Editor's note: The Karoly case reminds this Shark of the Estate of Alice R. Gore in the Probate Court of Cook County. Alice's million dollar estate ending up in the pockets of the "Judicial-Nursing Home Complex" rather than the intended heirs. Lucius Verenus, Schoolmaster, ProbateSharks.com
In Karoly will dispute, millions in administrative expenses
Attorneys rack up nearly $4 million in administrative bills, leaving about $3 million.
In the end, lawyers could end up with most of the money in the bitterly contested estates of Allentown medical malpractice attorney Peter Karoly and his wife, Dr. Lauren Angstadt.
During six years of legal limbo, the estates have racked up $3.74 million in administrative and other costs, leaving roughly $3 million remaining in the late couple's legacy, according to Philip Lauer, an attorney for two of the beneficiaries.
During six years of legal limbo, the estates have racked up $3.74 million in administrative and other costs, leaving roughly $3 million remaining in the late couple's legacy, according to Philip Lauer, an attorney for two of the beneficiaries.
And those expenses don't even count the legal bills that the beneficiaries incurred to hire Lauer and others for a bruising civil court fight over Karoly's and Angstadt's wills.
"Does it seem like a lot of money? Yes," Lauer acknowledged Monday. The estates, he said, "have been reduced in value at a pretty phenomenal rate on an annual basis."
An attorney on the losing side of the disputed wills put it more bluntly.
"Oh my God, I'm just blown away," Richard Angino said. "In a case where individuals have the responsibility of liquidating the assets of the estate, the purpose isn't to liquidate those assets into your pocket."
When Karoly and Angstadt were killed in 2007 in a private plane crash in Massachusetts, they left behind a tangled financial web that included a law practice, a dental practice, real estate holdings and several medical businesses in South Carolina. Amid a contentious battle among relatives over their wealth, the court appointed retired Lehigh County Judge Thomas Wallitsch to administer Karoly's estate, and attorney Harry Newman to administer Angstadt's.
Neither Wallitsch nor Newman returned phone calls Monday seeking comment about the costs. Lauer said the estimates represented a "lengthy, preliminary accounting" of a "complicated asset." He said he does not know whether his clients will contest the expenses.
"It very well may be that that will occur, but it is too early to say at this point," Lauer said.
Angino predicted the fees will be challenged, whichever side comes out on top after appeals over the disputed wills are exhausted.
"These are just bizarre figures," Angino said.
The estates have been fought over since Karoly's sisters accused their brother — now disgraced Lehigh Valley attorney John Karoly Jr. — of forging the 2006 wills that he submitted after the couple's deaths. Forgery was also the conclusion reached by a federal grand jury that indicted him, his older son J.P. Karoly, and Dr. John Shane, who witnessed the documents.
But after a lengthy civil trial in 2011, retired Bucks County President Judge Isaac Garb disagreed, finding the 2006 wills were genuine, a recommendation upheld in April by Northampton County President Judge F.P. Kimberly McFadden.
John Karoly Jr. no longer has an interest in the estates, having renounced it as part of a plea bargain in a larger criminal probe in which federal prosecutors agreed to withdraw all charges relating to the wills. He is serving 61/2 years in a federal prison in Massachusetts for failing to pay taxes on more than $5 million of income and other financial crimes.
"Does it seem like a lot of money? Yes," Lauer acknowledged Monday. The estates, he said, "have been reduced in value at a pretty phenomenal rate on an annual basis."
An attorney on the losing side of the disputed wills put it more bluntly.
"Oh my God, I'm just blown away," Richard Angino said. "In a case where individuals have the responsibility of liquidating the assets of the estate, the purpose isn't to liquidate those assets into your pocket."
When Karoly and Angstadt were killed in 2007 in a private plane crash in Massachusetts, they left behind a tangled financial web that included a law practice, a dental practice, real estate holdings and several medical businesses in South Carolina. Amid a contentious battle among relatives over their wealth, the court appointed retired Lehigh County Judge Thomas Wallitsch to administer Karoly's estate, and attorney Harry Newman to administer Angstadt's.
