CORRECTION, 7/1/13, 6:30 p.m. EST: An earlier version of this story incorrectly reported the U.S. state where Sergei Yates lives and where he initiated a legal action against local lawyer Jody Vannoy. It is Wyoming. The information has been corrected in the subheadline and first, seventh, and ninth paragraphs below. We regret the error.
A Wyoming man who was orphaned as a teenager when the airplane his father was piloting crashed on Martha's Vineyard is suing Skadden, Arps, Slate, Meagher & Flom and one of the firm's lawyers over what the plaintiff claims is a years-long run of alleged negligence that has whittled down the value of his inheritance.
In his suit, filed Wednesday in U.S. district court in New Jersey, Sergei Yates names Skadden as a defendant, along with Robert Del Tufo, a former New Jersey attorney general now of counsel with the firm; two executors of the trusts at issue; and PNC Bank.
The story behind the lawsuit begins in 1994, when Charles Yates, a former New Jersey state lawmaker and prominent businessman, and his second wife, Anya Yates, adopted Sergei Yates in Russia and brought him back to the United States. Six years later, with Charles at the controls, a small plane carrying him, his wife, and the couple's two other young children to Martha's Vineyard crashed, killing all four.
According to his suit, Sergei Yates, who was 16 at the time of the accident, became the beneficiary of a series of trusts upon the death of his parents, including a $5 million fund connected to his parents' life insurance policies and another created with the proceeds from the estate of his mother, who died without a will. With the divvying up of Charles Yates's assets complicated by his five children from an earlier marriage, Sergei Yates soon "became involved in a controversy with his half-brothers and half-sisters over the proper distribution of their father's estate," according to the 17-page complaint.
Del Tufo and Skadden represented Yates in connection with the dispute beginning in 2003, ultimately securing him a sum equal to one-sixth of Charles Yates's estate that was placed into a third trust, the complaint says. (The crash also spawned a wrongful death suit brought by relatives of Anya Yates that resulted in a $1.8 million settlement for Sergei Yates, according to court filings.)
Sergei Yates, now 29, claims he has had little control over any of the trusts established in his name. Charles Yates's son Roy Yates served as sole trustee of the life insurance trust until late 2004, when he designated Winifred Benchley, a New Jersey legislator and wife of Jaws author Peter Benchley, to serve as cotrustee. The pair appointed PNC Bank as corporate fiduciary and cotrustee in 2004, according to the suit. Roy Yates, Benchley, and PNC—all named as defendants in the suit—also serve as trustees of the trust born out of the will dispute. Roy Yates and Benchley could not be reached for comment Friday. A PNC spokesman declined to comment.
A Wyoming lawyer named Jody Vannoy, meanwhile, was appointed to serve as trustee to the trust tied to the estate of Anya Yates.
Sergei Yates says in his suit that while he believed all three trusts were being overseen with his best interests in mind, without his knowledge "a series of events began to unfold in the summer of 2010 that told a very different story about the administration of his trusts."
Around that time, he initiated legal action in Wyoming against Vannoy for failing to give him a statement of the trust's assets. During discovery, Sergei Yates discovered that the lawyer—who has since been disbarred and whose current whereabouts are unknown—was being regularly paid out of the insurance trust and settlement trust by Roy Yates, Benchley, and PNC, "purportedly on behalf of or for the benefit of Sergei."
Skadden and Del Tufo, Yates claims, were "fully aware" that the funds were going to Vannoy without Yates's consent. (Yates also alleges that Del Tufo may have been romantically linked to Vannoy, presenting a conflict of interest.) Skadden and Del Tufo "also permitted Sergei to enter into questionable transactions," he claims, including taking out a mortgage with PNC Bank using trust funds, which he says presented "an obvious conflict of interest" because of PNC's role as cotrustee.
"Del Tufo and Skadden acted with wanton and willful disregard of the rights of Sergei," alleges the suit, which includes a negligence claim against Del Tufo and Skadden and breach of fiduciary duty and equitable relief claims against the other defendants. According to the complaint, Del Tufo and Skadden "were recommended by Benchley and paid by the trusts to serve as legal counsel to Sergei."
A New Jersey native, Del Tufo joined Skadden's New York office in 1993 after serving a three-year term as New Jersey's attorney general. Earlier in his career, he ran an unsuccessful race to become the Democratic nominee in the state's 1985 gubernatorial election and worked as U.S. attorney for the district of New Jersey from 1977 to 1980. Neither Del Tufo nor a Skadden spokeswoman responded to requests for comment this week.
Philadelphia lawyer Clifford Haines, who is representing Yates in the case, said his client lives with his wife and three children in Wyoming, where he builds homes.
Haines says that while the exact amount of money at issue is still being determined, Yates believes he is owed something "in the seven-figure range."