A group of Louisiana law firms filed a lawsuit last week against the Edward Wisner Donation, a lucrative land trust controlled in part by the city of New Orleans. The suit primarily seeks to resolve a longstanding dispute over legal fees, but the firms are also asking a judge to undo a potentially costly agreement inked last year between New Orleans Mayor LaToya Cantrell and other Wisner Donation beneficiaries.
As The Lens previously reported, Cantrell agreed last year to continue the century-old trust — which was meant to terminate and transfer to full city control seven years ago — in perpetuity. Had the trust terminated, the city could have taken sole ownership of about 50,000 acres of land, along with millions of dollars in lease payments that land generates every year.
But under the 2020 deal, the city will continue to split control of the land and the lease revenue with several other beneficiaries, including a group of heirs to the trust’s namesake: philanthropist Edward Wisner, who donated the land and established the trust in 1914.
The Cantrell administration did not explain why it agreed to the deal when approached by The Lens late last year, and there are questions about its legality. A spokesman for Mayor LaToya Cantrell declined to comment for this story.
Five law firms are listed as plaintiffs in the recent suit: Herman, Herman & Katz, L.L.C., Domengeaux, Wright, Roy & Edwards, L.L.C., Leger & Shaw, L.L.C., Fayard & Honeycutt, A.P.C., and Fred Herman P.L.C. All previously represented the Wisner Donation in a 2013 lawsuit against BP, TransOcean, and Halliburton over the 2010 Deepwater Horizon oil spill.
In 2016, the firms reached a settlement totaling $30 million to recover damages from the spill. But they continued to pursue additional punitive damages against TransOcean and Halliburton through a settlement program, eventually securing $7 million for the trust.
The firms are now arguing that they should have received an 18 percent cut of the $7 million settlement — or about $1.28 million — as compensation for legal services, in accordance with a contract with the Wisner Donation. They claim that the Donation refused to honor the contract and argued that the fee should be calculated at 12 percent, or about $850,000.
The 2020 Wisner agreement
As part of the suit, the firms also want to invalidate Cantrell’s March 2020 “Ratification, Extension, Modification and Amendment,” which extended the trust, along with shared control of the Wisner land with the other beneficiaries: Tulane University, the Salvation Army, LSU Health Services and the Wisner heirs.
The connection between the 2020 agreement and the attorney’s fee dispute from the Deepwater Horizon settlement in this new litigation is not immediately apparent, though the petition claims that the agreement “materially altered the decisional and ownership structure of the Donation,” and therefore, “resolution of who has authority to bind Wisner to these terms is necessary” to execute the declaratory judgment sought by the law firms.
The plaintiffs did not respond to requests for comment.
In November, The Lens reported that Cantrell’s agreement appeared to have a number of legal problems, and additionally, was not run through the proper channels on Cantrell’s end.
The agreement purported to allow the Wisner Donation to continue in its current structure, in perpetuity, despite the fact that the original trust document established that it would terminate after 100 years in 2014 and leave all property held by the trust to the city. A legal expert told The Lens last October that the Wisner Donation trust “definitely terminated,” in 2014. and yet, it is still continuing today as if it is still operational, thanks to the agreement.
Additionally, Cantrell signed off without consulting the City Council. According to the City Charter, the mayor is required to get the “approval of the Council and when necessary, a court of proper jurisdiction” before modifying a trust that benefits the city.
The current structure allows the four groups of beneficiaries other than the city to receive over 60% of the income generated, which amounts to millions each year. The heirs — including Wisner’s descendants and the descendants of a group of attorneys who worked for his widow, Mary Wisner, in a lawsuit against the trust in the 1920s and 1930s — receive the largest chunk of all the beneficiaries.
If the trust had been allowed to terminate as scheduled, rather than extended by Mayor Cantrell and the beneficiaries, it’s possible the city would have become the sole recipient of 100 percent of the income it generates. In recent years, that has been between $3 million and $9 million annually.