Neither Wallitsch nor Newman returned phone calls Monday seeking comment about the costs. Lauer said the estimates represented a "lengthy, preliminary accounting" of a "complicated asset." He said he does not know whether his clients will contest the expenses.
"It very well may be that that will occur, but it is too early to say at this point," Lauer said.
Angino predicted the fees will be challenged, whichever side comes out on top after appeals over the disputed wills are exhausted.
"These are just bizarre figures," Angino said.
The estates have been fought over since Karoly's sisters accused their brother — now disgraced Lehigh Valley attorney John Karoly Jr. — of forging the 2006 wills that he submitted after the couple's deaths. Forgery was also the conclusion reached by a federal grand jury that indicted him, his older son J.P. Karoly, and Dr. John Shane, who witnessed the documents.
But after a lengthy civil trial in 2011, retired Bucks County President Judge Isaac Garb disagreed, finding the 2006 wills were genuine, a recommendation upheld in April by Northampton County President Judge F.P. Kimberly McFadden.
John Karoly Jr. no longer has an interest in the estates, having renounced it as part of a plea bargain in a larger criminal probe in which federal prosecutors agreed to withdraw all charges relating to the wills. He is serving 61/2 years in a federal prison in Massachusetts for failing to pay taxes on more than $5 million of income and other financial crimes.
J.P. Karoly and his brother, Joshua, remain among the beneficiaries of the 2006 wills, along with their cousins Gregory and Jason Azar, and their uncle, Joseph Karoly, as the guardian of a minor.
The beneficiaries' attorneys, Lauer and Robert Goldman, disclosed the mounting administrative expenses in a legal filing this month in which they sought to force the other side to post a $500,000 bond during appeals.
Two of the Karoly sisters, Joanne Billman and Candice Pamerleau, have not challenged McFadden's ruling. But the third sister, Kim Luciano, has joined Angstadt's ex-brother-in-law, Karl Matter, in an appeal to Superior Court.
Lauer and Goldman said the bond would prevent the estates' value from dissipating further, given estate expenses that work out to more than $600,000 a year. Angino, who represents Matter and Luciano, said there's no legal authority to require such a bond be posted.
McFadden, who heard arguments on Friday, did not issue a ruling, saying she needs to research the law.
"There's not going to be anything left, is that what you're saying?" McFadden asked Lauer.
In an interview Monday, Lauer did not go that far. He said he believes there will be money remaining when all is said and done — though how much, he was unsure.
Already, the numbers before the heirs are far less than was thought in 2007, when a financial document discovered after Peter Karoly's and Angstadt's deaths suggested they were worth $40 million.
The current estimates are a "very far cry" from that, Lauer said.
riley.yates@mcall.com
610-253-5751
The beneficiaries' attorneys, Lauer and Robert Goldman, disclosed the mounting administrative expenses in a legal filing this month in which they sought to force the other side to post a $500,000 bond during appeals.
Two of the Karoly sisters, Joanne Billman and Candice Pamerleau, have not challenged McFadden's ruling. But the third sister, Kim Luciano, has joined Angstadt's ex-brother-in-law, Karl Matter, in an appeal to Superior Court.
Lauer and Goldman said the bond would prevent the estates' value from dissipating further, given estate expenses that work out to more than $600,000 a year. Angino, who represents Matter and Luciano, said there's no legal authority to require such a bond be posted.
McFadden, who heard arguments on Friday, did not issue a ruling, saying she needs to research the law.
"There's not going to be anything left, is that what you're saying?" McFadden asked Lauer.
In an interview Monday, Lauer did not go that far. He said he believes there will be money remaining when all is said and done — though how much, he was unsure.
Already, the numbers before the heirs are far less than was thought in 2007, when a financial document discovered after Peter Karoly's and Angstadt's deaths suggested they were worth $40 million.
The current estimates are a "very far cry" from that, Lauer said.
riley.yates@mcall.com
610-253-5751
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