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The Honolulu Advertiser
Posted on: Sunday, June 19, 2005

Damon heiresses ready to cash in

By Rick Daysog
Advertiser Staff Writer

Sharon Damon and Madeleine Wright are the trust-fund equivalents of lottery winners, but don't expect any fanfare when they accept their big payout.

Sharon Damon in 1980

Madeleine Wright in 2004
The heirs to the Estate of Samuel Mills Damon could inherit as much as $100 million each when the state Supreme Court rules on how the storied real-estate and banking trust can distribute its assets to the Damon family.

The sisters — 56-year-old Madeleine of Pebble Beach, Calif., and 58-year-old Sharon of Carmel, Calif. — lead quiet, almost secretive lives after having shunned their local roots for the scenic coast near Monterey, Calif.

Several relatives said they have been out of touch with the sisters for more than a decade.

"I haven't seen either of them in 15 years," said Michael Haig, a second cousin to the sisters. "They basically have been living on the Mainland and don't attend the (family) meetings."

Sharon Damon has an unlisted phone number and her attorney, Warren Price, declined to comment for this article. Wright did not return calls to her home.

The sisters are the great-granddaughters of Samuel Mills Damon, the ex-minister of finance under Queen Lili'uokalani who followed Charles Reed Bishop as head of First Hawaiian Bank's predecessor, Bishop & Co.

The elder Damon was one of the first trustees of the Kamehameha Schools and saw his fortune swell when Princess Bernice Pauahi Bishop gave him the entire ahupua'a, or land division, of Moanalua, which at the time extended from the Moanalua hillside down to Sand Island and the area next to what is now Honolulu International Airport.

Until recently, the estate boasted assets of about $900 million and was the fifth-largest private landowner in Hawai'i with more than 121,000 acres. It also was First Hawaiian's largest shareholder before it sold its stake to BNP Paribas several years ago.

Samuel Mills Damon's will stated that the assets of the estate would be held in trust until the death of his last grandchild. Last November, the last surviving grandchild, 84-year-old Joan Damon Haig, died in New Jersey. In December, the trust began distributing assets to beneficiaries.

Appeal is pending

Sharon Damon and Madeleine Wright received $24 million each as a result of that distribution.

The Estate of Samuel Mills Damon

Founded: 1924

Assets: $252.3 million

2004 income: $34.5 million

Number of beneficiaries: About 20

Trustees: Walter Dods, David Haig, Fred Weyand and Paul Mullin Ganley

2004 trustees pay: $1.3 million each

Source: Estate of Samuel Mills Damon court filings

The sisters could receive another $75 million each should the state Supreme Court uphold the trust's distribution scheme, which gives each of them about one-eighth of the trust's assets, the largest share.

The Circuit Court ruled in 2001 that the distribution scheme was valid, and the Supreme Court upheld that decision. Members of the Damon family filed an appeal in 2003, which is now pending before the high court.

The $100 million payout would be the largest transfer by any land trust in Hawai'i to a single beneficiary.

Growing up in the Damon household, money was never a problem for Wright or Sharon Damon, said Benjamin "Buzzy" Kneubel, who was married to Sharon Damon from 1966 to 1970. Kneubel lives on Maui, where he works as a longshoreman.

Kneubel recalled that when his ex-wife turned 20, she successfully petitioned her father's trust to buy her a green 912 Porsche sports car.

Shortly after that, Damon's father's estate gave the couple $38,000 to build a home on Maui, state Probate Court records show.

Since turning 21, the sisters each have received about one-eighth of the trust's yearly income. In recent years, their share has amounted to about $5 million per sister annually.

'Kind of eccentric'

Neither Sharon Damon nor Wright hold a traditional job, although Wright records and produces Christian spiritual music, according to Haig.

For a while, Sharon Damon lived in a place on Maui called Hiranyaloka Farm, which got its name from the Hindu religion, before moving to California, Kneubel said.

"The Damon heirs have always been kind of eccentric," said local historian Bob Dye.

Despite the high incomes, the sisters have run into problems with paying taxes.

In 1991, the state Department of Taxation issued a lien against Wright for failing to pay $19,887 in income taxes for 1989. The department issued a similar tax lien against Wright in 1980 for failing to pay $39,128 in state income taxes in 1978.

Sharon Damon's finances didn't fare much better.

In 1987, the Internal Revenue Service filed a lien against Sharon Damon for failing to pay $132,586 in taxes for 1985.

That came after the IRS issued a tax lien against Sharon Damon for failing to pay $95,290 in income taxes for 1974.

"Truthfully, I think because she's rich, she has never had to work, so she hadn't learned the value of struggling," said Kneubel of his ex-wife.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com or 525-8064.