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A family battle over the vast holdings of late Louisville businessman Al. J. Schneider – who developed the Galt House Hotel and other well-known downtown towers – is playing out in court as those who want to sell try to move forward before a May deadline.

Evidence of the previously private probate court dispute surfaced recently in a rash of court documents filed primarily on behalf of four surviving Schneider daughters: Mary J. Moseley, Dawn Hitron, Christe Coe and Nancy O’Hearn. The disclosure of the disagreements also followed reports that the Al J. Schneider Co. intends to sell its flagship property – the 1,300-room Galt House Hotel – to the Northern Kentucky-based hotel chain, Columbia Sussex.

Coe and O’Hearn asked a judge last week to strip managing power from Moseley, who is president and CEO of the Al J. Schneider Co., as well as from Hitron and two other co-trustees of the Schneider trust, which currently holds all voting shares in the company. Michael Mountjoy, a CPA, and Joseph Mittel, former general manager of the Galt House, are also trustees. Coe is the fifth trustee.

Sisters Coe and O’Hearn argue that four of the five co-trustees of the Schneider trust want to “hastily and recklessly” liquidate real estate worth hundreds of millions of dollars.

The two state in recently unsealed documents filed in Jefferson District Court that the four co-trustees want to sell before the trust expires on May 31, after which the company stock is to be divided among dozens of beneficiaries. The two sisters argue that a potential sale would not be in the best interest of those beneficiaries, the majority of whom they said are against a sale.

Coe and O’Hearn also successfully got a restraining order against the four co-trustees to prevent them from selling anything included in the trust. Jefferson District Court Judge David Holton signed that order Monday, which is in effect through May 31.

The Al J. Schneider Co. argued in court documents the following day that Holton lacked jurisdiction to do so. In a Tuesday court motion asking the judge to strike the restraining order, attorneys for the Al J. Schneider Company outlined a history of the trust and recent attempts to liquidate.

Last spring, the trustees of the Schneider Co. agreed that “the market for hotel sales was at its historic peak and would likely deteriorate with anticipated changes in market conditions,” according to the motion.

In August a liquidation plan was approved for the Schneider Co., but Coe did not vote on the matter. Trust management is controlled by a majority vote, court documents note.

In October an offer was made on two Schneider properties. The offer, the company said, was well above the appraised properties’ value and would allow it to pay off debts, retain ownership of its office buildings and provide a “significant cash flow.”

The company has contended that O’Hearn and Coe are seeking to hold a potential sale hostage over their concerns that the sale price is too low and that they wouldn’t receive enough money.

Coe and O’Hearn have disputed the value of the potential sale in court filings, saying a $135 million offer for the Galt House was an unfavorable amount.

Late last week, the case spilled into Jefferson Circuit Court when the group of four co-trustees filed a petition asking Judge Mary Shaw to affirm their right to manage the Schneider Co. and declare Holton’s rulings void, as they argue Shaw now has jurisdiction over the matter. That filing was in response to a March 9 filing by Coe and O’Hearn that sought to have the four co-trustees removed.

The group filed a memorandum in circuit court Wednesday, arguing they have kept beneficiaries informed about a potential sale and even shared with them a draft purchase agreement in December 2015.

The Schneider Co. recently disclosed that it is considering trying to unload its two large downtown office towers — Waterfront Plaza at Third and Main streets and One Riverfront Plaza at Fourth and Main.

The Schneider Co. is also a minority partner in the Kentucky Kingdom amusement park at the Kentucky Exposition Center. Ed Hart, the principal executive in the park, would say only that the Schneider Co. remains a minority stockholder in the facility.

The company also has a minority share of the recently opened Embassy Suites hotel in downtown Louisville. Other Schneider property includes the large Crowne Plaza hotel near Louisville International Airport.

And the Schneider organization recently sold a large medical office building it owned on Eastern Parkway.

Several family members and their attorneys declined to comment on the dispute Wednesday. But Mary Moseley, president of the Al J. Schneider Co. and a daughter of Schneider, who died in 2001, released a statement that said:

“There is a difference of opinion regarding the direction for the Al J. Schneider Co. The disparities will get resolved. It is business as usual for all of our entities.”

Lawyer Amy Cubbage, who represents sisters Moseley and Hitron, as well as trustees Mountjoy and Mittel, declined comment on the internal dispute.

Attorney Jeff McKenzie, who represents other Schneider daughters, couldn’t be reached for comment.

Reporter Matthew Glowicki can be reached at 502-582-4989 or mglowicki@courier-journal.com. Reporter Sheldon S. Shafer can be reached at 502-582-7089. Follow him on Twitter at @sheldonshafer. 

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