Forbes v. Forbes
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The Supreme Court affirmed in part and reversed in part the judgment of the district court in this complaint against the Trustees of the Beckton Ranch Trust (BRT) seeking declaratory judgment, damages for breach of fiduciary duty, and an accounting, holding that the district court erred in part.
In 2018, Waldo Forbes gifted his shares in the BRT to two of his stepsons. The Trustees exercised an option within the trust instrument to reacquire the gifted shares at "fair value." After the beneficiaries purchased their shares Forbes brought this complaint. The district court found that Forbes did not have standing to seek declaratory relief and that the Trustees did not breach their duty of loyalty and had rendered an inadequate accounting. Thereafter, the Trustees filed a new accounting, which the district court found to be sufficient. The Supreme Court reversed in part, holding (1) Forbes lacked standing to seek declaratory judgment; (2) with one exception, the Trustees did not breach their duty of loyalty by using a sealed bidding process to appraise the "fair value" of the shares; (3) one Trustee breached her duty of loyalty through impermissible self-dealing; and (4) the annual accounting contained clear, complete, and accurate information as required under common law.
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