Revoke (pronounced ri-vohk)
(1) To
take back or withdraw; annul, cancel, rescind or reverse; rescind or repeal.
(2) To
bring or summon back.
(3) In
certain card games, to fail to follow suit when possible and required (renege
the more common term).
(4) Such
an act or instance of revoking.
1300–1350:
From the Middle English revoken, from
the Latin revocāre (to call again; to
call back; withdraw), the construct being re-
(in the sense of “again”) + vocāre (to
call). The synonyms (depending on
context) are countermand, nullify, recall and retract. Revoke is a noun & verb, revoker is a
noun, revoked & revoking are verbs and revokingly is an adverb; the noun
plural is revokers.
Irrevocable (pronounced ih-rev-uh-kuh-buhl
(U) or ih-ri-vohk-kuh-buhl (non-U))
Not to
be revoked or recalled; unable to be changed, repealed or annulled;
unalterable.
1350–1400:
From the Middle English, from the Middle French irrévocable from the Latin irrevocābilis
(that which cannot be recalled, unalterable), the construct being ir- (the prefix an assimilated form of in- (not, opposite of)) + revocabilis (able to be revoked). Irrevocable is an adjective, irrevocableness
& irrevocability are nouns, and irrevocably is an adverb; the noun plural
is irrevocabilities.
The
trust, Rupert Murdoch and irrevocably
The
trust in its modern form is an invention of English common law. Although the trustee concept was a part of
Roman civil law, its operation essentially was restricted to the a class of
ownership of assets held by someone who would now be known as the executor or
administrator of the estate of a deceased; the administrator would be the legal
owner (though not necessarily the possessor) of the goods but their rights to
them was limited to distributing them (or if sold or dissolved, their value) to
the beneficiaries named in the deceased testamentary documents (will). The novel innovation of the English common
law was to apply a similar concept to the property of someone living. During the Crusades (the expeditions by
Christian military formations between 1095-1291 attempting to retake the Holy
Land (Jerusalem and its environs)), it was the practice for a land-owning
Crusader to convey (ie transfer ownership) his property to another so the
estate could continue to operate as part of the feudal land system, this done
on the basis that upon his return to England, the property would revert to
him. Most such arrangements were honored
but some were not and because English law regarded land title as absolute,
whomever was the legal “owner” of the land could defend that right against any
claim. A subject’s only recourse was to seek justice by petitioning the king and in most cases the matter would be
referred to the chancellor (an office something like a mix of prime-minister
& minister of justice) who would decide each case on its merits. That of course resulted in inconsistencies
and led to the development of the Court of Chancery and the emergence of the principles
of the law of “equity”, designed both to remove inconsistencies and avoid the
injustices sometimes the result of the strict application of the rigid rules of
the common law.
Thus
the emergence of the trust in which property could be transferred from one to another
but with rights of the legal “owner” of the property in the trust restricted by
the terms of the trust (typically that the property or its proceeds could be
used or applied only to those beneficiaries named); the “legal owner” was thus
really the trustee (the administrator).
It was a mechanism which proved useful over the centuries including
during the wars of religion when trusts could be created to protect property
from confiscation. The trust is a
flexible beast and a variety exist including the “secret trust” (although in
most places they’re not as secret as once they were) and although most trusts
formally are created an so-named, if an arrangement is found in substance and
operation to be “a trust in all nut name”, a court can declare it to be a trust
(technically a “constructive trust”). Trusts
are widely used today, mostly tax-minimization platforms because, as a general
principle, income gained by a trust is not taxable until paid out to a beneficiary. That has made trusts of great interest to
those advocating tax-reform but because among the most enthusiastic users of
trusts are the rich and politicians (society’s most dynamic and influential
symbiosis whether in New York, Moscow, Beijing, Islamabad or Pyongyang), not much is likely to change.
A particular flavor of trust is the “irrevocable trust” which, as the
name suggests, should be one in which the terms cannot be altered.
In 1999 Rupert Murdoch (b 1931), at the time of his second
divorce, created the Murdoch Family Trust (MFT), into which was transferred the
shareholdings of a number of companies and the terms of the trust were such
that the succession plans for his media empire were settled. The trust grants the family eight votes, Mr
Murdoch controlling four, each of his eldest four children holding one;
upon Mr Murdoch’s death, his four would have been distributed equally to them. The device was created as an “irrevocable
trust” as part of the terms of the divorce, the ex-wife waiving the right to a
much higher payout in return for the “irrevocable” protection the terms of the
trust afforded the four children. In December
2023, Mr Murdoch filed papers in Reno, Nevada seeing to amend (ie in the
technical sense “partially revoke”) the terms of the “irrevocable” MFT to the
extent that his oldest son would assume full control over News Corp, the
holding company which manages literally hundreds of assets (the best-known of
which is now Fox News), excluding the other three siblings. This was about operational control and did
not affect the children’s financial stake in the trust. The matter (In the Matter of the Doe 1 Trust) was in September 2024 heard
before a probate commissioner, in camera, at Washoe County Courthouse, the
parties (1) Rupert Murdoch and the eldest son on one side and (2) the three
other siblings on the other.
