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Albert H. Manwaring IV Albert H. Manwaring IV

Wilmington Trust serves as the sole trustee for certain du Pont Family Trusts established in the 1940s and 1950s. For many years, Wilmington Trust was closely associated with the du Pont family, and was managed in part by family members. Following the near collapse of its business in the 2008 financial crisis, Wilmington Trust was acquired by M&T Bank. Today, Wilmington Trust is a wholly-owned subsidiary of M&T Bank, and no member of the du Pont family serves on Wilmington Trust’s board. In 2013, at the prompting of the current trusts’ beneficiary, Douglas du Pont, Wilmington Trust agreed to modify the trusts to authorize Mr. du Pont to serve as the “Investment Direction Advisor” for the trusts’ assets, which limited Wilmington Trust to a principally ministerial role in the trusts’ on-going administration. In October 2016, alleged tensions between Mr. du Pont and Wilmington Trust led Mr. du Pont to petition the Court of Chancery to seek to remove Wilmington Trust as the trustee altogether, and to appoint a successor trustee.

In a rare decision interpreting the statutory provisions for judicial removal of a trustee under the Delaware Trust Code, the Court of Chancery dismissed Mr. du Pont’s petition to remove Wilmington Trust as trustee on the grounds that the petition failed to state a legally sufficient basis for removal under 12 Del. C. Section 3327(3),  Du Pont v. Wilmington Trust, C.A. No. 12836-VCS (Del. Ch. Oct. 6). The court first set forth the bases for judicial removal of a trustee under the Delaware Trust Code. In the absence of a breach of trust for a trustee’s violation of a duty owed to a beneficiary of a trust, and “having due regard for the expressed intention of the trustor and the best interests of the beneficiaries,” the court may remove a trustee under 12 Del. C. Section 3327(3): for “a substantial change in circumstances”; if “the trustee is unfit, unwilling, or unable to administer the trust properly”; or if “hostility between the trustee and beneficiaries … threatens the efficient administration of the trust.”

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