IN THE CIRCUIT COURT OF BOONE COUNTY

STATE OF MISSOURI
PROBATE DIVISION

In the Matter of certain Testamentary Trusts)

created under the Last Will and Testament ) Case No.
ofSherlock Hibbs, )
) Probate Division

JOINT PETITION FOR APPROVAL OF NONJUDICIAL SETTLEMENT

AGREEMENT AND REOUEST FOR MODIFICATION OF TRUSTS

COMES NOW Petitioners The Curators of the University of Missouri, the Board of

Curators ofthe University ofMissouri and the Members ofthe Board ofCurators ofthe University

of Missouri (hereinafter referred to separately or collectively as the "Curators") individually and

as trustee and beneficiary ofvarious testamentaty trusts created under the Last Will and Testament

ofSherlock Hibbs,and Hillsdale College,a beneficiary under such trusts, and for their Petition to

Approve Nonjudicial Settlement Agreement and Request for Modiflcation of Trusts, state as

follows:

PARTIES

1. The legal name of the University of Missouri System is "The Curators of the

University of Missouri." R.S. Mo. § 172.020 ("the state university is hereby incorporated and

created as a body politic and shall be known by the name of'The Curators of the University of

Missouri'"). The Board of Curators ofthe University ofMissouri governs the University System.

R.S. Mo.§ 172.010("A university is hereby instituted in this state, the government whereof shall

be vested in a board of curators"). The Board consists of individual members appointed by the

Govemor, by and with the advice and consent of the Senate, each for a term of six years. The

members ofthe Board of Curators have by unanimous resolution authorized President Mun Choi
to execute this Petition and the non-judicial settlement agreement on behalfoftheir individual and

official capacities and on behalfofthe Board ofCurators. The Curators have their principal place

of business in Boone County, Missouri, and serves as a trustee of various testamentary trusts

(hereinafter collectively referred to as "the Trusts") created under the Last Will and Testament of

Sherlock Hibbs and is a permissible beneficiaiy ofthe Trusts.

2. Hillsdale College ("Hillsdale") is a private, nonsectarian, coeducational college

located in Hillsdale, Michigan and is a nonprofit corporation organized under the laws ofthe State

of Michigan, and is a qualified beneficiary ofthe Trusts.

3. The Settlor of the Trusts is deceased and there are no permissive or qualified

beneficiaries under the Trusts, living or deceased, other than Curators and Hillsdale.

JURISDICTION AND VENUE

4. Jurisdiction and venue are proper in this Court pursuant to Mo.Rev. Stat. §§ 456.2-

202 and 456.2-204 because the principal place ofadministration ofthe Trusts are in Boone County,

Missouri and the Trusts have been registered in the Circuit Court of Boone, County, Missouri,

Probate Division, in cases numbered 18BA-PR00418, 18BA-PR00419, 18BA-PR00420, 18BA-

PR00421, 18BA-PR00422and 18BA-PR00423.

5. Curators and Hillsdale are subject to the jurisdiction of this Court in matters

involving the internal affairs ofthe Trusts,including an action to approve a nonjudicial settlement

agreement and to modify a trust, by virtue of Mo.Rev. Stat. §456.2-202.

 THE TRUST AGREEMENT

6. Sherlock Hibbs("Settlor")executed his Last Will and Testament on April 3,2002

and his first Codicil to the Will on April 5,2002(collectively referred to as the "Will").

7. Settlor died on July 5, 2002 while domiciled in Broward County, Ft. Lauderdale,

Florida and the Will was admitted to Probate on July 9,2002 in the Probate Division of Broward

County,Florida, Case Number PRC020003961.

8. Pursuant to Article Seven, Section (83) of the Will (hereinafter the "Section 83

Trust Instrument"), a certain sum was to be paid to Curators as trustees in trust to be divided into

six (6) separate and named trust funds for the benefit of and to be used at the University of

Missouri-Columbia College of Business and Public Administration to fund certain Chairs and

Distinguished Professorships.

9. That the stated purpose of the Settlor as stated by Article Seven, Section (83)(b)

was as follows:

The said separate and named trust funds are established for the benefit ofand shall be used
at the UNIVERSITY OF MISSOURI-COLUMBIA COLLEGE OF BUSINESS AND
PUBLIC ADMINISTRATION.

