Earlier this year, Castel’s daughter and one of his nephews tried to unseat the CEO that the family patriarch picked to oversee the group. The dispute has reached Singapore’s Supreme Court and could go to trial later this year.
The tussle over the future of the empire is just the latest in a series of disputes between billionaire businesspeople and their potential heirs, centred on the use of trusts. These legal entities are often used to hold assets and transfer wealth. But as recent high-profile family feuds — including News Corp founder Rupert Murdoch’s court battle with his children — have shown, they can also be used by their founders to impose conditions on the next generation.
“What one generation might see as protection, the next generation experiences as restriction,” said Kirby Rosplock, founder of family office consultancy Tamarind Partners. “The more a founder tries to control from beyond the grave, the more likely the family is to fight it in the present.”
Generational feuds
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These wranglings over trusts have consequences far beyond the families behind the feuds, given the size of the companies and the amount of money that’s poised to change hands. The world’s 500 biggest family businesses generated US$8.8 trillion in 2024, meaning that potentially destabilising battles over control can reverberate through the economy. At the same time, a great intergenerational wealth transfer is gathering pace, with an estimated US$83 trillion in assets expected to be passed down worldwide over the next two decades.
“When trust relationships break down, the consequences can ripple outward,” said Rosplock. “These disputes matter to the rest of us because family capital isn’t isolated; it’s often embedded in companies, jobs, communities and philanthropy.”
This story is based on interviews with people with knowledge of the family, the trust and the Castel group of companies, who spoke on condition of anonymity to discuss private matters.
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Pierre Castel’s representatives declined to comment.
Pierre Castel was said to run his sprawling empire with an iron fist, retaining a tight grip well into his nineties. The son of Spanish immigrants who left school at the age of 11 to work in a Bordeaux vineyard with his father, Castel largely eschewed the yachts and luxuries of the billionaire lifestyle and often relied on a handshake to seal deals.
Castel moved to Switzerland in 1981 after France elected the Socialist President Francois Mitterrand, who promised to raise taxes on the rich.
The Castel Group is still in some ways a family affair. Pierre’s nephew, Alain Castel, heads the company’s wine arm, which is still based near Bordeaux. Alain and his brother Philippe helped build up the largely French operations over decades. A different branch of the family headed by another of Pierre’s nephews, Michel Palu, focused on the African beer business.
Creation of Singapore trust
In 2008, Castel created a so-called discretionary and irrevocable trust in Singapore.
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Administered by trustees, SG Trust (Asia) controls the Castel Group through two Singapore-based entities — Investment Beverage Business Fund and Cassiopee — and DF Holding in Luxembourg. DF Holding consolidates earnings from the sprawling Castel conglomerate, comprising more than 150 subsidiaries. Another Singapore-based entity, Investment Beverage Business Management, or IBBM, handles the distribution of dividends to the extended clan — five branches of the family descending from Castel and four siblings.
The spirit of the trust ostensibly reflects the founder’s desire for the drinks conglomerate to remain closely held and continue to grow through the reinvestment of proceeds. Castel didn’t want anyone from the second generation to gain real power over the entire empire and in recent years reiterated that no new family members were to become directors or company executives.
A statement from Romy Castel’s lawyers disputes this distribution of assets and rights within the structure. “Investment Beverage Business Fund holds the trust’s assets and through which the group’s financial rights flow, including the dividends distributed to the extended family, while Investment Beverage Business Management is the group’s decision-making body,” they said.
“Whoever controls IBBM ultimately determines the composition of the boards of the underlying entities, Cassiopee included. The control of IBBM is precisely the question now before the Singapore court,” the statement said.
Castel’s reticence over mixing his family and his business legacies first came to light in a court ruling in Switzerland. The billionaire lost a protracted dispute with Swiss tax authorities in 2022 and was forced to pay out around CHF400 million. His defence, led by tax lawyer Gregory Clerc, argued that Castel had removed himself from the business, first through a Liechtenstein foundation and then the Singapore trust, to prevent future family infighting.
