Trustbusting

At 49, Christine Cromwell has had her share of poor-little-rich-girl problems, including five husbands and five divorces. She has also had a special woe: not being as rich in cash as she was in prospect. A granddaughter of Auto Magnate Horace E. Dodge, she was entitled to one-quarter of the $56 million he left in trust at his death in 1920. But there was a catch: the money could not be touched as long as Dodge's widow lived, which the hardy Scotswoman proceeded to do until 1970 when, by her own reckoning, she was 103.

Christine found the waiting onerous. Twenty years ago, she began borrowing against her inheritance, initially from the First Pennsylvania Banking &

Trust Co. (which claims she now owes it $1,400,000) and even from her long-lived grandmother (an additional sum of $1,000,000 or so).

In another move to increase her pocket money, Christine hit upon an ingenious device: selling shares in her rights to the estate. She persuaded nine people to pay a total of $1,500,000 at a rate of 30-c- for an eventual return of $1 from the estate. These nine, in turn, sold shares in their shares to some 700 other people. By the time of her grandmother's death, fluctuations in the value of her estate had reduced Christine's share to $ 11.9 million, and all the shares and loans were now due. Various creditors were claiming nearly $10 million.

At this point Christine attempted a legal ploy that would have made any robber baron proud. As part of her first loan, she had agreed to have the bank set up an inviolable and irrevocable trust fund for her, which would receive the bulk of her inheritance. Her lawyers therefore argued that her creditors, who all knew about the trust, could not collect from any of the funds in it.

Naturally the shareowners and other creditors complained, and Detroit Judge Nathan Kaufman, after listening to the arguments, concluded that "it would be a fraud, any way you look at it, if you set up a trust and people buy an interest and can't get their money." But Christine is not giving up. Her lawyers are considering an appeal on the ruling, and they also were suggesting last week that each claimant may have to prove his case individually. Since some of the 700 shareholders have died and passed their claims on to their inheritors, the proceedings could stretch toward infinity. Meanwhile, until matters are cleared up, the entire inheritance is being held by the Detroit Bank & Trust Co., and so Christine is still unable to touch a penny of it. Of course, if she wants to, she can try selling a new round of shares . . .

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