Tag: Brown Family

Documents reveal a legal latticework shielding the Brown family’s $6 billion whiskey fortune

By Jim Hopkins
Boulevard Publisher

When Brown-Forman stockholders gathered in July at the whiskey giant’s Georgian Revival headquarters west of downtown, the outcome of a crucial vote — re-electing 12 directors to the governing board — was anything but a surprise.

This has been the founding Brown family’s company for nearly 150 years. Six of the directors were Browns, including board Chairman George Garvin Brown IV — a great-great grandson of the founder — and the rest were unquestionably family loyalists.

Stockholders outside the family knew what Brown-Forman has disclosed for years in an annual statement soliciting their votes: 13 individual Browns and family groups hold 67% of all the voting shares in “a variety of family trusts and entities, with multiple family members often sharing voting control and investment power.”

Much less has been known about the scope of those entities, leaving more than 5,600 other stockholders in the dark about exactly how the Browns divvy up nearly $6 billion in shares among a core group of relatives.

George Garvin Brown
Founder Brown.

But now, documents filed by the Browns with the Securities and Exchange Commission detail how complex their ownership has grown since the pharmaceuticals salesman George Garvin Brown founded the company in 1870. They shed light on how the Browns have deployed extensive trust accounts, business partnerships, and other legal vehicles to pass down Brown-Forman stock through six generations. That’s an exceptional legacy in American business: Just 12% of family-owned companies survive into the third generation, and a slim 3% survive to the fourth and beyond.

The documents also point to a network of boutique consulting firms and other white-shoe professionals advising the city’s wealthiest families on everything from investments to taxes and charitable giving, hiring housekeepers and gardeners — even organizing vacation travel and family gatherings. Paid tens of thousands of dollars a year in fees, the firms are the backbone of a larger, multibillion-dollar economy serving the area’s uber-rich.

george-garvin-brown-to-laura-frazier-contact-sheet-450
Clockwise from top left: Garvin Brown IV, Campbell Brown, Christy Brown, Laura Frazier, Sandra Frazier and Mac Brown.

The documents were filed over the past 18 months by Continue reading “Documents reveal a legal latticework shielding the Brown family’s $6 billion whiskey fortune”

Follow the money: A trail of footnotes and government documents leads to Insider Louisville’s front door

By Jim Hopkins
Boulevard Publisher

In business journalism, some of the most interesting news shows up in fine-print footnotes in documents companies file with government agencies. Hospital and nursing giant Kindred Healthcare is great example. Last spring in a statement to stockholders, it disclosed two special payments to top executives: $6 million to then-executive vice chairman Paul Diaz in connection with his leaving the CEO’s job, and $250,000 to Chief Financial Officer Steven Farberto help him escape a high-profile dispute with a Glenview neighbor. But to uncover that, you had to follow three different footnotes on a table showing how much they got paid overall.

Insider Louisville logoThis leads me to another footnote, of sorts — one that appeared on a story today at Insider Louisville, the online news site launched in 2010, and to a document I’ve run across at the Securities and Exchange Commission. Together, they open a window on who’s investing in Louisville’s news media at a time when the once-dominant Courier-Journal has been losing influence amid steep staff cutbacks, shifting the balance of power in Kentucky’s biggest city. They underscore the importance of news outlets everywhere telling readers who’s behind the scenes, and about any conflicts of interest owners may pose for their publication. (I’ve got disclosures of my own.)

This morning, at the bottom of a long story about the Humana Foundation, Insider Louisville editors added this disclosure: “One of the five directors of the Humana Foundation is David A. Jones Jr., an investor of Insider Louisville.”

David A. Jones Jr.
Jones

Jones is one of Louisville’s more influential residents. He’s on the board of directors of Humana itself, and his father, David A. Jones Sr., is a co-founder of the insurance giant. Jones Jr. is a partner at Chrysalis Ventures, the Louisville venture-capital firm he founded in 1993, and he’s chairman of the elected seven-person board overseeing the Jefferson County Public Schools. (Here’s Chrysalis’s portfolio of company investments; it doesn’t show Insider Louisville, which suggests this was a personal investment.)

