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Fight for control of foundation returns to state high court


OMAHA, Neb. - The fight for control of one of Nebraska's oldest and most prestigious charitable foundations will return to the state Supreme Court on Friday for a second round of arguments. The Gilbert M. and Martha H. Hitchcock Foundation, which has some $17.2 million in assets, was established in 1943 by Martha Hitchcock, the wife of Gilbert Hitchcock, a U.S. senator and founder of the Omaha World-Herald newspaper. Two different factions of Omaha's Kountze family, which married into the Hitchcock family generations ago, have been fighting over control of the foundation since at least 2002. The case the Nebraska Supreme Court will hear Friday has to do with how well Douglas County District Judge James Gleason followed the high court's 2006 ruling in the foundation dispute.

"It's really a technical legal argument about control of a pretty important institution in the public interest and a war about who would do the best job of managing it," said attorney David Domina, who represents one of the factions in the case.

The court fight continues despite the deaths of two key foundation trustees. Denman Kountze Jr. died in 2005, and Tyler Gains died last year. In 2004, Gleason ruled in favor of one faction of the family _ trustees Neely Kountze, his wife, Mary Kountze, and Gains _ effectively giving them control of the foundation.

The other side was led by Denman Kountze Jr. _ Neely Kountze's uncle, who had served as president of the foundation since 1984. Denman Kountze's two sons, Charles and Edward, are still fighting with Domina's help. The state Supreme Court ruled in 2006 that Gleason should have never proceeded with the trial because there wasn't enough proof that the attorney general's office had been notified. State law requires the attorney general to be notified about nonprofit litigation because that office has an obligation to prevent misuse of a charity's assets.

After the Supreme Court ruling, Gleason offered the attorney general a chance to intervene. After the attorney general's office declined, Gleason made essentially the same ruling he did in 2004 based on the trial record. Domina argues that a new trial should have been held after the Supreme Court's 2006 ruling. But attorney Ed Hotz, who represents the other faction, disagrees.

"There was nothing to retry," Hotz said. "All the evidence was there."

The foundation has been operating since Gleason's 2004 ruling with Neely Kountze serving as president. The Hitchcock Foundation has given money to such entities as Columbia University, the University of Nebraska, the Nebraska Museum of Art, the Nebraska State Historical Society and American Public Television.

In addition to this State Supreme Court case, there is a separate federal lawsuit pending before the 8th Circuit U.S. Court of Appeals. That lawsuit, filed by Edward Kountze, could also determine which faction of the family will ultimately control the foundation.

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