10. Pursuant to the terms of the Section 83 Trust Instrument, if the Chair(s) or

Distinguished Professorship(s) were vacant for a certain period of time, the Curators were to

distribute the balance ofsuch trust fund to Hillsdale College.

11. Pursuant to the terms of the Section 83 Trust Instrument, the Curators as Trustee

received the distribution into the Trust and then separated the Trust into Six (6) separate Trusts

and administered the Trusts pursuant to the terms ofthe Section 83 Trust Instrument.

12. The six separate Trusts were registered with this Court as follows:
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 (1) The James Harvey Rogers Chair of Money, Credit and Banking Trust, Case

No. 18BA-PR00419;

(2) The Emma S. Hibbs/Harry Gunnison Brown Chair of Business and

Economics, Case No, 18BA-PR00421;

(3) The Emma S,Hibbs/Frederick A. Middlebush Chair ofEntrepreneurship, Case

No. 18BA-PR00422;

(4) The Emma S. Hibbs Distinguished Professorship (I), Case No. 18BA-

PR00420;

(5) The Emma S. Hibbs Distinguished Professorship (II), Case No. 18BA-

PR00418; and

(6) The Myron Watkins Distinguished Professorship, Case No. 18BA-PR00423.

13. Article Twelve, Section (d) of the Will provides that a trustee of a trust created

under the Will shall have all power, authority and protection granted to the trustees under the laws

ofthe state in which it is domiciled with reference to the administration ofany trust created by the
Will, although the validity and interpretation ofthe trust shall be governed by the laws ofthe State

of Florida.

14. This matter involves the power and authority and protection granted to the trustee

in reference to the administration of the Trusts, rather than the validity and interpretation of the

Section 83 Trust Instrument, and therefore Missouri law applies.

15. Both Missouri and Florida have adopted the Uniform Trust Code and the applicable

law ofMissouri and Florida are similar and the applicability ofeither state law regarding the Court
approval ofa nonjudiciai settlement agreement or modification ofthe Section 83 Trust Instrument

does not affect the requests for relief herein. Mo. Rev. Stat. §456.1-101 et. seq.; Fla. Stat. Ann.

§736.0101 et. seq.

THE LAWSUITS

16. Hillsdale first filed a lawsuit against Curators relating to the Trusts in Case No.

17SL-CC03833, of which venue was changed to the Boone County, Missouri Circuit Court,

Probate Division, and assigned a new case number of 19BA-PR00406.

17. Hillsdale filed a second lawsuit against past and current members ofthe Board of

Curators ofthe University of Missouri and recipients oftrust funds relating to the Trusts in Case

No. 19BA-PR00425.

18. The gravamen ofthe lawsuits is a dispute between Curators and Hillsdale regarding

certain provisions in the Section 83 Trust Instrument regarding the qualifications and experience

ofappointees to the Chairs and Distinguished Professorships.

19. Specifically, the Section 83 Trust Instrument provides that the appointees to the

Chairs and Distinguished Professorship "must be a dedicated and articulate disciple ofthe free and

open market economy (The Ludwig von Mises Austrian School of Economics)" (hereinafter "a

Disciple").

20. Final judicial resolution of the lawsuits would not necessarily result in a final

resolution of the dispute as the applicability of certain terms ofthe Section 83 Trust Instrument,

including the qualifications and experience of future appointees of the Chairs and Distinguished

Professorships, may continue to be litigated into perpetuity.

 APPLICABLE LAW

21. All interested persons may enter into a binding nonjudicial settlement agreement

with respect to matters involving a trust, provided that the matters agreed to do not violate a

material purpose ofthe trust and include terms and conditions that could be properly approved by
a court. Mo.Rev. Stat. § 456.1-111.

22. The term "interested persons" means the persons"whose consent would be required

in order to achieve a binding settlement were the settlement to be approved by the court." Mo.

Rev. Stat. §456.1-111.1.

23. The term "interested persons" includes beneficiaries and any others having a

property right in or claim against a trust estate which may be affected by ajudicial proceeding. It

also includes fiduciaries and other persons representing interested persons. Mo.Rev. Stat. §456.1-

103(10).

24. Curators and Hillsdale are the only "interested persons" as it relates to the Trusts.

25. Matters that may be resolved by a nonjudicial settlement agreement include, but are

not limited to,"the interpretation or construction ofthe terms ofthe trust"; "direction to a trustee

to refrain from performing a particular act or the grant to a trustee of any necessary or desirable

power"; and "liability of a trustee for an action relating to the trust." Mo. Rev. Stat. § 456.1-

111.4(1),(3)and (6).

