Several months later, Seagull made an offer of $30 million for the utility company and the pipeline. Entex, the Morans say, was an undisclosed partner in the offer, with its eyes on the utility.
V&E asked to represent the estate and offered a disclosure letter mentioning that the firm also represented Seagull, Pat Moran says. But the Morans say the firm never disclosed that managing partner Attwell was on the Seagull board, owned 20,000 shares of stock in Seagull valued at $600,000 and had actually voted to submit Seagull's bid for the Moran companies. In addition, three other members of the Seagull board also sat on the boards of First City Bank or First City Bancorporation. John McDonough and First City representatives, two-thirds of the estate's executors, moved forward with the sale.
Pat Moran then sued his co-executors to stop the sale; they countersued to force the sale on a 2-to-1 vote.
Today, Attwell says that under then-acceptable legal standards, there was nothing wrong with his having an interest in a company seeking to buy assets of the estate, since he was not directly involved in the representation of the estate. Moreover, Attwell says, he did not know the details of the Seagull offer when he voted to approve its bid and thereafter did not participate in any deliberations on the purchase of the Moran companies. Additionally, he says a letter was sent to the estate beneficiaries during the recapitalization of First City that disclosed his presence on the Seagull board.
"If anybody had ever asked me, are you a director of Seagull, own stock in Seagull, serve on committees, I would have said, 'Certainly,' and give them the particulars in all respects."
Pat Moran dismisses that argument as belatedly self-justifying.
"Essentially, they're saying, 'This is a part of the public record. That Attwell was on the board and he owned these shares.' Well, yeah it is. It is a matter of public record. Guess where? The SEC in Washington," he says. "You're supposed to run an asset check on your lawyer? It is self-dealing for a lawyer to participate as an officer or shareholder of an entity that is buying assets from that beneficiary's estate."
Pat Moran's lawsuit against his co-executors and their countersuit ended in a mid-trial settlement in 1990. Under the deal, he, McDonough and First City resigned as executors, River Oaks Bank became the estate administrator, and First City paid an undisclosed amount to the Moran estate. The executors released each other and their individual lawyers from future claims, but Vinson & Elkins was not released by anyone. Later in the year, Entex finally bought Moran Utilities for $15.2 million -- some $8.4 million more than its original offer. The pipeline company, Morgas, was sold for $21.5 million to KSC Energies, with limited family participation. After their grandfather's estate was settled, the Morans say, the employee pension funds he had mandated had lost half of their value as a result of mismanagement in the eighties.
The Morans then took their battle to another front, with Vinson & Elkins as the target. Pat Moran had fallen seriously ill with a blood clot in a lung in early 1990, forcing him to take a back seat to Ann in the fight. He assigned his interest in any future claims against the law firm to his sister, a move that allowed Ann to discover a natural calling as a crusader against perceived injustice. She says she made the decision to go after the law firm after consulting with a Boston probate lawyer who was appalled at V&E's apparent conflicts of interest.
"Part of the reason that I felt I had to do it myself, the reason I just could not let it go, was I was beginning to realize this was not an isolated incident, that basically the way they violated this family and violated everything my grandfather wanted to have occur, destroyed the employees' trust and their retirement plan, was a pattern.
"I thought, 'This is something nobody else can do. And if I let it go, I've let an opportunity go to live out something I believed in.' "
Ann began collecting assignments of the rights to sue the law firm from other estate beneficiaries. Eventually, she had all major parties except sister Susan and her husband, John McDonough. In their search for lawyers to press their claims against V&E, the Moran beneficiaries were advised that it would be best to go out of town, and they settled on Austin's Broadus Spivey and his firm of Spivey, Grigg, Kelly & Knisely.
It didn't take Spivey long to warm to his task. "It was reprehensible," says the attorney of V&E's conduct in representing the Moran estate. "It was unforgivable and unacceptable."