Tom Cottingham
Cottingham

To be sure, close readers of Insider Louisville have known Jones was an investor for several years. In August 2014, owner Tom Cottingham told readers he’d brought in three new minority investors he knew from a prior venture: Jones; Doug Cobb, the former Greater Louisville Inc. CEO, and Jon Pyles, now the site’s vice president of marketing. The story — which carried only a “staff” byline — didn’t say how much they’d invested, nor the exact size of their stake. Cottingham said he remained the majority holder.

Douglas Cobb
Cobb

Now, though, an SEC document filed in April offers more clues about the publication’s investors, whom we learned this summer include a prominent heiress to the glittering Brown-Forman whiskey fortune. I can’t find any mention of the regulatory filing on Insider Louisville’s website, nor in any other media outlet in Louisville. My readers may well correct me after I publish this post; in any case, this is certainly the first time I’m writing about it.

The April 12 document shows that Insider Louisville LLC raised $975,000 from 12 investors in a $1.5 million stock offering that drew the first investment March 31. It didn’t identify the investors by name, however, and it didn’t say how big their stakes were. The first $450,000 was to pay down an undisclosed amount of debt, according to the document; anything left over would go to any of its directors: Jones, Cottingham, and a third named Jamie Wilson. (Who’s Wilson? I haven’t figured that out; maybe one of my readers knows.)

Minimum investment: $25K

Continue reading “Follow the money: A trail of footnotes and government documents leads to Insider Louisville’s front door”

The Speed Museum’s new tax return reveals CEO d’Humières’s annual pay ($300K), and a larger window on non-profit finances

By Jim Hopkins
Boulevard Publisher

The Speed Museum is paying CEO Ghislain d’Humières more than $300,000 a year, according to its latest IRS tax return, the first public disclosure of the annual compensation paid to the man hired to lead one of Louisville’s preeminent cultural institutions, after a top-to-bottom renovation completed this year.

Ghislain dhumieres
D’Humieres

D’Humières joined the museum in September 2013 to help oversee the $60 million renovation already underway; it was finished with its reopening in March after being closed more than three years. He came from the Fred Jones Jr. Museum of Art at the University of Oklahoma, where he also was the chief executive.

The tax return says he was paid $290,553 in salary and $18,105 in medical and retirement benefits to run the 91-year-old institution and next year’s $8.3 million budget.

D’Humières replaced Charles Venable, who in October 2012 left for the top job at the Indianapolis Museum of Art. He led the Speed for five years, and was paid $241,834 in salary and $19,250 in benefits during his last year there.

IRS tax returns filed by non-profits such as the Speed provide the fullest annual public accounting of their finances, including spending on payroll, marketing and other overhead as well as revenue from donations and investment income. The Speed’s is especially noteworthy because it’s one of the city’s most high-profile arts organizations, now under d’Humières.

Comparable pay elusive

A native of France, he holds a DEA in History and License of Art History from the University of Paris I Pantheon Sorbonne, and a Master of History from the University of Paris X Nanterre.

It’s difficult to find comparable compensation for Louisville executives in his position, partly because of his unusual academic credentials, but also because IRS tax returns often lag among the city’s handful of non-profits devoted to the arts.

Actors Theatre‘s highest-paid employee, Continue reading “The Speed Museum’s new tax return reveals CEO d’Humières’s annual pay ($300K), and a larger window on non-profit finances”

Slime time: In the genteel world of old-money philanthropy, pizza king Schnatter is busting loose

By Jim Hopkins
Boulevard Publisher

When Tom Jurich chases the money John Schnatter gives to charity every year, it’s the ever-prowling cats that pose competition.

No — not those ones. I’m referring to the snow leopard and other big cats at Louisville Zoo, just five miles from Papa John’s Cardinal Stadium, the University of Louisville colossus about to undergo a $55 million renovation that athletics director Jurich wants done in just two years.

Schnatter, 54, loves U of L. He’s donated more than $20 million to the 22,000-student school over the past decade, winning naming rights for his Louisville-based pizza chain for decades to come. (And Schnatter’s a Ball State graduate, to boot.)

