Jewish Family split over Davidson Foundation's $1 billion in assets

The widow of late billionaire William Davidson is feuding with her daughter over how to spend more than $1 billion from his charitable trust, according to court papers.

Davidson's widow, Karen Davidson, and his son, Ethan Davidson, who want to keep the Foundation as a single entity, are united against Karen's daughter from a previous marriage, Mary Aaron, and her husband Jonathan Aaron, who are seeking to split it in two.

The two sides are accusing each other of wasting time and money.

Making matters more complicated, all four are on the Foundation's board, and Jonathan Aaron is the Foundation's president.

According to Crains Detroit, Jonathan Aaron said in court papers that the foundation is unable to make gifts or govern itself because the Davidsons have created a deadlock pattern of 2-2 votes, which left the foundation with no board after all their terms of office expired in January.

William Davidson was the billionaire President, Chairman and CEO of Guardian Industries and owned the Detroit Pistons basketball team.

He was a noted philanthropist, and formed the Foundation shortly before his death at 86 in 2009 with the aim of aiding Jewish organizations and the city of Detroit, among other causes.

Since then, the Foundation has given millions of dollars to causes such as the Jewish Federation of Metro Detroit, the University of Texas and the American Committee for the Weizmann Institute of Science in New York.

In 2012 alone, the Foundation gifted more than $46 million.

According to court papers unsealed on Friday, Karen and Ethan Davidson allege Jonathan Aaron manufactured a dispute within the family in order to have a court divide the assets in two, and give him complete control over one half.

Jonathan Aaron filed a petition in Oakland Probate Court in March, saying board members had reached an dead end over the make-up of the board.

He asked the judge to divide the foundation into two entities, saying in filings that it 'is warranted, and required, to bring to an end the current impasse, to stop the ongoing waste of foundation assets on expensive consultants and to protect and preserve the foundation’s charitable assets and Mr Davidson’s charitable intentions.'

Karen Davidson disagrees, saying in an affidavit that her husband intended the foundation to be a single, family-oriented organization.

'It was meant to be a family foundation, the family structure of the foundation provides that family members will support one another in the philanthropic endeavors of the foundation,' her court filing said.

'It is a way of keeping the family working together now and into the future on philanthropic matters. William Davidson specifically expressed this to me before he died.'

Free Press Detroit says that after the board hired a consulting firm to review Jonathan Aaron’s $320,000 salary in 2009 and the board voted unanimously to reduce the salary to $125,000 a year, frictions within the Foundation increased.

The matter is currently before Oakland Probate Judge Daniel O’Brien, but it's unlikely to reach its conclusion in Detroit. O’Brien ruled earlier this month he did not have jurisdiction over the matter because the Foundation was incorporated in Delaware.

Family spokesman Matt Friedman said Karen and Ethan Davidson are hopeful the matter will be resolved amicably and vowed that the Foundation would continue its good work.

'They feel very strongly about it,' he said.