U.S. Ambassador to France Pamela Harriman and the heirs of her late husband, W. Averell Harriman, have agreed to settle an acrimonious 15-month-old legal battle in which the heirs accused Pamela Harriman of squandering as much as $41 million of the family fortune through bad investments and self-dealing.
Harriman's descendants, along with Pamela Harriman, will now jointly pursue claims against Washington lawyers Clark M. Clifford and Paul C. Warnke, as well as other advisers, according to a statement from Harriman's lawyer.
Pamela Digby Churchill Harriman became the principal beneficiary and trustee of one of America's great fortunes, the bulk of a $100 million legacy of the Harriman railroad dynasty, when her husband died in 1986. But much of the money that was handled by trustees Harriman, Clifford and Warnke was held in trust for Averell Harriman's children by his first wife, Kitty Harriman. Averell and Pamela Harriman, who married when he was 79 and she was 51, had no children of their own.
A brief statement from one of Pamela Harriman's New York lawyers said the parties "have satisfactorily resolved all the pending litigation between them through a mutual and reciprocal redistribution of family assets."
Although the statement did not say how much money would be redistributed, it did say that it would "correct inequities resulting from losses incurred on certain investments made on the recommendation of professional advisers selected by Governor Harriman before his death."
Charles Ames, an attorney who represents the Harriman heirs and is married to a Harriman granddaughter, said the heirs are "hopeful that, with Mrs. Harriman's support and assistance, we will soon achieve a satisfactory resolution with the parties responsible for the family's loss."
That statement is not good news for the professional advisers, who included Clifford and Warnke as well as New York lawyer Edmund J. Burns and investment adviser William Rich III. Before he died, Averell Harriman personally chose them to administer his estate and invest his money. All of the advisers have denied any wrongdoing.
Pamela Harriman has contended throughout the bitter legal fight that she relied totally on the advice of the lawyers and investment advisers, while the heirs have contended that she had to have known of their disastrous results, which included a loss of more than $20 million in a New Jersey resort that had been a Playboy Club. In addition, the heirs said, she lent herself millions of dollars in funds that were not hers.
In June, Harriman was close to a settlement that would have given the heirs $20 million, but would have required her to sell virtually all her assets, including artworks, her Georgetown home and other properties. But at the 11th hour, Harriman balked at signing the agreement, saying she needed to maintain a net worth of at least $10 million and an annual income of $700,000 to $800,000.
Harriman refused to sign that agreement, according to sources, after Clifford, a close friend of her late husband's and the attorney who drew up his will, would not agree to contribute $3 million to the settlement.
In preparation for that tentative settlement, Harriman had some of her prize possessions -- a Picasso, a Renoir and a Matisse -- auctioned at Christie's in May for about $17 million. But after the first settlement failed, both sides began playing legal hardball.
Pamela Harriman sued Clifford and the other advisers, while the heirs were joined in their suit against Harriman by the W. Averell and Pamela C. Harriman Foundation, a New York organization that was set up before Averell Harriman's death to dispense money to educational projects. The heirs also sought to have Pamela Harriman removed as executor and sole trustee of her late husband's estate.
Pamela Harriman previously had been married to Randolph Churchill, son of Winston Churchill, and to theatrical producer Leland Hayward.