Mr
Murdoch had not previously been much associated with the state of Nevada but
his legal team chose to file in Nevada because the state has the nation’s most
flexible (they like to use the term “progressive”) statutes relating to trust
law and it was thus concluded it was there that the highest chance existed for
amending an “irrevocable” trust. The
Nevada approach in these matters in interesting in that the state permits “decanting”,
a process by which a trustee can transfer assets from one trust into a new
trust with different terms, in effect modifying the original trust in that the
assets become subject to different rules.
Decant (inter alia “to pour from one vessel into another”) was from the
French From French décanter, from the
Medieval Latin dēcanthāre, the
construct being dē- (of; from) + canthus
(beak of a cup or jug). For
administrative simplicity, decanting does not require the approval of a court
but can be subject to challenge if it’s alleged a trustee lacks the requisite discretionary
authority under the terms of the original trust document.
Under Nevada law,
despite the name, an “irrevocable trust” is not “irrevocable” in an absolute
sense because beneficiaries and trustees can agree to modify the terms of such
a trust, even if the trust is irrevocable. This process (a “non-judicial settlement
agreement”) avoids the need for a court hearing, thereby reducing the expense
and time required and exemplifies the sort of “flexibility” Nevada’s corporate
regulators cite as reasons why the state should be a trustee’s jurisdiction of
choice. However, Nevada does require any
modifications be consistent with the trust's purpose and not in violation with its
fundamental terms and moreover the usual principles of equity governing trusts
apply: there can be no unconscionable conduct.
A Nevada court also can modify or terminate an irrevocable trust if the
trust's purpose has become impossible, impracticable, or illegal, or if
circumstances not anticipated by the original grantor arise. In that the remit of equity is wider than in
contract law where courts have always been reluctant to “write contracts”
although they will correct technical errors and a Nevada court can appoint a “trust
protector”, an officer with the authority to amend trust terms, change beneficiaries,
or even (under specified conditions) terminate the trust. This authority can extend to the creation of
a “directed trust” (a special class of constructed trust) which allow the
grantor or beneficiaries to appoint an entity or individual to oversee specific
trust decisions, which can include modifications (all of which are subject to
the supervision and ultimately the approval of the court).
The
decision of the probate commission in Reno will not have pleased Mr
Murdoch. In a 96 page opinion published
on 9 December, the commissioner found Rupert and Lachlan Murdoch (b 1971; the
eldest son) had acted in “bad faith” in their attempts to change the
terms of the irrevocable MFT, suggesting the pair had organized a “carefully crafted
charade” to “permanently cement Lachlan Murdoch’s executive roles”
inside the empire “regardless of the impacts such control would have over the companies
or the beneficiaries” of the MFT.
He didn’t go as far as one New Zealand judge who once damned evidence brought before him as “an orchestrated litany of lies” but the tone
was still severe.
One untypical
aspect of the matter is that it wasn’t directly about money; most trust cases
involve money, indeed, a financial motivation is at the root of most civil
matters. Mr Murdoch was moved to seek to
change the terms of the MFT because he’d concluded Lachlan was the only one of
the four children who shared his views on how the editorial position of affected
media outlets (most notably Fox News) should be maintained, the other three
tending to a more liberal (in US terms) stance.
Interestingly, although that may appear a family’s ideological squabble,
the documents which emerged from the discovery process in the matter of Dominion Voting Systems v Fox News
(Delaware Superior Court: N21C-03-257; N21C-11-082) which culminated (thus far)
in Fox settling the matter by paying Dominion some US$790 million, the
alternative being to continue the case and allow more of Fox’s internal
documents to enter the public domain) suggested that Mr Murdoch’s decisions
about such things are led more by a commercial imperative than any political commitment. In other words, Fox News should do what it
does because it attracted viewers (the product) to deliver to advertisers
(the customers); were the Fox News audience suddenly to have a moment of mass-catharsis
and become a bunch of seed-eating, basket-weaving hippie vegans, so would shift the Fox News editorial stance.
The usual purpose of an irrevocable trust is to protect the beneficiary (or beneficiaries) from others but they have been recommended for those who might be advantaged by being “protected from themselves”.
So what
Mr Murdoch wishes to ensure is that Fox News keeps on doing what it does (and
whether one agrees with it or not, few would deny at what it does it’s the best
in the world) because that is the path to the highest financial benefits for
the MFT. Lachlan understands and the
others don’t so Mr Murdoch is trying to protect the three dissident children
from themselves. Whether defiant or
deluded, the dissident triumvirate were pleased with the recommendation: “We welcome the commissioner’s
decision and hope that we can move beyond this litigation to focus on
strengthening and rebuilding relationships among all family members.” It’s there’s a Murdoch family Christmas
dinner, there might be what a diplomatic communiqué would describe as a “frank and robust exchange of views”.
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