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The Honolulu Advertiser
Posted on: Sunday, June 11, 2006

The great divide

By Rick Daysog
Advertiser Staff Writer

The Campbell fortune was built on Maui’s Pioneer Mill, a sugar operation that James Campbell and two partners established.

ADVERTISER LIBRARY PHOTO | March 3, 1999

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CAMPBELL HEIRS

Est. 1.46 billion

Another 24 or 25 beneficiaries, 58 percent

250 million

Abigail Kawananakoa, 80, Honolulu, 12.5 percent

166.6 million

Ron Olson, 67, Reno, Nev., 8.34 percent

125 million

Kapi'olani Marignoli, 78, local resident, 6.25 percent

100 million

Louise Stevenson, 90, Honolulu, 5 percent

100 million

James Shingle, 81, Honolulu, 5 percent

100 million

Muriel Lighter, 54, Kailua, 5 percent

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THE ESTATE OF JAMES CAMPBELL:

Founded: 1900

Assets: $2.3 billion

2005 revenues: $199.9 million

Chief executive officer: Stephen MacMillan

Trustees: Richard Gushman, David Heenan, Clint Churchill and retired Navy Adm. R.J. Zlatoper

Holdings: 55,400 acres of land in Hawai'i and 16.6 million square feet of office retail and industrial properties on the Mainland.

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Six heirs to the Campbell Estate fortune will each receive $100 million or more when the 106-year-old private land trust terminates early next year.

Another 15 members of the Campbell family will receive about $50 million each in the form of cash or stock in the trust's successor company.

On Jan. 20, the $2.3 billion Estate of James Campbell — one of the state's largest landowners and the prime mover behind the development of Kapolei — will begin the process of distributing its assets to more than 30 beneficiaries, turning dozens of already well-heeled individuals into multimillionaires.

The payout represents one of the largest transfers of wealth in Hawaiian history, dwarfing the $800 million that's being distributed to the 20 heirs of the Estate of Samuel Mills Damon.

Campbell beneficiaries have gotten large annual distributions from the trust for more than a century, but after Jan. 20, the money will actually be theirs.

"They've always been rich, and now they will have control over it," said former Kamehameha Schools trustee Oswald Stender, who served as the Campbell Estate's chief executive officer in the 1970s and 1980s.

Trust officials declined to provide details on how much of the $2.3 billion trust will be distributed to beneficiaries and declined to comment on matters relating to individual beneficiaries of the Campbell Estate.

Court records and estate documents reviewed by The Advertiser show that nearly half of the trust's assets will go to six individuals. Several are prominent local philanthropists and two are descendants of Hawaiian royalty. One also has ties to Italian nobility.

They include:

  • Abigail Kawananakoa, 80, who will receive the largest distribution, about one-eighth of the trust. Based on an estimated $2 billion distribution after expenses, Kawananakoa's stake will be worth about $250 million.

    Kawananakoa traces her ancestry to Queen Emma and King David Kalakaua and is a great-granddaughter of James Campbell. She is a well-known local philanthropist, a champion horse breeder and a former president of the Friends of Iolani Palace.

  • Reno, Nev., resident Ronald Olson will receive the next- biggest portion, 8.34 percent, or about $166 million. Olson, 67, is Campbell's great-great grandson.

  • Local resident Kapi'olani Kawananakoa Marignoli will receive 6.25 percent of the trust, or about $125 million. The 78-year-old Marignoli is a descendant of Queen Emma and King Kalakaua. She is the widow of an Italian marquess, Filippo Marignoli, whose family traces its noble status back to the 13th century.

  • Honolulu resident James Shingle will get 5 percent of the estate's assets, which will be worth about $100 million. Shingle, 81, is president of the James & Abigail Campbell Foundation, a local charitable foundation established by the Campbell heirs.

  • Shingle's sister, 90-year-old Louise Stevenson of Honolulu, will receive about $100 million.

  • Shingle's and Stevenson's niece, 54-year-old Muriel Lighter of Kailua, also will receive about $100 million.

    Other beneficiaries include Quentin Kawananakoa, a former state representative running for the U.S. House seat now held by Ed Case. He will receive 1.25 percent or about $25 million.

    The Advertiser's attempts to get comment from the six major beneficiaries were not successful.

    Stevenson said she did not want to discuss the distributions. Shingle, Lighter and Marignoli did not return calls. Kawananakoa and Olson could not be reached.

    Founded in 1900, the Estate of James Campbell is a private, for-profit trust set up by the will of Scottish carpenter James Campbell to benefit his heirs.

    Under the terms of Campbell's will, the trust ends 20 years after the death of his last surviving daughter, which occurred on Jan. 21, 1987.

    REAL-ESTATE EMPIRE

    Unlike the Damon Estate, which sold off nearly all of its assets and will eventually close its doors, the Campbell Estate has created a successor company, James Campbell Co. LLC, which will assume ownership of the trust's real-estate portfolio.

    Most of the estate's beneficiaries will get their distributions in the form of shares in the successor company, although some have opted to take cash or a combination of cash and stock. The beneficiaries can sell their shares, with some restrictions, or borrow against them.

    Former trust officials and one former court-appointed master of the Campbell Estate said the generous payouts underscore decades of astute financial and corporate planning on the part of the Campbell Estates' executives.

