Australian brothers at war over $500 million property empire
Two brothers are at war over one of Australia's biggest real estate empires, worth more than A$500 million (NZ$535m), four decades after their Italian family founded the dynasty.
Former Carlton Football Club director and developer Colin De Lutis lives in a Melbourne mansion three doors from younger brother Paul, who has taken him to Australia's Supreme Court over how their property and business assets will be sliced up.
Paul has wanted out of the family business since 2014, but an acrimonious argument is playing out in the Supreme Court over the break-up.
Together with their mother, Anna, the brothers own 38 properties worth more than half a billion dollars, amassed since the family bought a central Melbourne shop in 1973.
There, the family founded Westco Jeans and grew it into a chain of 160 retail outlets. It sold in 1999 for A$85 million.
That money was sunk into property and the De Lutis portfolio now includes Melbourne offices and development sites, Gold Coast and Mt Buller apartments, and suburban shopping centres.
Under an agreement with their late father, Colin – described by Paul as "the major driving force and the dominant personality" in the De Lutis family – owns about two-thirds of the company assets and Paul about one-third.
A court filing says this translates to Colin owning property worth A$316 million and Paul A$176 million.
Dividing the properties and cash has proved the sticking point for Paul. "The splits proposed by Colin left him with what I considered to be the best properties," he wrote in an initial court affidavit in 2015.
Last Friday, after several failed mediations, the first Supreme Court hearing was held.
The brothers are also now fighting over who controls the existing business – which Paul alleges Colin has locked him out of. Colin argues this is not true, but accuses Paul of incompetently managing some properties.
In an early affidavit filed by Colin, he says he hopes to resolve the dispute. "My Italian heritage dictates that family is the most important priority," he wrote.
Costs are mounting in the case, with hundreds of pages of affidavits, emails and reports by companies including Deloitte, Pitcher Partners and Charter Keck Cramer filed and top barristers and senior solicitors retained by both sides.
Anna De Lutis and her late husband Luigi were Italian immigrants who ran milk bars and delicatessens from the late 1950s and in the early 1970s bought a shop in Brunswick, Mlebourne.
They used the collateral to buy the Collingwood property where Colin opened the family's first jeans store. Colin says he started Westco there when he was "in my final years of high school, when Paul was a young child [around 10 years old]".
Anna De Lutis says she and Luigi, who died in 2012, hoped to pass down their properties to their sons amicably. "Luigi often said to me that he never wanted the brothers to end up in court," she wrote.
Two other brothers, Mark and Luke, are no longer part of the De Lutis group of companies, with Colin saying that Mark was paid A$10 million when he left the business, and Luke A$26 million.
Both Luke and Mark had become, Paul says, "bitter about the terms of [their] financial separation".
- The Age