Paul Newman’s Daughters Sue Late Actor’s Charitable Foundation

Two of the daughters claim Newman's Own Foundation has "lost its way," taking issue with the nonprofit for halving the amount of money directed to them for their own charitable giving.

A lawsuit exposing a rift between two of Paul Newman’s daughters and the late actor’s charitable foundation alleges its leaders are betraying Newman’s directives for his family to be intimately involved in the organization.

They allege the Newman’s Own Foundation improperly cut the mandated contributions to entities controlled by the daughters, Susan Kendall Newman and Nell Newman, from $400,000 to $200,000 annually, according to the suit filed Tuesday in Connecticut state court. They claim it’s the first step toward completely ousting their family from the foundation funded by profits from their father’s publicity rights.

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“Newman’s Own Foundation lost its way and strayed from its mission to preserve and honor Paul Newman’s legacy,” states the complaint. “The years since Mr. Newman’s death consist of a long and consistent pattern of disregard, by those in control, of Mr. Newman’s specific intentions and direction, coupled with mismanagement, scandal, and questionable practices.”

The Academy Award-winning actor and director created Newman’s Own Foundation in 2005. The nonprofit controls and is funded by food and beverage company Newman’s Own, which uses the actor’s name and likeness to sell salad dressing, pasta sauce and other products. The foundation reported $24.6 million in revenue in 2020, according to tax filings.

Under the agreement, the daughters claimed their father conditioned the arrangement on their involvement in the foundation. They seek $1.6 million in damages to be donated to charities of their choice and an order forcing the foundation to follow Newman’s wishes.

The foundation said in a statement that the board’s philanthropic decisions vary each year and that it needs to make the best use of its finite resources. “Best practices surrounding philanthropic organizations do not allow for the establishment of perpetual funding allotments for anyone, including Nell and Susan Newman,” the statement continued. “A meritless lawsuit based on this faulty wish would only divert money away from those who benefit from Paul Newman’s generosity. While we expect to continue to solicit Newman family recommendations for worthy organizations, our funding decisions are made each year and will continue to reflect the clear aim of Paul Newman and our responsibility to the best practices governing private foundations.”

The daughters aren’t members of the foundation’s board.

When creating the foundation, Newman laid out specific plans on its structure in a living trust. A 2005 document he shared with his advisers and daughters detailed that Newman’s Own would pay royalties to its parent company for the use of his name and image rights, according to the complaint. The foundation would, in turn, distribute funds to the daughters’ foundations for them to donate to charities of their choosing.

But the lawsuit claimed Robert Forrester, Newman’s former adviser who ultimately became CEO of Newman’s Own and president of the foundation, and Brian Murphy, Newman’s longtime business manager, manipulated the actor when his mental capacity was declining into appointing them to the board in his will.

“It  had  been  clear  for  some  time that Mr. Newman was unable to act as trustee of the Living Trust,” states the complaint, which is embedded below. “Rather than advise Mr. Newman’s daughters of their right to, and their father’s unequivocal  direction  that  they  should,  appoint a co-trustee to act with Forrester and Murphy, Forrester and Murphy instead unilaterally seized control of Mr. Newman’s affairs, as to NOF and as to his estate planning decisions.”

Newman’s family was “shocked” when his will was read to them because it strayed so far from what they had been told leading up to the actor’s death, according to the suit. They were threatened with disinheritance if they contested it.

While it points to Newman’s living trust, the complaint doesn’t cite the foundation’s governing documents, which would detail whether the foundation is mandated to distribute $400,000 to the daughters annually.

Paul Roy, an estate planning attorney at Withers who isn’t involved in the matter, tells THR that Newman’s wishes in the living trust over how the foundation operates aren’t binding. “It sounds to me like the trustees were directed by Paul to consult with the family members in making decisions on distributions, but that’s not necessarily a legal right to decide where the distributions go,” he noted. “That makes sense because they’re not directors.”

The board removed Forrester from his position as CEO in 2019 amid allegations of misconduct, including harassment and creating an unhealthy work environment. The daughters’ suit also claims the foundation was improperly paying for him and his wife to fly first class and stay in pricey hotels.