Jan. 31, 2003 - Robert Pritzker acknowledges that he transferred assets out of trusts that benefited his daughter Liesel but contends that he properly exercised his authority to do so, according to a court document filed Thursday. 

The filing provides the first glimpse of a legal defense offered by key members of the Pritzker family in response to the lawsuit brought by Liesel, which claims her trust funds were drained by $1 billion. 

The court document contends that as the trustee Robert Pritzker had "sole discretion" to make transactions and that he did so in accordance with family policy to treat heirs in accordance to their age -- and not their lineage from patriarch A.N. Pritkzer. 

Liesel Pritzker, 18, and her older brother, Matthew, were born more than 20 years after their half-siblings. 

"All of the transactions at issue were authorized by the terms of the relevant trust agreements and were made in accordance with well-established family policies -- dating back to 1955 -- to manage the family wealth and to maintain equity among cohorts of beneficiaries of similar age," the filing says. 

The filing came in response to a motion presented last week by Liesel's attorneys seeking to have assets of the Pritzker Foundation frozen until the lawsuit is resolved. 

The court filing was a response from Robert Pritzker as well as Nicholas, Penny and Thomas Pritzker, the triumvirate that runs the family empire, including the Hyatt Hotel chain. 

Liesel contends that the foundation benefited from her father's transfer of assets in the mid-1990s from her and her brother's trust funds. Matthew Pritzker has not filed suit although he has retained former U.S. attorney Dan Webb to represent him. 

Lazar Raynal, lead attorney for Liesel with the firm of McDermott, Will & Emery, said Thursday's court filing supports his client's claim. 

"It appears they are admitting the essential allegations of our case," Raynal said. 

Barry Rosen, attorney with Sachnoff & Weaver, the firm that represents Robert Pritzker and two children from his first marriage, disagreed. 

"There is no real dispute about what is in Liesel's trusts," Rosen said. "But as noted in our court filings, the actions with respect to her trusts were entirely proper." 

The court filing cites a "sole discretion" clause that grants the trustee broad authority for decision making. 

Robert Sitkoff, an assistant law professor at Northwestern University who teaches trust law, said such clauses are common. 

"Sole discretion doesn't mean absolute, unreviewable authority," Sitkoff said. 

However, Sitkoff noted other language from the trust agreement cited in the filing that seems to weigh in favor of the trustee. For example, the agreement calls for the trustee to consider the interests of the individual beneficiary as well as the family as a whole. 

In addition, the filing cites a court order from 1977 that grants the trustee "full authority" and "uncontrolled discretion" to make gifts to the Pritzker Foundation. 

Yet, Liesel's attorney's previously quoted A.N. Pritzker's testimony from those proceedings in which the patriarch said a trustee would "be governed by reasonability" and that to empty a trust would be a violation. 

The court filing also disputes Liesel's contention that her father looted her trusts as a result of a dispute over whether she could star in a Hollywood movie. Currently, Liesel's trust funds are worth more than $160 million, the filing says. 

The filing also reveals that the present asset value of the Pritzker Foundation is more than $300 million, down roughly 50 percent from its value in 2001. Liesel's attorneys contend that the foundation's assets were shifted to new foundations established by her cousins. The filing doesn't dispute that although it says there are no plans for further transfers. 

No hearing date has been set to hear arguments on Liesel's motion. Attorneys are scheduled to be back in court for a status hearing Feb. 28. Rosen said they would file a motion to dismiss the lawsuit by that date. 

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