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Signing a secret pact – will it hold up?

A way of keeping feuds at family businesses away from the public gaze might be by signing a secret pact. At least that’s what Gina Rinehart, the richest person in Australia, seems to think.

A way of keeping feuds at family businesses away from the public gaze might be by signing a secret pact. At least that’s what Gina Rinehart, the richest person in Australia, seems to think.

After battling through the courts her late father’s wife for 11 years for possession of the family business and estate, Rinehart is once again in court, but this time few will know what’s going on.

According to an Australian court, Gina Rinehart, worth an estimated $9 billion (€6.5 billion), and her four children signed a “secret pact” in 2007, which requires all family disputes to be settled in confidence to “protect the family’s image and limit the fallout on business dealings”.

While her past family business hit the headlines, the secret pact should stop media incursions this time round.

But does signing a secret pact make it legally binding? One top lawyer, who deals with reputation management, reckons so. “Breaching the contract [pact] is the same as breaching an order of the court – it would qualify as contempt,” she said.

Another family trust and succession expert added: “Courts don’t go about handing out privacy guarantees just to anybody. They’ll weigh up all the criteria and the family’s pact would have played a big role in its decision.”

While the family has been able to assert its privacy rights, it is possibly the media and public that will feel left out, says one expert. “This is not a public interest litigation case, but simply a family matter. What people will miss is the daily tittle-tattle during their morning tea and toast.”

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