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S. Arabia’s Prince seeks enforcement of Hillblom pact
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Posted on Jul 13 1999
Saudi Arabia’s Prince Saud Bin Naif Abdulazzis is asking the Hillblom Estate Executor to honor the agreement which he had signed with Larry Hillblom regarding the mode of payment of his $282 million claims on DHL International.
“The Executor does not dispute that Prince Saud has an enforceable claim to share appreciation rights in DHLI,” the Prince’s lawyer stated in a legal memorandum filed in the Superior Court Friday. “What remains is the determination of how much that claim is worth.”
The executor Bank of Saipan claimed it owed Prince Saud only $255 million, as it refuses to include interests and accumulated dividends totaling $27 million.
The Prince’s lawyer, Lecia M. Eason, said the agreement signed on June 18, 1990 between Hillblom and Prince Saud should be used as a mechanism to reconcile the accounting differences between the two parties.
The agreement stated that Prince Saud shall be paid based on the fair market value of his interests.
The fair market value of Hillblom’s DHLI shares at the time time they were sold in 1997 was $282 million, hence Prince Saud’s claim.
Hillblom, who died in a 1995 plane crash, was a co-founder of DHL international and owned 49 percent of one of its holding companies.
Prince Saud’s involvement in Hillblom’s business began in the mid-1980’s, when DHL was experiencing serious cash flow problems.
By way of assistance to Hillblom and the company, Prince Saud offered to invest $30 million in the entire DHL network.
Before this transaction could be done, Hillblom found other investors, and thus asked Prince Saud to stand aside so that they could complete a deal with the new other investors.
In exchange, Hillblom promised Prince Saud certain appreciation interest in the entire DHL network.
When the Prince was paid part of those interests in 1990 and 1992, the $30 million contribution that he had offered was subtracted as an offset from his interest value.
