Klein & Wilson

In-N-Out chain has involved outs among family, trustees

The American public's attention was directed toward the young, female owner of a popular burger destination that started in California decades ago. Lynsi Torres has been called the youngest female billionaire in the U.S. due to her ownership of In-N-Out Burger.

Torres has no college degree and basically has inherited her business position and wealth through her family. Her grandparents started the chain that specializes in fast but fresh burgers in 1948. Since its inception, death and trusts have altered the ownership of the chain over time. And the current state of ownership hasn't come without its own contract disputes.

Forbes put together a sort of timeline of In-N-Out detailing time, events and transfers of ownership. The following are a few bullet points that highlight some of the landmark changes and disputes related to the company:

  • 1948: Torres' grandparents founded the chain.
  • 1997: Torres' dad (then president of chain after older brother died) established what's called the Lynsi Snyder Trust, naming three trustees who would be successors to the shares of In-N-Out.
  • 1999: Torres' dad died, making the trustees' work truly begin.
  • 2005: One trustee and Torres' grandmother (original owner/founder of In-N-Out) challenged another trustee's position and told him he'd be fired.

This 2005 incident led to the challenged trustee suing the other parties for breach of contract. He made various allegations against the trustees, as well as Torres, including that they had taken advantage of her grandmother in order to try to oust the trustee and basically direct and use the funds from In-N-Out for their personal gain.

In the end, the challenged trustee and those who challenged him wound up settling the business dispute. He became president of the company but currently serves as a trustee. Torres, at the age of 31, now owns the majority of In-N-Out due to trusts set up that transfer more shares of the business to her based on her age. She will get even more of the business when she turns 35.

Our California business litigation lawyers have experience helping those involved in breach of contract disputes.

Source: The Huffington Post, "In-N-Out Family Drama: Inside The Lawsuit That Almost Tore The Company Apart," Caleb Melby, March 13, 2013

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