MP900400332Family business owners often fear that a child’s spouse will get part ownership of the business after a divorce. As one New York family is learning, employing tricks to avoid that from happening can lead to bigger headaches.

John’s Pizzeria is an institution in New York with locations all over the area. When owner Madeline Castelloti passed away in 2004, her will gave her entire fortune to her daughter Lisa, including the pizza empire.

Her son Peter was cut out of the will entirely.

According to Peter, shortly before his mother passed away he was going through a divorce. An agreement was reached whereby his mother would cut him out of the will. Then, once his divorce was finalized his sister would give him his share of the pizza business in exchange for Peter agreeing to pay the estate tax on the estate. Consequently, Peter’s soon to be ex-wife would not receive any assets from their mother.

Apparently, this arrangement did not work as planned. When the time came for Lisa to give Peter a share of the business, she balked.

The New York Daily News reported this story in "John's Pizzeria family to go to court over their empire."

An appellate court recently ruled that John can proceed with his case against Lisa. However, the court also mentioned this could result in the reopening of his divorce case.


Peter’s ex-wife could get some of the pizza business, so the entire plot might have been pointless.

Families that have similar concerns would be well advised to speak with attorneys how to arrange to keep the family business under family control.

Reference: New York Daily News (March 9, 2016) "John's Pizzeria family to go to court over their empire."