The cofounder of Mary Kay is not entitled to a distribution from Mary Kay Holding Company to cover the cost of a legal fight with his son over the governance of a trust, a Delaware court determined this week.
Richard R. Rogers filed his complaint Aug. 27 in Delaware Chancery Court, arguing MKHC should be on the hook to cover the legal expenses from a lawsuit his son, Ryan T. Rogers, filed against him in Texas because it stemmed from his actions as a director of the company.
Magistrate in Chancery Loren Mitchell authored the final report issued Monday and wrote that in the Texas lawsuit “the essential causal link to the exercise of corporate powers or duties is absent.”
The claims “do not implicate conduct undertaken in a corporate capacity and therefore do not qualify for advancement under the governing legal framework,” Magistrate Mitchell wrote.
According to court documents, in 1975 Mary Kay Ash began establishing trusts for members of her family and their descendants. Until 2021, each of the 16 trusts was managed independently. That was the year MKHC formed two subsidiaries — Golden Rule Management and Golden Rule Investments — to manage all of the trusts more efficiently. That same year, Richard Rogers and his wife, Nancy, began requesting “substantial monthly distributions” from his trust and received about 70 percent of those distributions.
Two years later, in his capacity as director and executive chairman of MKHC, Richard Rogers started investigating the trust management entities and “initiated a series of Section 22 books-and-records demands” in December 2023.
He made four additional demands throughout 2024, according to court documents, and MKHC “responded and produced a significant volume of responsive information.”
In November 2024, the co-trustees of the trust, Ryan T. Rogers and Tolleson Private Bank, filed a lawsuit in state court in Dallas seeking guidance from the court that they were indeed complying with fiduciary duties in their administration of the trust, particularly in light of Richard Rogers’ “increased requests for distributions,” according to court documents. At that time, Richard Rogers had requested distributions “which if granted could end up paying Richard hundreds of millions of dollars in additional distributions.”
Richard Rogers filed counterclaims for breach of fiduciary duty and breach of trust against his son and the bank alleging Ryan Rogers got the board to approve creation of the Golden Rule entities “based on incomplete information, concealed his sole discretion of GRM distributions, and backdated approvals.”
MKHC agreed in November 2024 to advance Richard Rogers $200,000 for expenses incurred in the Texas lawsuit but the next month “reversed course and denied further advancement,” explaining the Texas lawsuit was not related to his service to the company.
Richard Rogers then filed this action in Delaware asking the court to compel MKHC to cover his legal fees for the Texas lawsuit.
“Although the plaintiff also argues that the Texas Action was a result of Richard’s investigation into GRM and GRI, the record demonstrates that the Texas Action was not brought in response to the books and records requests but rather was brought in response to Richard and Nancy’s extraordinary distribution demands, objections from other beneficiaries, efforts to remove the corporate trustee, complaints about investments, and concerns regarding whether Richard’s demands were voluntary and free from undue influence and not because of the 220 investigations,” the magistrate wrote. “I also reject the argument that the discovery in the Texas Action supports a showing that Richard’s actions as a director and MKHC’s actions in creating GRM are the reasons for the Texas litigation.”
Mary Kay Holding Corporation is represented by Philip Trainer and Samuel Gross of Ashby & Geddes and Todd A. Murray and Aaron E. Chibli of Foley & Lardner.
Rogers is represented by Michael A. Barlow, Hayden J. Driscoll, Peter Fountain and Margaret Sanborn-Lowing of Quinn Emanuel Urquhart & Sullivan.
The case number is 2025-0982.