The 2010 resignation of third-generation member Kenneth Irving from Irving Oil Ltd., a family empire based in the Canadian province of New Brunswick, has “exacerbated a schism” within the family,
a
Wall Street Journal
article said.
The secretive family is the largest landowner in Maine and a supplier of nearly a fifth of U.S. imports of oil products, the
Journal
report said. The family's assets include holdings in oil, lumber and ship building; they also publish daily and weekly newspapers in New Brunswick.
The report noted that feuds within the family “have broken the once-monolithic Irving family business into separate groups now operating on their own.” The empire was built on an unwritten rule that Irving companies use other Irving companies as their suppliers, the
Journal
article said.
The second-generation business leaders were James (J.K.) Irving, Arthur Irving Sr. (Kenneth's father) and John (Jack) Irving. J.K. ran J.D. Irving Ltd., a conglomerate with a diverse array of holdings. Arthur Sr. ran the oil business, and Jack ran a radio station and a steel fabrication and construction company.
When their father, founder K.C. Irving died in 1992, the assets were divided along the lines of business his three sons had been running. “[A]s the third and fourth generation moved into the businesses, spats arose over which cousins should take the reins of various business parts,” the
Journal
article said. The Irving companies began using vendors that offered the most competitive prices instead of other Irving businesses.
In 2008, Arthur Sr., his two sons and his younger brother Jack left the board of J.K.'s conglomerate. J.K. and his family left the hoards of Arthur's oil company and Jack's steel and construction companies, the article said.
Although Arthur Sr. turned over the oil company to Kenneth in 2008, he returned during the economic downturn in 2009 and began to get involved in decision making, according to the report.
At about the same time, an intrafamily legal battle began. Kenneth challenged the terms of the family trust in a Bermuda court. He argued that he had contributed more value to the trust, which gave his siblings equal funds.
Kenneth took a leave of absence from the family business in 2010 and a month later told his father he wasn't coming back; they haven't spoken since, the article said. Kenneth won a “preferential payment” in his court case, but in 2012 his father won an injunction stopping Kenneth from forcing the trustee to disclose information about the trust's assets. Kenneth had offered to drop his request for disclosures if Irving Oil had a retirement dinner for him and if he could attend a family event with his father, according to the
Journal
report.
Jack Irving died in early 2010; his surviving brothers rarely communicate with each other, and their businesses are completely separate, the
Journal
article said.
Since leaving his position as CEO of Irving Oil, Kenneth Irving “is re-emerging as a tech entrepreneur,” the
Journal
article said. His departure from the family business stemmed partly from his desire to follow in the footsteps of his grandfather and namesake, K.C. Irving, who was known as an innovator, the article said. (Source:
Wall Street Journal
, Aug. 5, 2014.)
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