Papa John's logoBut he also likes other charities — especially the zoo, according to the most recent IRS tax returns for his John H. Schnatter Family Foundation, which filed its 2015 return only last week. The returns show the foundation gave $111,000 to the zoo in 2012-2015; only one other recipient — U of L — got more, among the dozens of charities Schnatter and his wife Annette support. And that was on top of $1.1 million they donated to the zoo in 2008. To be sure, the zoo was just barely ahead of No. 3 on the foundation’s gift list (keep reading).

The returns offer an inside look at how one of the city’s richest couples — we’re talking $800 million — positions themselves in a pecking order where the right kind of philanthropy is the ticket to top-drawer society. This much is clear: the Schnatters don’t give a flying fig about old-money Louisville. They’re passing on virtually all the usual suspects: the Speed Museum, Actors Theatre, Kentucky Opera, the Fund for the Arts — cultural war horses favored by more established families like the Browns and their 150-year-old whiskey fortune, or the Binghams and their faded media empire from 1918.

Instead, the Schnatters devoted their relatively modest $1.9 million to 86 charities over the four years I examined, focused heavily on helping children and veterans; animal welfare and — crucially, for anxious development officers — advancing John Schnatter’s growing interest in free enterprise and limited government.

But he’s never been old money, anyway.

1980s: bustin’ out

After graduating from Ball State University in 1983, Schnatter started Papa John’s in a broom closet at his father’s tavern, Mike’s Lounge, which he famously saved from ruin with $2,800 he got selling his prized 1972 Camaro. Nearly 32 years and many millions of pies later, he stars in his own TV commercials blanketing the air, proving he’s not above getting dirty to make a sale — literally. In a Sony Pictures marketing tie-in this summer, he played a slimed Ghostbuster pizza delivery guy; that’s a still photo, top of page. (Can you imagine Brown-Forman Chairman George Garvin Brown IV dressed as a dancing mint julep for an Old Forester spot? Neither can I.)

Tom Jurich
Jurich

No matter. Schnatter’s laughing all the way  to the bank. Today, Papa John’s has more than 4,700 restaurants in 38 countries and territories. Its 22,000 employees include 750 in Louisville. And his stake in the $2.8 billion behemoth just soared past $800 million for the first time. That’s a lot of loot that’s arrived relatively fast. On a split-adjusted basis, Papa John’s stock has increased six-fold in the past five years alone. The question over at U of L: How much of that will Jurich wrangle for his $55 million stadium project? Continue reading “Slime time: In the genteel world of old-money philanthropy, pizza king Schnatter is busting loose”

Sunday at 2 p.m. at the Speed Cinema: that charming French classic ‘The Red Balloon.’ (And it’s free!)

For its Global Speed program highlighting French culture, the museum is showing one of the most beloved children’s films of all time, 1956’s “The Red Balloon.” The Speed says: “What seems like only the story of a young boy and his balloon reveals itself to possess strong religious subtext as the boy fights to save his toy from danger.” Directed by Albert Lamorisse. 16-mm, 34 minutes.

Playing Sunday at 2 p.m., and every Sunday through Sept. 25. Check out the trailer:

Admission is free as part of the Owsley Sunday program. The free Sunday admission series through March 2021 is named in honor of the late Brown-Forman CEO Owsley Brown II.

Speed Art Museum logoThe 142-seat movie theater is part of the newly renovated museum’s expansion. It’s equipped with state-of-the-art technology, including 16-mm, 35-mm and DCI-compliant 4K digital projection systems.

‘The bottom line is, we’re a little bit ahead of our time. To me, the big shame is when you don’t dream big’

Greg Fischer
Fischer

That’s Louisville Mayor Greg Fischer, speaking to The Courier-Journal today about the unexpected failure of West Louisville FoodPort, which developers at Seed Capital Kentucky announced yesterday.

The Brown family donated $382,000 to the project since 2012, making the project’s collapse a rare defeat for the founding family of whiskey giant Brown-Forman.

Editor’s note: An earlier version of this post misattributed the quote to philanthropist Stephen Reiley, co-founder of Seed Capital.