(Closes L’Oreal shares in eighth paragraph.)
Oct. 17 (Bloomberg) -- L’Oreal SA heiress Liliane Bettencourt is mentally unfit, a French judge said in a ruling that turns over management of her interests to Bettencourt’s daughter and grandsons.
Judge Stephanie Kass-Danno granted Francoise Bettencourt- Meyers’s petition for a guardian to look after her 88-year-old mother, saying she could not take care of herself, said Charlotte Robbe-Phan, a lawyer for the daughter, after the court met in private with the parties’ representatives today.
Bettencourt, France’s third-richest person, will appeal the ruling, Jean-Rene Farthouat, her lawyer, said, calling the decision “contrary to good sense.”
The ruling is the latest in a longstanding feud between Bettencourt and her daughter, who claimed her mother was being manipulated by her entourage, including a photographer whom she gave gifts totaling about 1 billion euros ($1.4 billion). Tethys, the family holding company, will continue to exercise the family’s L’Oreal voting rights, Bettencourt Meyers and her sons said in an e-mailed statement.
The court in Courbevoie, near Paris, asked Bettencourt- Meyers and her two sons to oversee her mother’s assets and Meyers’s eldest son to look after his grandmother’s physical well-being, Robbe-Phan said.
The three were “guided by the sole wish to see their mother and grandmother truly protected,” according to their statement. “It is a great relief for them today that Justice has recognized their position.”
Today’s decision doesn’t change a 2004 accord between the Bettencourt family and Nestle SA, which owns 29.6 percent of L’Oreal, according to the statement. Bettencourt and the world’s largest food company gave each other right of first refusal over their stakes that runs through April 29, 2014. The Bettencourt family owns 30.85 percent of L’Oreal.
Stephanie Carson-Parker, a spokeswoman for L’Oreal, declined to comment about the ruling. Bettencourt-Meyers and her sons also repeated in the statement their “profound bond” with L’Oreal and their desire to continue to support its future development.
L’Oreal shares rose as much as 2.67 euros, or 3.4 percent, to 81.17 euros in Paris trading. Shares closed up 1.2 percent at 79.44 euros.
The mother and daughter have fought for years over whether the heiress is fit to govern her fortune, estimated at $23.5 billion by Forbes magazine in March, making her the world’s 15th-richest person. Bettencourt’s father founded L’Oreal in 1909 and she and her daughter’s family hold almost 31 percent of the company, the world’s largest cosmetics-maker.
Bettencourt said in an interview yesterday in the Journal du Dimanche that she would leave France should her daughter be put in charge of her life. While Bettencourt will be able to travel and make many decisions about her life under guardianship, she would need their approval for travel expenses.
A guardianship decision must be renewed at least every five years under French law.
The issue of Bettencourt’s mental fitness has put into question her role on the L’Oreal board as well as the management of her estate. Bettencourt-Meyers initiated her legal case in 2007, after becoming concerned an artist friend of her mother’s had manipulated her to secure 1 billion euros worth of gifts, including art, real estate and insurance policies.
Pascal Wilhelm, who had previously been appointed to oversee Bettencourt’s affairs should she be deemed unfit, was cut out of the court’s plans today. He said “it is a great disappointment for Madame Bettencourt” and that she will “probably react badly.”
Wilhelm was Bettencourt’s lawyer until a controversy over an investment she made with another of his clients prompted him to step aside as her lawyer.
Investigating judges in Bordeaux, France, are looking into whether Bettencourt has been abused by her advisors and friends, as well as other issues, including possible campaign-finance violations.
--Editors: Anthony Aarons, Paul Jarvis
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