The youngest member of the Stronach clan has added another strand to a web of lawsuits over control of the family fortune, as 18-year-old Selena Stronach went to court last week with a suit aimed at maintaining a jet-set lifestyle and limiting the role of her aunt Belinda Stronach, who is currently running the family’s billion-dollar horse-racing, real-estate and farming business.
Selena Stronach is one of the three grandchildren of Magna International Inc. founder Frank Stronach. She is staking her territory in a continuing family feud at the same time her father, Andrew, Frank’s only son, and mother, Kathleen, are divorcing. Selena Stronach’s lawsuit against her aunt was filed in early February, four weeks after her mother filed a claim for support from her husband’s family.
Kathleen Stronach’s claim focused on maintaining a lifestyle that includes a 15,000 square-foot home in Aurora, Ont., with five staff, including a chef, two luxury cars, and vacation homes in Palm Beach, Fla., and Muskoka. She and her daughter receive $15,000 a month in direct transfers from the family’s private holding company, The Stronach Group, plus unrestricted use of credit cards, and private jet flights for monthly vacations at five- and six-star hotels. In the divorce claim, Kathleen Stronach said her daughter owns a ranch with one full-time employee, where she raises cattle that are shown in country fairs, and “the operation is expensive to run.”
In a separate filing, Selena Stronach asked the Ontario Superior Court of Justice to ensure that Belinda Stronach “pay or reimburse Selena for personal expenses that have historically been paid or reimbursed on her behalf through the trusts and/or The Stronach Group.” The filing also asked that Selena Stronach be given full access to the family’s financial affairs and be allowed to name an independent trustee to monitor the family business on her behalf.
In an e-mail on Wednesday, Belinda Stronach said: “These legal actions were anticipated because my brother and his wife are not yet legally separated, and my niece has just turned 18. Their individual family arrangements are up to them."
She said: "We have provided my father and my brother with detailed financial information over many years, which is well documented. We continue to manage our business and trusts with transparent financial principles and good governance and defend against untrue allegations.”
For Selena Stronach, the potential divorce of her parents has significant financial implications. Andrew and Kathleen Stronach married in 1997 and separated in 2009, according to court documents. That year, the couple initially retained lawyers, but in her January divorce filing, Kathleen Stronach said “the legal separation process was halted by an intervention by Frank.” According to Kathleen Stronach’s court filing, her father-in-law said: “If she litigated, things would not go as she wanted, however, if she did not do that, and instead let go of her lawyer, he would make sure that all of her and Selena’s needs would always be taken care of. ...
“It was not until she recently retained counsel that Kathleen understood that there was a limitation period” to claims for support, according to the court filing. Her lawyers said: “Kathleen is asking this court to extend the limitation period so that she may pursue her claims, now that she understands her rights.”
Gordon Capern, Andrew Stronach’s lawyer, said on Wednesday: “Kathleen and Andrew have an amicable relationship and given the current circumstances, Andrew anticipated that Kathleen would seek to ensure she continued to receive support. Andrew is optimistic that this situation will be successfully resolved for all concerned.”
Selena Stronach’s suit against her aunt is the latest in a series of court cases that started in October, when Frank Stronach and his wife, Elfriede, asked the court to remove their daughter as chair and president of The Stronach Group and the trust funds and put the 86-year-old entrepreneur back in charge. The couple also demanded their daughter and former Stronach Group chief executive Alon Ossip pay $520-million in damages. As part of that legal action, the pair sued Belinda Stronach’s children to gain control of their trusts.
Frank Stronach cut ties with Magna in 2011, selling stock worth approximately $1.6-billion. He gave up all formal responsibilities at the family businesses in 2013, when he made a brief foray into politics in his native Austria. In the opening salvo of what has become an increasingly bitter family feud, Frank Stronach said that after he left, his 52-year-old daughter and Mr. Ossip “seriously neglected the business of The Stronach Group and abused their positions of authority."
Andrew Stronach, aged 50, subsequently joined forces with his parents, accusing Belinda Stronach and her perceived allies of “serious misconduct” in a court filing that also asked for Frank Stronach to be installed as head of the family business. None of the claims have been heard in court.
“Selena and Andrew Stronach are aligned in their interests and common concerns,” Mr. Capern said.
Belinda Stronach has consistently stated that she is running the family businesses in a manner that will preserve wealth for future generations, while her father is risking the family fortune by investing in ventures such as a grass-fed cattle ranch, electric bicycles, a pumpkin seed oil business and a Florida golf course. In a statement of defence filed last month, Ms. Stronach said: “Frank’s improvident spending and unsound business decisions have reduced the family net worth by a staggering US$580-million (or ~C$800-million).”
The Stronach family owns six U.S. race tracks, along with media and gambling businesses linked to thoroughbred racing. The media and gambling businesses have almost doubled sales over the past five years, with revenues of US$1.1-billion in 2017. The family company also has extensive real estate holdings.