A Massachusetts beer baron has been sued by two of his sons for allegedly misappropriating $80 million of family business funds by ‘redistributing’ wealth to his other children, paying himself and his wife inflated salaries, and splurging tens of millions of dollars on art and antiques.
The allegations of misconduct made against Jerry Sheehan, 89, came in a lawsuit filed in Suffolk Superior Court by two of his sons, Tim, 62, and John, 59, a few days before Christmas.
The aggrieved brothers, who were both at one time heavily involved in operations at the family’s domestic beer distribution company Sheehan Family Cos., argue they have been handed a disproportionate share of the fortunes compared to their six siblings, who are said to be less involved.
In their 92-page complaint, Tim and John accuse their father of shifting money around to ‘level the stacks’ among the eight siblings, in addition to ‘redistributing wealth’ to both himself and his wife, Maureen.
By ‘effectively misappropriating’ company funds, the brothers say, Jerry was able to pay himself and Maureen inflated salaries, make tens of millions of dollars in personal purchases of art, antiques, and other items, and donate millions in their names to their favorite charities.
However, through a spokesperson, Jerry has hit back at his sons for their complaints, calling them ‘so ungrateful’, adding that he has given them ‘a life of almost unparalleled privilege.’
Jerry Sheehan (center), 89 has been accused of misconduct by his sons Tim (right), 62, and John, 59, in a lawsuit center over their family’s beer distribution company, Sheehan Family Cos.
The corporate headquarters for the Sheehan Family Companies at 35 Elder Avenue in Kingston, MA is pictured above
Sheehan Family Cos. is almost entirely owned by Jerry and Maureen’s eight children as a result of estate planning by the couple decades ago, the Boston Globe reported. However, Jerry still maintains control over operations.
While the suit doesn’t specify damages, the legal filing alleges that Jerry has been responsible for more than $80 million in ‘fabricated “management fees” unsupported by formalized agreements and documented only through a one-line invoice, as well as millions of dollars in interest on intercompany loans.’
The alleged actions of Jerry are the main focus of the claim, however his wife Margaret is also named as a defendant because of her role as a trustee.
The oldest of the Sheehan siblings and company director, Margaret Sheehan, 64, is also named as a defendant, as is Charles E. Clapp III, a trustee of trusts established for Margaret and her sisters Anne Landers and Susan Sheehan.
In their filing, Tim and John claim they’ve attempted to settle their outlined dispute with Jerry for a number of years, though have failed on each previous occasion.
While mediation was pending in 2018, Tim was reportedly suspended from his post running the company’s flagship distribution center on the South Shore.
The disciplinary motion allegedly came after Tim changed his legal residency to Florida, a move Jerry believed could have threatened the company’s deals in the state with Budweiser owner Anheuser-Busch, according to the lawsuit.
Tim claims he was fired the following year. John, meanwhile, remains with the business as manager of its Wisconsin wholesaling unit.
‘After years of concerted and good-faith efforts to resolve this family business dispute, Plaintiffs are forced to bring this action as a last resort to put a stop to the unlawful behavior of the family patriarch . . . who is abusing his fiduciary powers over businesses owned by his children,’ the complaint reads, as reported by the Globe.
The lawsuit says that at least $33.5 million of company funds were contributed to a charitable-giving account at Fidelity Investments from 2012 through 2018 (pictured: Jerry Sheehan presents a $100k donation to the Boys and Girls Club of Marshfield in 2010)
Tim Sheehan (left) was fired as manger of the company’s flagship distribution center in 2019 while litigation was pending on a previous dispute. John Sheehan (shown right with Jerry) remains with the business as manager of its Wisconsin wholesaling unit.
Sheehan Family Cos. is one of the largest beer distributors in the US, with 19 distribution centers in 13 states. It is one of the largest distributors of Budweiser and other Anheuser-Busch labels (file photo)
Jerry has not yet spoken publicly on the lawsuit, however a scathing statement from a spokesperson for him read: ‘Timothy’s and John’s jobs and other benefits have provided them with tens of millions more than the amounts received by their siblings, and now each have net worth well in excess of a hundred million dollars due to their father’s largesse.