26. Any interested person may request the court to approve a nonjudicial settlement

agreement and to determine whether the agreement contains terms and conditions the court could

have properly approved. Mo.Rev. Stat. § 456.1-111.5

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 27. A court may modify the dispositive terms ofa trust if, because ofcircumstances not

anticipated by the settlor, modification will further the purposes of the trust. Mo. Rev. Stat. §

456.4-412.1.

28. 'A court may modify the management or administrative terms of a trust if

modification will further the purposes ofa trust. Mo.Rev. Stat. § 456.4-412.2.

29. If a particular charitable purpose becomes unlawful, impracticable, impossible to

achieve,or wasteful, the court may apply cy pres to modify or terminate the trust by directing that

the trust property be applied or distributed, in whole or in part, in a manner consistent with the

settlor's charitable purposes. Mo. Rev. Stat.§ 456.4-413.1

30. A court may reform the terms ofa trust, even ifunambiguous,to conform the terms

to the settlor's intention if it is proved by clear and convincing evidence that both the settlor's

intent and the terms of the trust were affected by a mistake offact or law, whether in expression

or inducement. Mo.Rev. Stat. § 456.4-415.

31. A beneficiary's consent to a trustee's actions and a release of the trustee from

liability are valid unless the consent or release was induced by the trustee's improper conduct or

the beneficiary was unaware ofhis or her legal rights or ofthe material facts relating to the consent

or release. Mo.Rev. Stat. § 456.10-1009.

32. Article Eleven,Section(b)ofthe Will authorizes a trustee ofany trust created under

the Will to compromise, settle or adjust any claim or demand by or against any part of any trust

and to agree to any rescission or modification of any contract or agreement in which any trust is
in any way involved, all upon such terms as the trustee shall deem best for the beneficiaries.
 COUNT I; APPROVAL OF NONJUDICIAL SETTLEMENT AGREEMENT

33. The parties incorporate each and every allegation contained in the paragraphs above

as if more fully set forth herein.

34. Curators and Hillsdale have reached an agreement on mutually beneficial

settlement terms under which Hillsdale will receive a lump sum payment and will relinquish any
past, current or future claims they may have against any person or entity relating in anyway to the

Trusts and the parties further agree that the terms of the Section 83 Trust Instrument will be

modified, all as set forth in the non-judicial Settlement Agreement, a copy of which is attached

hereto and incorporated by reference as Exhibit 1.

35. Those persons who are the sole distributees ofthe Trusts and thus are the qualified

beneficiaries as the term "Qualified Beneficiaries" is defined by Mo. Rev. Stat. §456.1-103(21)
and Fla. Stat. Ann. 736.0103(16)consist of Curators and Hillsdale.

36. The Settlement Agreement does not violate a material purpose ofthe Trusts.

37. The beneficiary's consent and release of the trustee from any liability was not

induced by the trustee's improper conduct and the beneficiary is aware of its legal rights and the
material facts relating to the consent and release.

38. Pursuant to Mo. Rev. Stat. §456.1-111.4 and Fla. Stat. Ann. §736.0111 this matter

may be resolved by a nonjudicial settlement agreement because it involves a matter involving a

trust and does not violate a material purpose ofthe trust; and pursuant to said statutes any interested

person may petition the court to approve a nonjudicial settlement agreement and to determine

whether the representation of all parties was adequate and to determine whether the agreement

contains terms and conditions the court could have properly approved.

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 WHEREFORE,the parties pray for ajudgment finding that all necessary parties have been

named; ajudgment finding that the nonjudicial settlement agreement attached hereto as Exhibit 1

contains terms and conditions the court could have properly approved; a judgment finding the

consents and releases contained in the nonjudicial settlement agreement are binding on the Parties

and their successors in interest; a judgment approving the nonjudicial settlement agreement; and

such other and further relief as the Court deemsjust and appropriate under the circumstances.

COUNT n; REQUEST FOR MODIFICATION OF TRUST AGREEMENT

39. The parties incorporate each and every allegation contained in the paragraphs above

as if more fully set forth herein.

40. Sections Mo.Rev. Stat. 456.4-412 and Fla. Stat. Arm. 736.04113 permit the Court

to modify a trust if, because of circumstances not anticipated by the settlor, modification will

further the purposes of the trust, and to the extent practicable, the modification is made in

accordance with the settlor's probable intention.