In 2023, Pierre chose Clerc as CEO of the Castel Group. Clerc has seats on the boards of DF Holding, Cassiopee and IBBM, as well as more than two dozen other companies within the group, which employs some 43,000 people across 35 countries.
Alain Castel was also on the boards of DF Holding and Cassiopee until December, but was removed by the trustees, who have not given an official reason for his dismissal. He still heads the group’s wine business.
After being ousted, Alain publicly questioned the CEO’s strategic vision and ability to run the group effectively. At the time, Castel Group rejected Alain’s claim and said that Clerc was focused on developing the company.
Alain then teamed up with Pierre’s only child, Romy, 52, to try to push Clerc out. Romy — who has never held a major operational role at the company — told Bloomberg News in December that the CEO had amassed too much power and was “attempting to take control”.
Having failed to remove Clerc and chairman Pierre Baer from the board of IBBM through shareholder meetings and votes, the dispute has ended up in court in Singapore.
The case is complicated and hinges on a question over the balance of power between IBBM and the trustee of the overarching trust. Romy and Alain believe that permanently removing Clerc and Baer from the board of IBBM would be a first step towards replacing Clerc as CEO of Castel and exerting more family control over the group.
The other side disagrees with this interpretation. In an email to Bloomberg before the court case, Baer said that Clerc’s role at Cassiopee — which IBBF owns and hence is governed by the trust — doesn’t depend on his position at IBBM. “It is expected that he will remain in his position so long as the licensed and regulated trustee determines that he remains capable and competent to do so,” Baer wrote.
In the meantime, an order prevents Clerc and Baer from acting in their director roles at IBBM.
Clerc and Baer declined to comment on the dispute. In a statement, Alain Castel said Clerc should be replaced by someone who would “report to the family in a structured way”.
The DF Holding and Cassiopee boards said that the group is “ultimately owned by trusts, ensuring professional and independent control that guarantees the group’s good governance.”
“These disputes matter to the rest of us because family capital isn’t isolated; it’s often embedded in companies, jobs, communities and philanthropy.”
Bosch and Fox News
When a founder transfers ownership to a trust, particularly an irrevocable or non-reversible trust, the trust documents and the trustee appointed to enforce them have immense sway over how heirs benefit from the family business. A trust can effectively dictate that family members receive dividends but limit them from holding voting shares or having management roles, for example. Sometimes founders achieve this by separating economic ownership of an asset — what the children ostensibly stand to inherit — from control.
The founder of the German appliance maker Bosch used a variation of this principle when passing on his business. In that case, the economic interest was transferred largely to a charitable foundation, while a governance trust continues to run the company. Yvon Chouinard, founder of Patagonia, did something similar.
A founder intent on curbing family involvement may want to counter perceived nepotism or seek to equalise obligations among heirs, some of whom are likely better equipped than others to take on management roles. Warren Buffett, a vocal proponent of meritocracy, has regularly spoken out against dynastic corporate leadership.
Morten Bennedsen, a professor at the University of Copenhagen and an expert on family businesses, said the use of family and corporate trusts is on the rise because “just letting the next generation figure it out is high risk”.
Bennedsen cautions that succession plans based on trusts can go horribly wrong, pointing to the Murdoch saga as one of the most remarkable examples.
In 2023, Rupert Murdoch tried to modify the trust he had created years before to hold the family assets. His aim was to give his eldest son Lachlan majority control, in the hope of ensuring that the long-term stewardship of Fox News would rest in the hands of his most ideologically like-minded heir. That ignited a bitter clash between his children.
The ensuing court case effectively challenged a foundational premise of irrevocable trusts — that they exist independently from the wealth creator and are impervious to meddling. The court ruled against Murdoch in late 2024, but the three children who brought the suit later settled, agreeing to cede their shares in exchange for about US$1 billion in cash apiece. The case was closely watched, not just as a spectacle and precedent-setting trust dispute, but for its potential impact on the American political landscape.
