Rupert Murdoch loses legal fight to change family trust
The conservative leanings of Rupert Murdoch's newspaper and television empire could be in jeopardy after a Nevada probate commissioner rejected his bid to amend his irrevocable family trust to assure that his eldest child, Lachlan, would maintain control of his companies when he dies.
Edmund Gorman Jr., probate commissioner for the Second Judicial District Court in Reno, Nevada, issued his decision on Saturday.
Gorman concluded that the 93-year-old Murdoch and his son acted in "bad faith" by trying to change the family trust to exclude three of Lachlan's siblings from sharing control of the company, according to the sealed court opinion reportedly obtained by The New York Times.
Once Murdoch dies, the family trust requires Lachlan Murdoch to equally share control of their father's media empire with his siblings James, Elisabeth and Prudence.
Lachlan Murdoch reportedly shares his father's conservative political views, while James, Elisabeth and Prudence are considered less conservative.
"We welcome Commissioner Gorman’s decision and hope that we can move beyond this litigation to focus on strengthening and rebuilding relationships among all family members," a spokesperson for Prudence, Elisabeth and James Murdoch said in a statement to ABC News.
Rupert Murdoch's legal team declined to comment in response to multiple inquiries from ABC News.
Gorman came to his decision after holding a seven-day evidentiary hearing earlier this year.
Rupert Murdoch's attorneys argued that in order to preserve the commercial value of the media titan's businesses, the trust must be amended to allow Lachlan Murdoch to maintain control of the company.
Fox Corporation became a publicly traded company in 2019, the same year that 53-year-old Lachlan Murdoch was promoted to chairman and CEO of the Fox Corporation.
In September 2023, Rupert Murdoch announced he was retiring and taking on a new role as chairman emeritus, leaving Lachlan Murdoch as head of his media empire.
"On behalf of the FOX and News Corp boards of directors, leadership teams, and all the shareholders who have benefited from his hard work, I congratulate my father on his remarkable 70-year career," Lachlan Murdoch said in a statement at the time. "We thank him for his vision, his pioneering spirit, his steadfast determination, and the enduring legacy he leaves to the companies he founded and countless people he has impacted."
The litigation over the family trust exposed a rift in the Murdoch family, which had a falling out over a political disagreement after Rupert and Lachlan Murdoch pushed Fox News further to the right, ideologically, during President-elect Donald Trump's first term in the White House.
Rupert Murdoch's attorneys argued it was necessary to amend the family trust to preserve the commercial value of the media titan's businesses by allowing Lachlan Murdoch to maintain the conservative slant that his media outlets -- including Fox News, News Corp, the Wall Street Journal and the New York Post -- are known for. Murdoch's attorneys argued that the move was in the financial interest of all of the trust's beneficiaries.
But Gorman wrote in his decision, according to The Times, that efforts of Rupert and Lachlan Murdoch to change the family trust to ensure Lachlan's power over the company decisions for years to come was a "carefully crafted charade."
Gorman alleged that the intent of the proposed amendment to the trust would "permanently cement Lachlan Murdoch’s executive roles" in the company “regardless of the impacts such control would have over the companies or the beneficiaries” of the trust.
"The effort was an attempt to stack the deck in Lachlan Murdoch’s favor after Rupert Murdoch’s passing so that his succession would be immutable," Gorman wrote, according to The Times. "The play might have worked; but an evidentiary hearing, like a showdown in a game of poker, is where gamesmanship collides with the facts and at its conclusion, all the bluffs are called and the cards lie face up."
Gorman added, "The court, after considering the facts of this case in the light of the law, sees the cards for what they are and concludes this raw deal will not, over the signature of this probate commissioner, prevail."
The battle of changing the trust is not over. Gorman's recommendation to reject Rupert Murdoch's request now goes to a district judge who can ratify it or reject it.
Even if the district judge approves Gorman's recommendation, Rupert and Lachlan Murdoch could pursue other avenues to consolidate Lachlan's power in the company, including buying out his siblings' stake in the company, according to The Times.
Rupert Murdoch's two youngest children with his third-wife Wendi Deng were not involved in the litigation over the trust. They have been bequeathed an equal financial stake in the company, but no voting power, according to The Times.
ABC News' Tenzin Shakya contributed to this report.
