JUNEAU (AP) -- A Juneau Superior Court judge will decide whether shareholders of Huna Totem Corp. should be allowed to opt out of a $42 million trust. Shares in the trust are worth $350 each, so shareholders with the typical 100 shares would get $35,000 if they could cash out.
A lawsuit by dissident shareholders seeking the big payout went to trial this week.
Lawyers for the trust and for Huna Totem, the Native village corporation for Hoonah, say the trust has been a good thing for shareholders.
The trust was set up in 1994 with money the corporation got from selling operating losses on its logging operations to another corporation, giving that company a tax break worth millions. Huna Totem was paid accordingly.
Huna Totem's directors also serve as the trustees for the trust, which pays out 60 percent of its income to the 1,191 shareholders. The remaining 40 percent is reinvested for inflation-proofing. Last year, the trust also made a $50-per-share payout from the principal.
But shareholders who support the lawsuit say they thought they would be able to vote to change or end the trust five years after it was formed.
Some of them would rather have a large lump-sum payout instead of the stream of dividends. Joyce Skaflestad, a shareholder who supports the plaintiffs, said some shareholders are ill and could use the money.
Fred Triem, the plaintiffs' lawyer, said in his opening statement that Huna Totem said in 1994, when shareholders voted to form the trust, that they could vote on it again in five years. That belief was important to them in making their decision, he said.
But Barbara Nault, attorney for Huna Totem, told Collins the disaffected shareholders heard what they wanted to hear, and believed what they wanted to believe.
Huna Totem provided documents to shareholders that said the trust was perpetual and that outlined the procedures for the five-year review, she said. More than 80 percent of the shareholders then approved setting up the trust, she said.
Shareholders also ratified the trustees' recommendation for the $50 payout last year, according to defense lawyers.
Bruce Gagnon, attorney for the trust, told the judge that ending the trust would trample the rights of the other shareholders.
''It has been a very beneficial thing to all the shareholders,'' he said.
The non-jury trial is before Superior Court Judge Patricia A. Collins.
Peninsula Clarion © 2015. All Rights Reserved. | Contact Us