KALAMAZOO, MI. — The Kalamazoo Community Foundation will collect $23 million — the largest single gift in its history – as a court settles a long dispute over a fund set up by the founder of The Upjohn Co.
The hefty sum is part of the settlement of a special prize fund set up by Dr. William E. Upjohn in his will and implemented five years after his death. The direction of the fund, related to Dr. Upjohn’s wishes, were contested by the Kalamazoo Community Foundation and Pharmacia & Upjohn Co. LLC (which is a subsidiary of Pfizer Inc.) after the trustee of the fund in 1995 questioned the direction it should take.
But the head of the community foundation was pleased with the settlement announced Friday morning.
“This is a great settlement, and we appreciate the positive relationships that made this resolution possible,” Carrie Pickett-Erway, president and CEO of the Community Foundation said in a press release. “This decision honors the legacy of W.E. Upjohn, who had a special interest in rewarding the pursuit of excellence while investing locally in both people and place.”
The Kalamazoo Community Foundation plans to endow the majority of the assets in a newly-established W.E. Upjohn Fund, an Unrestricted Fund allowing flexibility to meet needs in our community.
According to Tom Vance, director of marketing com¬munications for the foundation, the endowment will generate about $810,000 annually to be used to invest in the most pressing needs of our community.
Dr. Upjohn made provisions in his will that set aside 2,000 shares of company stock to generate money to allow The Upjohn Co. to reward at least two employees each year for their special accomplishments.
Prizes were to be awarded as long as the company was in existence. After that, the money was to benefit the community foundation. And therein lies the rub.
The Kalamazoo-based Upjohn Co. merged with Swedish drug maker Pharmacia in 1995 to form Pharmacia & Upjohn Inc.. That business merged in 1999 with Monsanto to form Pharmacia Corp. And in 2003, New York-based Pfizer Inc. acquired Pharmacia and the overall name of the company became Pfizer.
The complex matter of names, rights, existence and the fund which had accrued about $44 million by the time of this week’s ruling, was considered in probate court in 2003, where the court found that The Upjohn Co. no longer existed. But the matter was appealed and the Michigan Court of Appeals ruled in February of 2010 that it did.
On Thursday, the Kalamazoo County Probate Court Judge Donald Halstead ordered a resolution in which the parties agreed to a settlement. The parties were: the Kalamazoo Community Foundation; Pharmacia & Upjohn Co. LLC (formerly The Upjohn Co. and now a subsidiary of Pfizer Inc.); PNC Bank; and the Michigan Attorney General.
PNC Bank is the trustee of the trust. The Michigan Attorney General oversees all charitable interests in the state.
The agreement calls for $23 million of the $44 million trust to be distributed to the Community Foundation, the assets remaining assets will continue to be used for the William E. Upjohn Prizes.