    During the 1950s and 1960s, the estate began transforming itself from an agricultural landowner to a commercial real-estate company by building industrial parks and other commercial projects, said Wade McVay, who served as the Campbell Estate's CEO during the 1960s.

    The trust later sold much of its residential leasehold properties, bringing in a huge cash infusion which was reinvested in commercial properties in Hawai'i and the Mainland, added Stender, who now serves as a trustee of the Office of Hawaiian Affairs.

    "They've gone from a plantation luna mentality to a very well-run real-estate empire. They've hired good people and made good, solid investments," said Thomas Foley, who served as a court-appointed master for the Campbell Estate during the 1980s.

    "This is a good example where the beneficiaries' interests have been properly safeguarded."

    FINANCIAL PROBLEMS

    Despite the Campbell family wealth, several beneficiaries have had well-publicized financial problems over the years.

    In 2003, Campbell heir Fred Trotter filed for Chapter 7 bankruptcy protection to fend off creditors from his company, Koolau Agricultural Co., which developed water resources in Punalu'u Valley in Windward O'ahu.

    Trotter, who also served as trustee of the estate from 1970 to 1991, is entitled to about $25 million when the estate terminates.

    Bankruptcy Court records showed that Trotter owed about $10 million to several creditors, including his mother, Muriel Sutherland, who lent him $1 million before she died in 2003.

    Bankruptcy Judge Robert Faris discharged Trotter from his liabilities. Trotter did not return calls to his office.

    Trotter's relative Abigail Kawananakoa filed for Chapter 11 bankruptcy in 1997 after the Internal Revenue Service claimed she owed about $5 million in back taxes, interest and penalties.

    In her court filings, Kawananakoa said the IRS actions would have forced her to liquidate her assets and give up her business ventures.

    At the time, Kawananakoa's bankruptcy lawyers said she received disbursements of $5 million from the Campbell Estate in 1994 and another $4.6 million in 1995. More than 30 of the Campbell Estate's beneficiaries, including Kawananakoa, receive a share of the trust's annual income.

    Kawananakoa settled with the IRS after she obtained a $7.75 million loan commitment from Bank of Hawaii to pay the creditors. She later withdrew her bankruptcy filing.

    The Campbell wealth has also attracted interest from at least one alleged imposter.

    In 2004, the IRS thwarted a Pennsylvania woman from posing as Abigail Kawananakoa and claiming $2.1 million in tax refunds that Kawananakoa was owed.

    The woman, Abigail Roberts, used Kawananakoa's Social Security number to illegally obtain tax refunds from money that Kawananakoa deposited with the IRS for her estimated income taxes.

    Using seizure warrants, the IRS was able to retrieve most of Kawananakoa's money from Roberts' bank account. Federal prosecutors did not file criminal charges against Roberts.


    • • •


    HISTORY OF CAMPBELL ESTATE

    1850: James Campbell, a 24-year-old carpenter, arrives in Lahaina aboard a whaling ship.

    1860: Campbell, Henry Turton and James Dunbar establish the Pioneer Mill Co., which became the basis of Campbell's fortune.

    1863: Pioneer Mill acquires Lahaina Sugar Co.

    1876: Campbell buys approximately 15,000 acres in Kahuku, including Kahuku Ranch, for $63,500.

    1877: Campbell marries Abigail Kuaihelani Maipinepine, and the couple subsequently moves to O'ahu.

    1877: Campbell sells his interest in Pioneer Mill.

    1877: About 41,000 acres at Honouliuli is purchased for $95,000. During this period, Campbell buys property in downtown Honolulu, and land on the Big Island and Maui.

    1885: Pioneer Mill reacquired.

    1887-1888: Campbell serves in the Legislature, representing Maui, Moloka'i and Lana'i.

    1889: He sells his half interest in Pioneer Mill for $250,000.

    1889: The Honouliuli and Kahuku lands are leased to Benjamin F. Dillingham for a 50-year term at a combined annual rent of $50,000. Dillingham builds a railroad to serve O'ahu sugar plantations.

    1890: Dillingham subleases a portion of the Kahuku lands to James B. Castle, who establishes the Kahuku Plantation.

    1892: The Ewa Plantation Co.'s first crop of 2,849 tons is harvested on Honouliuli land subleased by Dillingham to W.R. Castle.

    1892: At public auction, Campbell buys his second-largest tract of land — more than 25,000 acres — at Kahauale'a on the Big Island.

    1897: Oahu Sugar Co. is developed on the Honouliuli land, harvesting its first crop in 1899.

    1900: Campbell dies after a lengthy illness, leaving an estate valued at more than $3 million. His will sets up a trust for his widow, four surviving daughters and their heirs. The will stipulates that the trust is to terminate 20 years after the death of his last surviving daughter.

    1987: Beatrice Campbell Wrigley, the last surviving daughter, dies.

    1990: The estate begins developing Kapolei.

    2003: Court approves a plan to create a new company that will continue the estate's business once the estate terminates.

    2004: The estate secures $645 million in financing to continue business beyond 2007.

    2004: James Campbell Co. LLC, the for-profit private company that will take over the estate's assets and liabilities, is formed.

    Jan. 20, 2007: The trust will terminate.



    — Advertiser staff

    Reach Rick Daysog at rdaysog@honoluluadvertiser.com.