Billionaires’ Legacy: Chace Family Battles Over Control of Hundreds of Millions in Trust
Thursday, April 07, 2022
Malcolm "Kim" Chace was one of the richest men in America and at the time of his death, he was the richest in Rhode Island.
He was a regular on Forbes magazine’s list of billionaires. In 2001, Chace was tied for 490th on the ranking with a net worth of $1 billion -- in 2022 dollars that is estimated to be worth $1.7 billion
Chace's family made hundreds of millions from his ownership interest in Warren Buffett’s Berkshire Hathaway.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe book "All the Money in the World" cites how Kim Chace acquired much of his wealth.
"Chace Family: Founders of the Berkshire textile mill in Providence, Rhode Island. Their descendants sold to Buffett in the 1960s, but Malcolm G. Chace, the chairman, held onto his shares — making his children very wealthy. His heir, Malcolm “Kim” Chace III, and his family ranked 209 on the Forbes 400 in 2002 with $1 billion in assets,” according to the book.
But, the Berkshire Hathaway legacy was not his only financial success. Chace founded BankRI.
As a philanthropist, Rhode Island is littered with buildings named in his honor -- as an example, he funded the Chace Center at Rhode Island School of Design.
In 2011, Chace died and left a massive fortune to his children, grandchildren, and his wife. His nephew Arnold “Buff” Chace was designated to manage much of the money via a family trust.
Now, family members are warring over the management of the fortune. And, ugly allegations are being levied.
Battle Lines Are Drawn - A Family Divided
On one side are Kim Chace’s children, their spouses, and grandchildren. Leading the effort is his son Malcolm Chace, who heads the investment firm Canton Hathaway in Providence. His business partners include Jim Procaccianti, President and CEO of Procaccianti Companies — “a firm that claims more than $10 Billion of diversified real estate investments in more than 130 cities across 31 states coast to coast.”
The Malcolm Chace faction has sued cousin Arnold “Buff” Chace and William Saltonstall [Kim Chace’s step-son and Malcolm Chace’s step-brother] individually as well the trust managing the money — M2K Trust.
The plaintiffs in the mega suit -- Malcolm Chace group -- allege that Buff Chace and Saltonstall violated the tenet of the trust by investing funds into Buff Chace’s real estate projects — they claim that this was specifically barred by the terms of the trust.
Now, a massive suit is pending in Providence Superior Court. Hundreds of pages have been filed and the case is expected to take years to resolve according to court documents.
The suit by the Malcolm Chace group alleges the following by Buff Chace and Saltonstall:
Count I: Breach(es) of Duty of Loyalty - Conflicted Transactions.
Count II: Breach of Trust — Failure to Account/Furnish Information
Count III: Breach of Duty of Impartiality with Beneficiaries
Count IV: Breach of Duty of Invest Prudently
Count V: Removal of Trustees — Ongoing and Willful Nature od Breach (es) of Duty by [Buff Chace and Saltonstall]
Buff Chace Denies Claims and Fires Back
Buff Chace is a prominent Providence developer who has redeveloped much of Westminster and Washington Streets in Providence. He is the owner of Cornish Associates.
In a response to Count I, Buff Chace does “admit that Trust made an investment in [Buff Chace’s development] Downcity Phase II, LLC.,” but denies other aspects of that claim.
Buff Chace denied the claims in Malcolm Chace’s group’s suit and fired back over the issue of who should be the trustees of the trust and who should realize the fees.
“Admit that several beneficiaries sought the voluntary resignation of the Trustees and affirmatively slate that there was no articulation basis for resignation except that Malcolm Chace IV expressed that it was his desire to manage all the assets of the Trust to facilitate the payment of fees to him and his investment firm, which would have created an inherent conflict of interest,” alleges Buff Chace in his response to the claims.
Liz Chace, Kim Chace's second wife and a successful woman on her own -- she founded Residential Properties -- has entered the fight.
She has entered the litigation on Buff Chace's side and claims that the legal efforts by her estranged stepson Malcolm Chace is about controlling the trust and earning fees
Long Legal Road Ahead
According to an approved court calendar for this case, this litigation is scheduled to go deep into 2023.
Neither Buff Chace nor Malcolm Chace returned calls requesting comment.
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