Just because Denver Broncos Owner Pat Bowlen was a billionaire did not mean his business succession planning was easy. After leading the Broncos to eight Super Bowls, the NFL Hall of Famer began consolidating his Broncos ownership in 2002 to ensure one or more of his seven children would succeed him in running the franchise. Instead, two probate lawsuits ensued—one even before Bowlen’s 2019 death—and the team sold for $4.65 billion in 2022.
Some could argue the succession plan failed because the Bowlens no longer own the Broncos. But others would contend the succession plan worked with the family making billions on a $78 million initial investment. No matter the point of view, the Denver Broncos’ sale demonstrates that succession planning is hard for owners of businesses of all sizes while providing the following lessons:
- There Are Fates Worse Than Death: All business owners know they will die, but what happens if they become incapacitated? Much of the family feud for control of the team started because doctors reportedly diagnosed Bowlen with Alzheimer’s in 2006. This is before Bowlen executed his estate plan and started preparing one child to become his successor. As incapacity, like death, can happen at any time, business owners need to have plans in place that address both contingencies.
- Who You Put in Charge Matters: Bowlen nominated three people to serve as his powers of attorney/trustees to execute his estate plan—the Broncos’ CEO, the team’s executive vice president/general counsel, and his personal attorney. When these fiduciaries balked at one of the children trying to become the next owner before Bowlen died, Bowlen’s brother filed a lawsuit claiming the fiduciaries were failing to honor Bowlen’s wishes. So not only must business owners select fiduciaries who will honor their estate planning goals after death/incapacity, but business owners must clearly articulate their intent to these trusted individuals.
- People Plan, and God Laughs: If the children wanted to succeed their father, Bowlen’s trustees required the following: 1) an advanced degree such as a JD or MBA; and 2) five years of senior management experience with the NFL, the Broncos, or the Broncos’ stadium management company. The issue is that all seven children had to agree to the eventual succession plan. With two children working to satisfy the requirements, the family became divided. When one side filed an undue influence lawsuit to invalidate the estate plan after Bowlen’s death, it doomed the team’s plan for staying within the family. Not only should accountants, financial advisors, and estate planning attorneys be part of the succession planning team, but a probate/commercial litigation attorney consultation can help stress test the plan prior to death.
This article was originally published in Legal Connections.
As a shareholder and Co-Chair of Reminger's Estates, Trusts, and Probate Litigation Practice Group, Paul has statewide experience involving an array of million-dollar estate, trust, and guardianship issues such as undue ...
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