Beneficiary Battle

A Florida widow claims she is being “squeezed” by Yeshiva University in a battle over the estate of her late husband, whose aircraft company went bankrupt after he died.
YU is one of three charitable beneficiaries named in the will of Gabriel Levine, who died in 1996 with assets estimated at about $11 million.
By the time the will was executed, however, the value of his estate had decreased due to a court battle with a son from a previous marriage who was not named in the will, as well as costs associated with the sale of real estate holdings. Levine’s Barridon Aerospace, which manufactured replacement parts for aircraft engines, struggled for five years before collapsing in 2001.
The widow, Blanche Rosenzweig Levine, 89, was to receive interest proceeds from $1.5 million in cash and bonds for the rest of her life. But after negotiations with other beneficiaries, she agreed to receive only the interest on about $700,000, mostly from bonds, which would be sold after her death to benefit the three charitable beneficiaries.
YU has moved to deny her that income, estimated at between $30,000 and $40,000 annually at current interest rates, the widow claims.
“I am very aggravated,” said Levine, formerly of Brooklyn, who now lives in Bal Harbor, Fla., in a phone interview. “It should never have come to this situation. They are squeezing me dry. They want to take away the only income I am left with.”
The legal maneuvering comes at a time when YU has benefited from the second largest bequest in its history. It recently received $36 million, which grew from a 1995 gift of $22 million from Anne Scheiber, a retired civil servant, while her estate was in probate. The money will provide scholarships for students at YU’s Stern College for Women and the Albert Einstein Medical School.
Levine’s will initially promised $1 million each to Toras Emes in Brooklyn and Bar Ilan University in Israel, with YU as a residual beneficiary entitled to whatever was left after the other funds were disbursed.
Under a settlement agreement worked out by lawyers from all sides, Toras Emes and Bar Ilan were to receive about $500,000 while YU was to receive an undisclosed sum now — estimated in the low six figures — as well as income from the bonds after Blanche Levine’s death.
YU initially agreed to the settlement but declined later, seeking a higher and more immediate payoff, according to Levine and others familiar with the case.
“We made a settlement and they reneged on the entire settlement,” said Levine. “They want to take the few dollars I have.”
A YU spokesman declined to specify how much the university was seeking, or to explain its position, saying “ongoing discussions are taking place among the various parties, including YU, to try to reach an equitable resolution to this issue.”
A source familiar with the case said the out-of-court settlement would have been favorable to YU because a probate judge ordinarily would not grant a residual beneficiary any money until the will was fully executed.
Levine’s first husband, Joseph Rosenzweig, was a New York philanthropist, and her daughter, Judith Schwartz, chaired a YU women’s fund-raising committee during the 1980s.
Levine said she has tried to discuss the matter with university president Dr. Norman Lamm, but he has “refused to talk to me.”
The case points up the potential for strife between heirs and nonprofit beneficiaries as the economy falters, sometimes leaving a smaller share of the pie than was envisioned when a will is drafted under more profligate circumstances.
Nationwide, bequests to nonprofits in 2001 declined by 4.5 percent from the previous year. The estimated $16.3 billion last year comprises 7.7 percent of total charitable giving, according to a survey by the monitoring group Giving USA.
Susan Palmer, editor of the Chronicle of Philanthropy, said the portfolios of major donors would likely suffer this year from recent turmoil in the technology industry. “If anyone is counting on Enron money, it’s definitely going to be problematic,” said Palmer.
But she said it was rare for a beneficiary to wind up in court with other heirs. “Most of the time people don’t count on the money until the will has gone through probate,” said Palmer.
In the case of Barridon Aerospace, Levine had asked his wife’s son, Larry Rosenzweig, to take over the company he founded in 1934 in a desperate attempt to stem losses in the late 1990s.
The company’s facility in Hartford, Conn., was too antiquated to deal with the production demands of its largest client, Pratt-Whitney, a manufacturer of jet engines, which terminated its contract with Barridon shortly after Gabriel Levine’s death.
Larry Rosenzweig managed to secure another contact with Pratt-Whitney, but Barridon again could not meet demands, leading to the company’s demise last year.
Levine said that after her husband’s death, YU officials pressed her son to try to restore the company to profitability so that the original terms of the will could be honored.
“They encouraged him to go ahead with it,” said Levine.
Levine said she believes Yeshiva University “is a good institution,” but faults “the people who are running it.”
“They said I took their money, but I haven’t got the money,” she said. “The money was lost.”