The Family Office & Crisis Management
In moments of crisis — inevitable for any business — a trusted family CFO and objective voice is an irreplaceable difference maker. Here’s why the best way to manage a crisis is to not be surprised by it.
I’m not someone who has a great deal of down-time for video or television viewing, however recently, a colleague recommended I watch a 2016 episode of a show called American Greed. The episode explored the tragedy that was the James E. Scripps family wealth.
The episode details how an heir to a Scripps newspaper fortune was ultimately sentenced to nine years in federal prison after being found guilty of embezzling $3.6 million from his mother and mentally disabled uncle to pay for a lavish lifestyle.
Michael Scripps, whose family once owned newspapers such as the Detroit News, was convicted of seven counts of wire fraud; using interstate wire communications for the purposes of fraud.
The patriarch of the Scripps family in Michigan was James E. Scripps, who owned the Detroit News. He was the half-brother of Edward Willis Scripps, the founder of what became the Scripps-Howard newspaper group. The two newspaper companies were separately owned. Michael’s trust fund was from the fortune of James E. Scripps, his great-great grandfather, not E.W. Scripps. The James E. Scripps holdings were sold in the 1980s for more than $700 million.
The tragedy that pre-dated the embezzlement of funds by Michael Scripps however, was the mismanagement of the more than $100 million dollars left in the hands of Michael Scripps’ mother, Melissa Scripps after the sale in the ‘80s.
During Michael’s trial, Melissa testified that she had inherited $11 million, and also took over her elder brother David's share (said to be more than hers), because he was mildly autistic. But during his trial, Michael Scripp’s defense attorney argued that her fortune was closer to $100 million. Whether $11 million or $100, it rapidly evaporated.
As a weak justification for his actions, Michael Scripps is said to have thought that his mother was spending too much money and that she was spending his inheritance.
U.S. District Judge Legrome D. Davis reminded jurors that they had to decide if a crime occurred, not if people had "squandered, in a profound way, their lives."
To sum it up, a CNBC article described it as:
“…when the money began to run out, it triggered a family feud … [one] that saw mother and son turn on each other, landed one family member in prison, and left a name once associated with entrepreneurship and philanthropy forever tarnished by scandal.”