41. Sections Mo. Rev. Stat. 456.4-412 and Fla. Stat. Ann. 736.04113 also permit the

Court to modify the management or administrative terms ofa trust if modification will further the

purposes ofa trust

42. Sections Mo. Rev. Stat. 456.4-413 and Fla. Stat. Arm. 736.0413 permit the Court

to apply cy pres to modify the Trust by directing the trust property be applied or distributed, in

whole or in part, in a marmer consistent with the settlor's charitable purposes if a particular

charitable purpose becomes unlawful, impractical, impossible to achieve, or wastefiil, when there

is not a provision in the trust that would result in distribution ofthe trust property to a noncharitable

beneficiary and when such noncharitable provision takes effect the trust property is to revert to the
9
settlor and the settlor is still living, or fewer than twenty-one years have elapsed since the date of
the trust's creation.

43. There is no provision in the Section 83 Trust Instrument which would result in

distribution ofthe trust property to a noncharitable beneficiary.

44. A court may also reform the terms of a trust to conform the terms to the settlor's

intention ifthe settlor's intent and the terms ofthe trust were affected by a mistake offact or law,
whether in expression or inducement. Mo.Rev. Stat. § 456.4-415; Fla. Stat. Ann. 736.0415.

45. The Section 83 Trust Instrument grants the Trustee authority to modify the

administrative terms of the trust instrument as long as such modification does not jeopardize tax

exemptions or vitiate the consecutive five year requirement and "the free and open market
economy qualification" ofthe appointee as further described in the Section 83 Trust Instrument

46. The Settlor did not anticipate that Curators and Hillsdale would be involved in

multiple lawsuits, and possibly be parties to multiple future lawsuits into perpetuity,regarding the
meaning and application ofcertain provisions ofthe Section 83 Trust Instrument.

47. Modification of the management and administrative terms of the Section 83 Trust

Instrument will further the piuposes ofthe Trust to provide funds for the University of Missouri-

Columbia College of Business and Public Administration, as well as Hillsdale, rather than to be

spent in unending litigation.

48. There is no recognized independent accrediting organization that Curators and

Hillsdale agree would determine whether an appointee would qualify as a Disciple.

49. Due to facts and circumstances related to Curators, it is impractical, or impossible

to achieve, the agreement of the parties as to appointment of a Disciple to the Chairs and

10
Distinguished Professorships and such provision results in the wasting of trust assets in multiple,

and most likely endless, litigation regarding whether such a Disciple has been appointed to the

Chairs or Distinguished Professorships.

50. Modification of the terms of the Section 83 Trust Instrument to provide funds for

Hillsdale to use consistent with its understanding ofthe Settlor's intent, and to retain the remaining

funds in trast with the Curators as Trustee for the benefit ofthe University of Missouri-Columbia

College ofBusiness and Public Administration to fund Chairs and/or Distinguished Professorships

and to recognize certain individuals in such Chairs and/or Distinguished Professorships willfurther

the purposes ofthe Trusts.

51. Modification ofthe Section 83 Trust Instrument to provide funds for Hillsdale and

to retain the remaining fhnds in trust with Curators as Trustee for the benefit ofthe University of

Missouri-Columbia College of Business and Public Administration to fund Chairs and/or

Distinguished Professorshipsj to recognize certain individuals in such Chairs and/or Distinguished

I

Professorships, and whose appointees teach economics including, but not limited to, the

importance of free and open markets consistent with Settlor's charitable purposes and is clearly

necessary to carry out his wishes for the use ofthe fund.

52. The Settlor was mistaken in fact as to the ease and ability ofthe parties to agree as

to who qualifies as a Disciple and he did not intend that the Trusts were to be the subject of
continuous litigation.

53. There are no parties that object to the modification of the Section 83 Trust

Instrument as provided in the nonjudicial settlement agreement.

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 WHEREFORE,the parties pray for ajudgment Ending that all necessary parties have been

named;that all beneEciaries have consented to the modlEcation ofthe Section 83 Trust Instrument

and that the modification is not inconsistent with a material purpose of the Trust; a judgment

modifying the Section 83 Trust Instrument as provided in the nonjudicial settlement agreement;

and suc^^her and further reliefas the Court deemsjust and approprwtenunder the circumstances.

