Rupert Murdoch Facing Uphill Battle In Family Feud

Rupert Murdoch’s attempt to change his family trust to consolidate his son Lachlan’s leadership of his global media empire — and lock in its conservative editorial direction after his death — now depends on a long-shot move in the highly specialized Nevada probate court system.

According to The NY Times, the first step for Murdoch is to try to persuade a district court judge in Reno to reject a local commissioner’s harsh ruling this month that he had acted in “bad faith” when he moved secretly to change the trust that left control of his empire divided equally among his four oldest children. Mr. Murdoch’s brief challenging that opinion is now due by Monday.

If Murdoch fails, and the commissioner’s recommendation is ratified by the judge, his lawyers have said Mr. Murdoch will appeal the probate court’s decision. Under the Nevada system, that appeal would be filed directly to the State Supreme Court.

To prevail, Mr. Murdoch, 93, will have to clear a high legal bar — proving that the Nevada probate commissioner’s finding of bad faith was “clearly erroneous,” according to the rules of the Reno-based court circuit.

That might prove especially difficult, he said, because of the breadth and unequivocal language of the Dec. 7 recommendation that the probate commissioner, Edmund J. Gorman, filed under seal this month.

The 96-page opinion, which was obtained by The New York Times, concluded that Murdoch’s bid to change the Murdoch Family Trust was “a carefully crafted charade” to lock Lachlan in place as Mr. Murdoch’s successor and take power away from three of Lachlan’s siblings.

If Murdoch and Lachlan can overcome the decision and succeed in amending the trust, Lachlan will be able not only to consolidate his voting power over the Murdoch empire but also, in effect, to control his siblings’ shares. If they fail, Lachlan may have no choice but to buy out his siblings — perhaps at a premium now, because of the commissioner’s ruling — to retain control of the empire.

The general contours of the trust date back to Rupert Murdoch’s 1999 divorce from his second wife, Anna. As part of their settlement, she insisted that his four children at the time — Prue, Elisabeth, James and Lachlan — share equal control of the Murdoch trust upon his death. The trust holds the family voting shares that control the world’s most powerful conservative media empire, which includes Fox News, The Wall Street Journal, and major newspapers and television outlets in Australia and Britain.