene, graduated from the University of California, Santa Barbara, at the age of 17. He sold several successful companies before he died.
This story was originally posted at 3:28 p.m. July 24, 2008, and was last updated at 1:16 p.m. July 28, 2008. For the full story, see the Aug. 1 issue of the Pacific Coast Business Times.
