Tax Fight Reveals Murphy's Philosophy on Wealth

by Mark Friedman  on Monday, Sep. 27, 2010 12:00 am  

"Charles was a big-picture guy," he said. "He had the ability to see over the horizon and think strategically. He tried to surround himself with what he considered the best people and give them sufficient rope and scope to get their job done.

"He was not a detail guy," Madison Murphy said. "Administrative details were not his forte in the least."

 

Children's Gifts

Over the years, Charles Murphy Jr. showered his four children - Michael, now 62, Martha, 58, Charles "Chip" III, 57, and Madison, 52 - and his grandchildren with gifts that included shares of stock in each of the three companies he developed. He considered the stock in Murphy Oil, Deltic and First United Bancshares to be the core family assets, Madison Murphy said during the trial.

"They were industries and businesses that he ... had operated either in management or board capacities," Madison Murphy said. "We viewed those as long-term holdings."

In the 1980s and 1990s, Charles Murphy Jr. began to relinquish control of his companies to the next generation of the family.

Madison succeeded his father as chairman of the board of Murphy Oil, and he also served on the boards of Deltic and First United. Claiborne Deming, Charles Murphy Jr.'s nephew, became Murphy Oil's CEO in 1994 and held that job until the end of 2008. David Wood is currently Murphy's CEO.

Charles Murphy Jr. had hoped that his children would keep the family's "legacy assets" and grow them by participating in the management of his companies, Porter said in a brief filed in the case.

Martha and Madison didn't touch the shares of stock their father had given them, but that wasn't the case for their brothers.

"Because they had other interests, Mike and Chip had invaded trust principal, pledged trust assets as collateral for debts, and more than once requested partial dissolution of their interests in a trust that held, among other assets, Murphy Oil, Deltic, and First United stock," Porter wrote in his brief. "Mike and Chip also sold or pledged as collateral for debts much of the stock they had been gifted, and Mr. Murphy assisted them financially with several business ventures."

But diluting the family assets didn't sit well with Charles Murphy Jr.

 

 

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