Paul Newman's daughters sue Newman's Own Foundation, claim org has 'lost its way'

Susan Newman and Nell Newman, daughters of the late actor Paul Newman, are suing the foundation bearing their father's name over allegedly ignoring the star's wishes regarding where its money goes.

The complaint, filed Tuesday in Connecticut Superior Court, claims that part of the money the foundation brings in through products put out by Newman's Own Inc. — such as pasta sauces, salsa and popcorn — is required to go to each of the daughters' own foundations so that they can determine where their respective shares of the funds go. Following their father's death in 2008, they claim, the foundation has ignored his wishes and recently cut that amount from $400,000 per daughter to $200,000 per daughter.

"The heart of Mr. Newman’s estate planning was to keep his children involved in philanthropy, specifically by requiring Newman’s Own Foundation (NOF) to allocate a certain amount of its millions of dollars of annual donations to charities identified by his daughters," the complaint states.

The complaint goes on to say that this arrangement "was a check on Newman’s Own Foundation’s ability to stray too far from Mr. Newman’s priorities for philanthropy," as a portion would be under the daughters' control.

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"Over the years, however, Newman’s Own Foundation lost its way and strayed from its mission to preserve and honor Paul Newman’s legacy," the complaint says. "The years since Mr. Newman’s death consist of a long and consistent pattern of disregard, by those in control, of Mr. Newman’s specific intentions and direction, coupled with mismanagement, scandal, and questionable practices."

The complaint says the individuals who directed the shift away from Paul Newman's well-documented wishes are his adviser Robert Forrester – who later become CEO of Newman's Own Inc. and president of NOF – and his business manager Brian Murphy. The daughters claim that under their leadership, NOF ceased following a number of Paul Newman's desires for charitable donations and that Forrester and Murphy declined to inform the daughters that they were entitled to have a say in operations through a trustee of their choosing.

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The lawsuit also claims that Paul Newman had instructed NOF to pay each daughter up to $100,000 for their work for their respective foundations and that NOF later reduced their roles and eliminated all compensation.

Despite a number of changes to its giving practices, the complaint states, NOF continued to give $400,000 to each daughter's foundation up until 2020. Since then, the daughters claim, that amount has been cut in half.

The lawsuit claims that based on Paul Newman's original setup of NOF, the foundation is only allowed to collect royalty payments from Newman's Own Inc. for the use of Newman's likeness and other intellectual property rights on the condition that NOF gives $400,000 each year to each daughter's foundation.

The daughters are not seeking any personal compensation in the lawsuit, but they are looking for $1.6 million that they will distribute to charities, plus the continuation of the $400,000 annual distributions. 

A spokesperson for NOF said in a statement to Fox Business that the NOF board's "philanthropic giving decisions vary each year and the importance of our mission requires us to make the best use of our finite resources."

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"The Foundation is governed by a board of directors that must adhere to regulations applicable to 501(c)(3) organizations. Best practices surrounding philanthropic organizations do not allow for the establishment of perpetual funding allotments for anyone, including Nell and Susan Newman," the statement continued. "A meritless lawsuit based on this faulty wish would only divert money away from those who benefit from Paul Newman’s generosity. While we expect to continue to solicit Newman family recommendations for worthy organizations, our funding decisions are made each year and will continue to reflect the clear aim of Paul Newman and our responsibility to the best practices governing private foundations."