The lawsuit filed by the widow and heirs of former Buffalo Sabres owner Seymour H. Knox III against HSBC Bank USA N.A. resulted in a major probate court ruling in the state of New York. According to the Buffalo News, Surrogate Judge Barbara Howe found that the bank was "negligent and imprudent" in handling the family's trusts since the mid-1990s.
WIVB.com reported the Knox family had accused HSBC and Marine Midland Bank, its predecessor, for mishandling seven trusts, resulting in millions of dollars lost in potential investments and income. The Knox family had a major role in the history of the bank. Seymour H. Knox Sr. served as Marine Midland's chairman between 1913 and 1915, and Seymour H. Knox Jr. held the same position in 1942 to 1970.
Problems arose when HSBC took over the Knox trusts from the Buffalo banks that initially managed the accounts. When NY estate planning lawyer Daniel C. Oliverio was assigned as the guardian at litem for the Knox children in 2006, he noticed problems in the trusts that resulted from poor decision-making and carelessness by HSBC and filed objections.
Judge Howe ruled that the bank was responsible for all damages and ordered HSBC to pay at least $25.6 million to seven Seymour Knox family trusts. The judge said HSBC violated "the Prudent Investor Act and its own internal policies" and neglected to perform all its fiduciary duties. The court will also evaluate HSBC's subsidiary costs to the Knox families, which may include the family's accumulated attorney fees and court costs.
If you are concerned about how your trust accounts are being handled or have additional questions about creating trusts, seek legal counsel from an NY estate planning lawyer. For general information, browse through the Related Resources links.