Client Wins $25.6 Million in Trust Mismanagement Case Against HSBC
After a lengthy, two-phase trial, Erie County Surrogate Judge Barbara Howe last week ordered HSBC Bank USA, N.A. to pay seven Knox family trusts a total of $25,588,875 to compensate for the bank’s negligent management of trusts that had been set up for various members of the family of Seymour H. Knox III, the former Buffalo Sabres owner and area philanthropist who died in 1996.
In the largest of the seven matters before the court, Judge Howe sustained the objections of guardian ad litem Daniel C. Oliverio and his co-counsel John L. Sinatra, Jr., partners in Hodgson Russ’s Business Litigation Practice Group, for HSBC’s mismanagement of a trust created in 1957 by Seymour H. Knox II. Judge Howe found that, as a result of decades of inattention and negligence, this trust suffered over $21 million in damages. Dan had been appointed by the court to act as the guardian for minor grandchildren of Seymour H. Knox III. According to Dan, “This award rights decades of wrongs by the corporate trustee, and replenishes a trust that had been allowed to deteriorate over time because of bad decision-making and, in some cases, outright inattention dating back to the Marine Midland era of HSBC’s history.”
Dan and John also recovered $1.6 million on four other trusts that HSBC was found to have mismanaged.
Adult members of the Knox family were represented by Donald G. McGrath and Dennis P. Cleary, who recovered $2 million for a Seymour H. Knox IV trust and another $484,000 on a trust created for Seymour H. Knox III’s widow, Jean R. Knox.