The Curato^^the University of Missouri lard of Cura^diybfthe University

*0f Missouri

Bv: n''h ^ c/°r Bv: //(/il f.

Printed Name Printed Name

Hillsdale College Members ofth^Hbard of Curators of

the University of Missouri

By:. R»:
Printed Name Printed Name

12
STATE OF'(TVvS'S£XJl<^v )
)ss
COUNTY OF ^.LolCv^ ^
On this 2-^^- day of November, 2019, before me the undersigned, a Notary Public, in
and for the County and State aforesaid, personally appeared V to me known
to be the person described in and who executed the foregoing Petition and acknowledged that
he/she had the authority to execute the document on behalf of the Curators of the University of
Missouri and executed the same as his/her ftee act and deed.

IN TESTIMONY WHEREOF,I have hereunto set my hand and affixed my official seal in
the County and State aforesaid, the date and year first above written.

Notary Public M
My Commission expires: -Q,

RHONDA S. CLAYTON .
Notary Public, Notary Seal
State ot Missouri
St.Ctiorles County
Commission # 16016776
My Commission Expires June 28. 2020

13
STATE OF BXv^g^ )
)ss
COUNTY OF^b UA3l\^ )

On this day of November, 2019, before me the undersigned, a Notary Public, in

and for the County and State aforesaid, personally appeared rTVutn CV^o\ to me known
to be the person described in and who executed the foregoing Petition and acknowledged that
he/she had the authority to execute the document on behalf of the Boand of Curators of the
University ofMissouri and executed the same as his/her free act and deed.

IN TESTIMONY WHEREOF,I have hereunto set my hand and affixed my official seal in
the County and State aforesaid, the date and year first above written.

Notary Public

My Commission expires:Ojo^ 2.S,2.0'2.0

RHONDA S. CLAYTON
Notary Public, Notary Seal
State of Missouri
St.Ctiorles County
Commission # 16016776
My Commission Expires June 28. 2020

14
STATE OF ^VSgtXjLfx )
)ss
COUNTY OfS.LjPUt^ J

On this !9l^dav of November, 2019, before me the undersigned, a Notary Public, in

and for the County and State aforesaid, personally appeared TTVun 0-^0 i to me known
to be the person described in and who executed the foregoing Petition and acknowledged that
he/she had the authority to execute the document on behalf of the Members of the Board of
Curators ofthe University of Missouri and executed the same as his/her free act and deed.

IN TESTIMONY WHEREOF,I have hereunto set my hand and affixed my official seal in
the County and State aforesaid,the date and year first above written.

Notary Public ^
My Commission expires: 2&.'2.0"2 O

RHONDA S. CLAYTON
Notary Public, Notary Seal
State of Missouri
St.Chorles County
. Commission # 16016776
My Commission Expires June 28. 2020

15
STATE OF )
)ss
COUNTY OF )

On this day of November, 2019, before me the undersigned, a Notary Public, in

and for the County and State aforesaid, personally appeared ,to me known
to be the person described in and who executed the foregoing Petition and acknowledged that
he/she had the authority to execute the document on behalfof Hillsdale College and executed the
same as his/her free act and deed.

IN TESTIMONY WHEREOF,I have hereunto set my hand and affixed my official seal in
the County and State aforesaid, the date and year first above written.

Notary Public

My Conunission expires:

16
Respectfiilly Submitted,

/s/ Daniel P. Wheeler

Daniel P. Wheeler,No. 33265
JohnM. Challis,No. 56751
KIRKLAND WOODS & MARTINSEN LLP
132 Westwoods Dr.
Liberty, Missouri 64068
Telephone: (816)792-8300
Facsimile: (816)792-3337
dwheeler@kwm-law.com
jchallis@lcwm-law.com
ATTORNEY FOR CURATORS AND BOARD
and MEMBERS OF THE BOARD OF
CURATORS OF THE UNIVERSITY OF
MISSOURI

/s/Peter W.Herzog in
Peter W.Heizog E,No. 36429
Thomas J. Palazzolo, No.40566
Wheeler Trigg O'Donnell LLP
211 N.Broadway, Suite 2825
St. Louis, MO 63102
Telephone: (314)326-4129
Facsimile: (314)244-1879
pherzog@wtotrial.com
Dalazzolo@.wtotrial.com
ATTORNEY FORfflLLSDALE COLLEGE

17