To read about the feud between two generations of one of the Atlanta-based Rollins family is at one level engrossing and at another tragic. The closer you are to the family, the more tragic it becomes.
As a recent Forbes story about the family feud said, it is “one of the nastiest intergenerational battles ever to take place among members of The Forbes 400”.
The family — or at least parts of it — own Rollins Inc, a holding group that controls a number of pest-control companies including one of America’s biggest, Orkin. The listed bit of the business has a market capitalization of around $4bn on revenues of $1.3bn.
Two-second generation brothers — Gary and Randal — are chief executive and chairman of Rollins respectively. The brothers also control RPC, an oil and gas service company involved in fracking, which is also worth billions. The family is said to be worth $7.8 billion.
That’s a lot of money for the third generation to get their hands on. And this is at the heart of the family’s problem: the passing of power and wealth onto the next generation. An almost pathological fear of the third generation squandering the family fortune has evolved among the first and second generation.
It all started with O Wayne Rollins, the man who build the fortune, and Gary’s father, who set up restrictive trusts for his grandchildren, only paying out certain amounts at certain times. The trusts were well intentioned.
Since the death of Wayne, Gary oversees the trusts, now worth billions. They’ve also been altered to ensure payouts are only granted if certain criteria are met by members of the third generation. One is that they must be engaged in “meaningful pursuits” if they are to get their money.
Ten years later, Gary and Randall decided to revisit the eligibility requirements of the trust and create another layer of restrictions. They set up the Rollins Perpetual Management Trust, which enabled the two brothers to hire private investigators to check on the progress of their children, and to investigate things like medical records and drug tests.
This was too much for Gary’s children and they have hired lawyers to challenge the legitimacy of the trusts and their control. Gary’s son Glen, who at one stage appeared to be the likely successor to his father’s position at Rollins, is leading the charge.
The case is no doubt very complicated and can be interpreted in many different ways, depending, of course, where you sit in the family, or how you’re connected to it. The court case involving the trusts and control of them starts next year — so no doubt more juicy details about the case will emerge soon.
Beyond the fact that the Rollins feud makes a good read, can family businesses learn from their problems?
One thing is for sure is that family businesses should be careful when listening to consultants about implementing plans. Yes, things like succession plans and family constitutions can make sense, and in many cases do.
But when Wayne Rollins got advice to set up trusts for his grandchildren he probably thought that advice was excellent and that it would help perpetuate the business he’d built and preserve the wealth for many generations.
Succession or next-gen plans and family constitutions might make little sense for family businesses where there is a dysfunctional culture at the heart of the family. Indeed, they can make matters worse.