Michael Paulson fired back March 30 at a Superior Court judge’s decision that Paulson should be removed as trustee of his father’s living trust, calling the ruling “totally without merit. It is disturbing that a sitting judge would go to such lengths to disparage my name and reputation in a ruling without any due consideration of all the facts of my trusteeship presented in his courtroom,” Paulson wrote in a statement to The Blood-Horse. “I fully intend to appeal this unjust ruling.”
Superior Court judge Robert P. Dahlquist ruled March 24 that Paulson, the son of the late Thoroughbred owner/breeder Allen Paulson, “put his own personal interests ahead of the interests of the trust beneficiaries and misused trust assets for his own personal benefit.”
In response, Paulson said the estate he was charged with managing had more than “80 debts, contingent lawsuits, and creditors’ claims that exceeded its stated assets by nearly $90 million, including a creditor’s claim filed by (my father’s) third wife, Madeleine, for more than $6.2 million.
“Since my father’s passing (in 2000), I have personally and successfully managed (the estate’s) numerous business entities, settled and managed more than 25 lawsuits, sold more than $60 million in real estate and property, $37 million in aircraft, $42 million in horses, $36 million in ‘private’ stock sales...and closed a $30-million licensing contract...getting the trust’s balance sheet out of the red and showing substantial equity.”
Allen Paulson ran one of the most successful breeding and racing operations in Thoroughbred history, racing standouts such as Cigar, Theatrical, Estrapade, Blushing John, and Arazi. He was survived by his sons Michael, Richard, and James. Richard Paulson died in 2007. Dahlquist appointed James Paulson and Vikki Paulson (widow of Richard) to succeed Michael as co-trustees.
Dahlquist’s 20-page decision accused Michael Paulson of paying himself “compensation which is excessive under the circumstances.” Paulson responded that “In fact, I have worked for the last 18 months with ‘no’ pay and have loaned the trust more than $3 million of my own personal funds to help keep its liquidity.”
The judge also claimed Paulson failed to sell the trust’s racehorses although the trust stated the horses were to be sold promptly upon his father’s death. However, said Paulson, the settlement of a lawsuit between him and Madeleine Paulson vacated the earlier ruling to sell all the horses and stipulated that the trust would be able to maintain its Thoroughbred operation. Under Michael Paulson’s stewardship, the Allen Paulson Living Trust raced Azeri to championship seasons in 2003 and 2004.
“My attorneys and I wholeheartedly disagree with all of the judge’s assertions and statements about me, and will take his ruling to an appellate court in hopes to seek a fair hearing and hopefuly overturn this ridiculous and harmful ruling to my father’s legacy, my reputation, and his trust,” Paulson stated.