A Chicago lawyer and the son of a prominent Ft. Wayne, Ind., banking executive has sued a financial advisory firm he claims bungled the division of a trust established to manage the assets of his late father, saying the firm should be made to pay for allowing the trust to miss out on a bull market, costing the trust at least $2 million in potentially lost investment returns.
In July, plaintiff Richard D. Doermer, who practices law in Chicago, filed a complaint in Cook County Circuit Court against Carmel, Ind.-based investment advisory firm Oxford Financial Group. According to the lawsuit, Oxford Financial oversees more than $20 billion in assets for more than 700 families and investment groups in at least 37 U.S. states.
On Aug. 22, Oxford filed notice of its intent to remove the case to Chicago federal court.
The case centered on the handling of a trust established to oversee millions of dollars in assets passed down from Doermer’s father, Richard T. Doermer, who died in 2010 at the age of 87.
According to an obituary published upon his death, the elder Doermer had “a long and illustrious career in banking,” beginning in the 1950s. He served as president of Indiana Bank and Trust beginning in 1957, and under his watch, the bank grew and became Summit Bank. Summit Bank was acquired by NBD Bancorp in the 1990s. Richard T. Doermer retired in 1993.
The elder Doermer also served on a number of Indiana corporate boards, including serving as vice chairman at Avis Industrial Corporation, an Upland, Ind.-based holding company which specializes on acquiring subsidiary manufacturing companies.
According to the younger Doermer’s lawsuit, he and his sister, identified in the complaint as Kathryn Callen, as Doermer’s only children, could not agree on how to manage the assets their father had left behind.
In 2012, the lawsuit said Callen hired Oxford Financial to advise them on how to manage the assets. The firm purportedly advised splitting the trust into two – one trust for Doermer and his heirs, and the other for Callen and hers.
Each trust was to contain more than $7 million.
Doermer said he agreed to the move.
However, as the months wore on, Doermer alleged Oxford’s actions, purportedly to advise on how to divide and manage the funds of the trust, unnecessarily delayed the task, as Callen, purportedly acting on their guidance, refused to sign the final agreement authorizing the division.
“The continuum of wrongful actions of Oxford Financial … significantly delayed and protracted the process and prevented the Issue Trust from being converted to a directed trust and divided into two separate individual trusts, and to have the securities and assets of the Issue Trust actively invested and diversified with suitable investment allocation,” Doermer’s lawsuit alleged.
Doermer said he obtained an order from a judge in South Dakota – the state in which the trust was situated, due to more “favorable” laws governing trusts, according to Doermer’s complaint – ordering the trust to be placed under the management of other financial advisers, who “are now providing, for the first time, active investment of securities and assets, diversification, suitability, prudent investment allocation, and active and proper wealth management of the Issue Trust.”
Doermer, however, estimated the delays cost the Doermer Trust more than $2 million in lost “reasonable investment opportunities during a Bull Market,” according to the lawsuit.
Doermer has alleged Oxford Financial breached its fiduciary duty to the trust. His lawsuit also included a count of gross negligence and willful and wanton misconduct against the firm.
He has asked the court to award compensatory damages, plus unspecified punitive damages and attorney fees.
Doermer is represented in the action by attorneys Dom J. Rizzi and John Scheflow, of the firm of Cafferty Clobes Meriwether & Sprengel, of Chicago.
Oxford Financial is represented by attorneys with the firm of Barnes & Thornburg, of Chicago.