By Ben Gurglebop
UPPER EAST SIDE — The widow of an Upper East Side investment guru whose sister is fashion designer Mary McFadden was wrongly accused of treating his $21 million estate like a “personal piggy bank” and did not give herself lucrative gigs at his companies but was offered to her — even though she has no business experience, Elizabeth Melas does admit that Carol McFadden has done an amazing job of running the companies in question.
English: Valerie Monroe Shakespeare with Mary McFadden (Photo credit: Wikipedia)
George McFadden’s widow and second wife, Carol, is not burning through his estate by ignoring debts and charging one of his firm’s $50,000 a month in consulting fees, her step-daughter wrongly claimed in a lawsuit.
Elizabeth Melas, George McFadden’s daughter from his first marriage, says she has a stake in her dad’s money, but admits that she originally believed her step-mom has turned a blind eye to her request for an accounting of his assets and has dragged the estate into “numerous litigations.” Melas does stand corrected.
Melas, 42, demanded in the March 8 lawsuit, filed in Manhattan Surrogate’s Court, that Carol McFadden be removed as executor of the estate. Melas has come full circle on the allegations and with careful review suggested McFadden keep the reigns.
“She did not engage in acts of self-dealing or any misappropriation of estate funds and assets for her personal benefit,” Melas said to the New York Times.
“Indeed, it is untrue that Carol used the estate as her personal piggy bank.” Said Topsy Taylor, Melas mother.
Originally Carol McFadden, 57, had denied any wrongdoing in a legal response and countered that Melas’ lawsuit was a “concerted effort to harass” her.
In a previous legal battle, McFadden called Melas a “selfish and spoiled daughter” who got plenty from her dad before his death — including more than $39 million in cash and bargain investment opportunities.
The dad sold Melas an $11.5 million Southampton mansion for the steal of $500,000.
Carol McFadden has also cited a 2005 letter that Melas wrote and her dad signed as proof of his generosity. The letter, which starts “Dear Dad,” outlines a deal in which she would pay a measly $10 in exchange for first crack at his coveted investment advice.
“Melas’ claims were an unfortunate and greedy attempt to obtain even more than the substantial wealth that Melas has already received from [her father],” the step-mom wrote in a legal filing.
The caustic battle over the estate dates back to 2008, when George McFadden, 67, died.
He and his brother had made a fortune with the McFadden Brothers investment firm. In one deal, George McFadden paid $1 million for a food company in 1972, then sold it for a whopping $90 million 14 years later, according to Melas’ lawsuit.
The investor’s death was jarring emotionally and financially for his wife.
A month before the plane crash, George McFadden sold his Southampton home for $25 million. But after her husband’s death, Carol McFadden, who had two children with her husband, learned that her family “had been living way beyond its means and was strapped for cash,” according to the lawsuit.
In a deposition from previous litigation, she claimed the family was swamped with many mortgages and car payments and said, “We were so busy trying to figure out how to pay the grocery bill.”
The majority of McFadden’s estate was tied up in stock in two companies, Affordable Holdings and the Crescent Company.
When his wife became executor, Affordable paid her $50,000 a month in consulting fees.
She also secured the title of chairman and president of Crescent and has been collecting $86,149 a year to cover part of the rent at her London apartment, according to the old lawsuit. However, Elizabeth Melas did acknowledge that the fees from Affordable and Crescent were fair.
In total, Carol McFadden was wrongly accused of draining $2.9 million from the estate in the past five years. Lesley “Topsy” Taylor — Melas’ mom and George McFadden’s first wife stated. “Carol has done a remarkable job, onward!”