‘Despite all that they have been given, and all they continue to take from the company, the sons want more, at the expense of their siblings, company employees (whose benefits they see as overly generous) and charitable causes the company supports.
‘In an attempt to get it, they have filed this ill-conceived and inaccurate lawsuit. That they did so just days before Christmas and even included their own mother as a defendant shows just how misguided their actions are.’
The oldest of the Sheehan siblings and a company director, Margaret Sheehan (above), 64, is also named as a defendant
The Sheehan family reportedly got into the beer distribution business in the Great Depression through Maureen’s father, Domero Cortelli, delivering Budweiser in Southeastern Massachusetts.
Several decades on, the rebranded Sheehan Family Cos. is now a collection of 19 regional beer distributors in 13 states, plus an importing company and a craft spirits division. While it is one of the largest distributors of Budweiser and other Anheuser-Busch labels, it’s also now heavily involved in the distribution of craft and foreign beers.
According to the lawsuit, Jerry’s early ambitions to expand the business were hampered by rules outlined Anheuser-Busch that made it difficult for a distributor in one state to operate in another, unless they lived there.
In order to persuade the Sheehan children to relocate to a different state to circumvent the issue, the family reportedly reached a ‘60/40 agreement’, in which siblings who were ‘active’ in the business – or employed full time and willing to relocate – the opportunity to buy a combined 60 percent of any out-of-state distributor the family acquired, with the remaining 40 percent available in equal shares to all eight children.
However, in a statement to the Globe, Jerry’s spokesperson denied that any such formal agreement was ever struck.
‘There was a one-time allocation of equity to [Tim and John] in several of the 19 distribution companies that diluted their siblings’ shares. The brothers still hold that greater equity,’ the statement read.
Tim and John claim in their filing that they, and their third brother Chris, were all willing to uproot their families and invest in out-of-state-distributorships, including in New York City and Wisconsin.
While Chris Sheehan didn’t join the suit, Tim and John say Jerry siphoned off company funds, in some instances at the expense of all eight siblings, and in other instances with a disproportionately unfair impact on just them.
In a statement through a spokesperson, Jerry (pictured right with Tim) confirmed he will fight the lawsuit and called his sons ‘so ungrateful’
According to the complaint, from 2015 to 2019, Jerry’s compensation totaled more than $45 million, which the brothers say he ‘unilaterally and arbitrarily’ set himself. They also claim the purported amount was far out of line with other executives in the beverage industry.
Maureen, meanwhile, reportedly took home a yearly salary in excess of $400,000 between 2011 and 2017, despite not providing ‘any professional services’ to the business during that time, the suit claims.
The brothers further claim that their parents used corporate funds to sanction eye-watering art and antiques purchases, a collection at one time valued at $30 million. They say Maureen and Jerry also spent vast sums on furniture, vintage cars, jewelry, clothing and real estate.
Additional, the lawsuit says that at least $33.5 million of company funds were contributed to a charitable-giving account at Fidelity Investments from 2012 through 2018, according to the Globe.
The account, which is separate from the Sheehan Family Foundation, then made donations in Maureen and Jerry’s names to Jerry’s ‘pet charities’, the suit claims.
Responding to the claims, an statement issued on behalf of Jerry reads: ‘Throughout his long stewardship, Jerry has always operated the companies to advance core Sheehan family values of generosity to employees and philanthropy. The two sons have a history of opposing both . . . Jerry receives no personal benefits from such decisions [to be fair to all eight children].
‘His only compensation is a salary set by independent directors based on expert input — which he then donates entirely to charity. He does not benefit personally from any of the business decisions described — often inaccurately — in the suit.’
Jerry’s spokesperson confirmed that he ‘and Maureen Sheehan will defend the litigation; their only question is why these two sons are so ungrateful for having been given a life of almost unparalleled privilege.’