Rupert Murdoch loses attempt to overhaul family trust in bitter legal dispute

Rupert Murdoch with his sons Lachlan Murdoch (L) and James Murdoch (R) with insets of Prudence (left) and Elisabeth (right) Photo / © NZME montage/Getty Images-2016 Max Mumby/Indigo/Getty

Rupert Murdoch’s attempt to amend his own family trust to leave his eldest son Lachlan in control of the family media empire has been blocked by a Nevada court.

In a sealed decision released at the weekend a Nevada court commissioner found Rupert and Lachlan Murdoch had acted in “bad faith” by trying to change the trust to leave Lachlan in control rather than his siblings, a person familiar with the matter said. The move would have cemented Rupert Murdoch’s legacy in driving a right-wing agenda across its media businesses such as Fox News.

The decision is a “resounding victory” for the three Murdoch children — James, Elisabeth and Prudence — who were at risk of losing control of the multibillion-dollar business after the death of their father, said one person familiar with the ruling.

The three said in a statement they welcomed the decision “and hope that we can move beyond this litigation to focus on strengthening and rebuilding relationships among all family members”.

Rupert Murdoch plans to appeal the decision, according to a source familiar with the case.

Murdoch, 93, had wanted to amend an irrevocable family trust to give his eldest son full control of its voting powers and decision-making after his death. Lachlan Murdoch runs Fox and News Corp, but control of the trust is set to be split between Rupert Murdoch’s four eldest children when he dies.

The trust was set up following Rupert Murdoch’s divorce from his second wife, Anna Torv, with each of her children awarded an equal voting right after the death of their father. Grace and Chloe, his children with his third wife, Wendi Deng, have an economic interest but no voting control.

The court case has made public the deep rifts within the billionaire Murdoch family, and throws open questions over the future of the empire after the patriarch dies.

Rather than securing Rupert Murdoch’s vision for the business, the court case has proven more divisive, with the two sisters siding with their brother James.

James has been long estranged from the family after losing out to Lachlan in the battle for control of the family’s media assets. Elizabeth in particular has tried to build bridges between the siblings and their father.

At stake is the future of a press empire that still influences conservative politics across the English-speaking world, spanning outlets including Fox News, The New York Post, The Wall Street Journal in the US, and the Sun and the Times in the UK.

The Murdoch family in September gathered in a Reno, Nevada, courthouse to argue their cases to the county probate commissioner. The case has taken place in secrecy, with courtroom proceedings and documents sealed off to the public.

© Financial Times