The stakes were nearly as high in the years-long trust dispute that engulfed the media empire of Sumner Redstone, the controlling shareholder of businesses including Viacom and CBS. As Redstone entered his 90s and his cognition faded, a growing cast of characters became embroiled in disputes over control of his multibillion-dollar trust, which held his main assets.
Executives from Redstone’s companies, his daughter Shari, board members and other stakeholders sparred, spooking investors and torpedoing a proposed merger between the two companies. Shari finally consolidated control and pulled off the merger in late 2019. But six years later, she sold the company, renamed Paramount, to David Ellison. “I just wanted to be free,” she told The New York Times after the deal was announced.
A recent succession drama involving one of Poland’s richest families also ended up in legal proceedings after media tycoon Zygmunt Solorz tried to reverse a decision he had made just days earlier to transfer effective control of his empire to his three children. They fought back, warning company managers to block any takeover attempts while they tried to locate, then negotiate with their father.
The feud played out in both US and European courts, with the children singling out their father’s fourth wife, a fast-rising executive at one of the family businesses, for interfering in their reportedly ailing dad’s affairs. The battle hammered the shares of the family’s two main businesses, prompting one investor to bemoan the boards’ distraction with succession and personnel matters at the expense of strategy and development. In December, a court in Liechtenstein, where the family foundations are incorporated, ruled in favour of the children.
It’s getting complicated
Succession planning for the ultra-wealthy has become more complex over the years, with blended families — often the result of remarriages — and the globalisation of businesses that have left clans straddling international borders, according to a survey by the London-based Society of Trust and Estate Practitioners, or Step, an association of lawyers, accountants and wealth advisers.
Industry experts say other leading causes of disagreement around trusts include breakdowns in family relations, a lack of confidence in the younger generations’ ability to manage money and, even more fundamentally, differing viewpoints on the purpose of inheritance.
“The old-fashioned way of wealth planning was top down without any discussion,” said Matt Braithwaite, a partner at Wedlake Bell in London and specialist in succession and estate planning. “Imposing structures on next generations can lead to immediate conflict and a sense of distrust.”
Braithwaite said that to avoid conflicts, families need to talk and ensure that all stakeholders fully understand what is laid out in the trust agreements. But the need for that kind of slow, bespoke process runs counter to a broader industry trend towards more standardised trust structures, which are modelled on a more one-size-fits-all approach, he said.
“Imposing structures on next generations can lead to immediate conflict and a sense of distrust.”
Finding willing and qualified trustees within or near the family is also difficult, given the complexities and emotionally charged nature of the role. Trust experts say the shortage is poised to become far more acute in the coming years as more trusts are created to steward wealth being handed down.
The impact of trust quagmires extends well beyond the lives of the ultra-wealthy. Family businesses of all sizes account for some 70% of global GDP and about 60% of the world’s jobs, according to a 2024 McKinsey study. Research shows that family businesses tend to be more embedded in their communities and to take a longer-term, purpose-driven approach to capitalism. Family clashes and bungled succession frequently result in the sale of operating businesses, often to private equity or larger corporations that are, by default, more transactional.
Pierre Castel is months away from turning 100. As he navigates his twilight years, he has largely been absent from the legal battles, in which both sides have claimed to be upholding his wishes.
IBBM said in a statement that its directors, including Clerc, would continue to work according to the “principles and ideals of the founder of the Castel Group, Mr Pierre Castel”. The tax lawyer-turned CEO has said he has a broad mandate from the founder to run the firm independently of the family.
According to Romy, her father and his eight siblings got along well, but the next generations don’t share the same values or vision and it’s getting “increasingly complicated”.
“It’s very difficult within a big family to agree on everything,” she said in the December interview. “There is always a power struggle, and that worried my father a lot.” — Bloomberg Wealth
