Heirs of Standard Register Founders Sue Fifth Third Bank Over Trust Funds
The “Standard Register Co.” name hasn’t been talked of much since the rebranding to Taylor Communications occurred. But a new lawsuit is changing that.
According to Bank Investment Consultant, three heirs of the Standard Register Co. founders have taken Fifth Third Bank to court, accusing it of failing to “diversify their trust funds properly.”
Founded in Dayton, Ohio in 1912 by brothers William Sherman and John Sherman, Standard Register Co.’s pinfeed autographic register cemented the printer’s spot as an industry heavyweight over the years, with sales volumes growing to more than $700 million in the ‘80s alone. The company later endured several challenges, including corporate restructurings, a 5-for-1 reverse stock split and de-listing warnings from the New York Stock Exchange. Standard Register Co. hoped to strengthen revenue and add to its local workforce after purchasing local competitor WorkflowOne in a transaction valued at $218 million.
Two years later, however, Standard Register Co. filed for Chapter 11 bankruptcy-court protection, with a $275 million buyout offer from existing lender Silver Point Capital L.P. The story took some surprising turns, ending in an auction, where North Mankato, Minnesota-based Taylor Corporation swooped in with a last-minute bid for $307 million.
The founders’ two great nieces, Helen Clarke Helton and Catherine Clarke, and their great nephew, James W. Clarke, initiated the lawsuit against Fifth Third, alleging that the holdings in their trusts were “overly concentrated in the shares of Standard Register.” Via Bank Investment Consultant:
In the ongoing case, the family blasts Fifth Third, which served as trustee, for breaching its fiduciary duty and acting with ‘legal malice and with reckless disregard for their legal rights. They argue that Fifth Third should have told them that their trusts were not diversified.
Court documents revealed that the trusts, which were once allegedly worth more than $200 million, are no longer valuable—according to the family.
Also in court documents, obtained by Bank Investment Consultant, Fifth Third argued that the trusts “expressly exculpated” the bank from any liability for retaining Standard Register stock in the trusts. In its motion to dismiss the case, Fifth Third stated:
Any assertion that Fifth Third should have, without authorization from all beneficiaries, reduced its holdings in Standard Register … is an assertion that Fifth Third should have disregarded the intent of the grantor and, indeed, breached its fiduciary duties.
The court denied the bank’s motion in January 2016.
The Standard Register Co. heirs are seeking in excess of $25,000 in compensatory damages and punitive damages to be determined at trial.