Chancery Court Removes Trustees from Sex-abuse Victim's Fund

Delaware Law Weekly
August 1, 2014

http://www.delawarelawweekly.com/home/id=1202665627357/Chancery-Court-Removes-Trustees-From-SexAbuse-Victims-Fund?mcode=1202617074375&curindex=0&slreturn=20140702072205

A Catholic priest sexual-abuse victim’s relatives must be removed from overseeing a trust created to manage his settlement money after they spent most of the $345,676 to purchase themselves cars, jewelry and home renovations, the Delaware Court of Chancery has ruled.

Duane C. Hardy received a large cash settlement as a member of a class action lawsuit that filed sexual-abuse charges against the Catholic Diocese of Wilmington. He suffers from alcoholism, schizophrenia and bipolar disorder and told his attorney at the time that he thought others would better manage his settlement proceeds, according to court documents. Hardy’s older sister, Sherry Hardy, and her adult son, Michael Hardy, were appointed as the co-trustees.

Under the trust agreement, Sherry and Michael Hardy have “sole and uncontrolled discretion” to distribute or apply the funds “for the care, comfort, welfare, education or training” of Duane Hardy.

Duane Hardy received the initial payment of his proceeds in October 2011 and he split the amounts into two separate accounts at Wilmington Savings Fund Society. The two deposits totaled $9,000 less than the settlement’s total of $345,676. Roughly one week later, the first significant withdrawals from the trust accounts occurred. A $15,000 check written out to cash and a $21,700 debit withdrawal four days later were used to provide various gifts to Duane Hardy’s family and friends, according to court documents. However, Hardy denies that he authorized the withdrawals and contended that he only approved two gift payments totaling $3,000.