The Irvine Co. wrapped up its case against Joan Irvine Smith in a Detroit court Wednesday, and lawyers for Smith immediately began to present her side of the half-billion-dollar dispute.
Smith and her mother, Athalie Clark, contend that their shares in the company were worth $330 million in 1983, far more than the $110 million Chairman Donald L. Bren offered when he bought a controlling interest in the company.
Smith and Clark say their 11% share of the company is now worth $500 million with interest. Meanwhile, Bren has lowered his offer to $88 million.
By a quirk of Michigan corporate law, the Irvine Co. was required to sue Smith to settle the dispute over what the company is worth, so the company presented its arguments first. The high-stakes trial began in August and is expected to continue through the spring in a state court in Michigan, where the real estate development company is incorporated.
Clark to Testify
The elderly Clark, however, is said to be ailing. She will testify in Los Angeles when the defense calls her a week from Monday, an Irvine Co. spokesman said.
The Irvine Co. owns some of the biggest office and industrial parks in Orange County, including Newport Center and the Irvine Spectrum, as well as huge tracts of land. The company is the county's largest private landholder with 68,000 acres, or one-sixth of the county.
Smith is the great-granddaughter of James Irvine, who originally acquired what is now the company's enormous Orange County landholdings in the 19th Century.
Smith has long been at odds with the management of the company, and the trial is the latest chapter in the decades-old struggle over the direction of the company.
The key issue in the lengthy trial is how much the company was worth when Bren bought a majority of its stock from 34 other shareholders almost five years ago. Much of the testimony has been highly technical as the two sides argue over how to valuate the company's buildings and vast landholdings.
Bren valued the company at $1 billion in 1983 to set a price for other shareholders' stock.
Smith's lawyers have portrayed Bren as scheming to buy out Smith and other shareholders for less than their shares were worth and say the Irvine Co. was worth as much as $3 billion at the time.
Irvine Co.'s Case
Bren's lawyers counter by saying that the other shareholders--who the lawyers say are all astute and prominent business executives--were satisfied that Bren paid them a fair price and that Smith is only using the lawsuit to continue her longstanding feud with company management.
Bren had shared the chairmanship with another stockholder for a few months but became the sole chairman after acquiring control of the company. He testified for 10 days in November.
Smith's lawyers opened their case Wednesday by calling Irvine Co. Vice Chairman John Galvin to testify. They indicated that this week they will also call Bren's assistant, Senior Vice President Gary Hunt, before taking a break for a week, a lawyer for the company said.