The $14 million recouped in a two-year battle by the state for millions of dollars for Kamehameha Schools from the alleged mismanagement of its former trustees will be turned over to the $6 billion trust today.
The state will present Kamehameha Schools with a check this afternoon from a settlement it reached with the five former trustees of what was previously known as the Bishop Estate.
The trust, established by the 1884 will of Princess Bernice Pauahi Bishop, operates Kamehameha Schools and provides for the education of Hawaiian children. The revered Hawaiian institution was rocked by more than three years of controversy over alleged mismanagement by former trustees that ultimately led to their ouster. As investigations and legal proceedings that began in 1997 are drawing to a close, the payment represents one of the final chapters.
The check will be presented by Attorney General Earl Anzai to Kamehameha Schools chief executive officer Hamilton McCubbin. It is part of an Internal Revenue Service settlement, which totals about $20 million. The attorney generals office will receive $1.3 million to cover expenses; another $4.9 million will pay for attorneys fees incurred by the former trustees.
The settlement will be paid by Federal Insurance Co., which insured the estate and the former trustees. The agreement called off what was expected to be a long and costly trial over claims by the state that the five trustees should pay the estate for losses caused by their alleged mismanagement.
Former trustees Henry Peters, Richard "Dickie" Wong, Lokelani Lindsey and Gerard Jervis were removed from their appointed positions and Oswald Stender resigned in May 1999. They denied any wrongdoing and will not have to pay the estate out of their own pockets.