The Family Jewels

In life, Paul Kalmanovitz controlled every business decision related to his $500million brewery/real estate dynasty.He even made detailed plans forthe governance of his estateafter he died. So why is the Kalmanovitz fortune the center of two vituperative

Consistent with Mr. Paul's controlling style, the company has no middle management. Between the three veeps, Orsi, Issleib, and Bitting, and the line employees -- whether they be brewers, apartment managers, or whatever -- there is no one. Mr. Paul's old post, the president's slot, is vacant and will probably remain so into the foreseeable future.

Filling the space left by Mr. Paul would certainly be a massive undertaking. Mercurial, controlling, and mean-spirited, he could also indulge in sentimentality. Once, after watching the movie Patton he was seized by a fit of patriotism. He cut a $500,000 check to West Point in honor of the general.

His eccentric temper and his parsimony were also legendary. Former employees remember him yanking scores of phones out of the wall and throwing them out the window of his Paradise Cay office into the bay. The reason? One former employee explained that the notoriously litigious Mr. Paul had to communicate with lawyers frequently. But he hated having no record of the call to compare to the billings his legal eagles would send him. So instead of phones, he installed faxes, and he banned conventional phones from the office. Every time he would catch his employees installing a line, he'd rip and toss. It is said that if the bay were dredged off Paradise Cay, hundreds of phones would be found.

When it came to business, Mr. Paul was a full-fledged control freak. Testifying in court, Orsi remembered how the S&P offices were set up so that his boss could see everyone at all times. "He never closed doors," Orsi said. "Jack Miller [Mr. Paul's right-hand man who died in the early '80s] was always within his sight. I was always in earshot."

Orsi continued: "He ran everything. He made all the decisions. The price rates, labor costs. Instigation of litigation. No discussion. Response to litigation. No discussion."

Questioning Mr. Paul's judgment? "You would approach that advisably," Orsi said.

Mr. Paul wanted his associates close to him at all times, Orsi added. "Some assistants would sleep there overnight," he said. "Twenty-four hours a day, seven days a week."

When he bought Pabst, Orsi said, Mr. Paul fired the brewery's administrative staff in three weeks and had a three-story office building emptied of all its documents, which were sent to Tiburon.

Orsi testified that Mr. Paul would oversee every financial transaction the company made. "He wrote every S&P check," he said. "He would prepare a journal, send it to the controller. He was three frustrated things: a frustrated accountant, a frustrated attorney, and a frustrated doctor."

A typical day with Mr. Paul would begin early in the morning. New business would end at 2 p.m. Lunch at Joe's in Corte Madera was mandatory duty. Household matters would be dealt with after lunch. And after dinner, Mr. Paul would retire to his office and balance the S&P books, sometimes until the wee hours of the morning. "He would not stop until the books were 'to the penny,' " Orsi told the court. "He would say, 'If they are off by a penny, they could be off by $5 million.' "

No doubt, Mr. Paul was all business. He had no hobbies, other than yachting, his friends and associates say. He consumed his life with commerce. Lydia miscarried once and the couple never had a child. They poured all their familial love into their pets.

Throughout his life, Mr. Paul struggled with family, both the concept and the reality. It's more than a little telling that he had his pets -- Pete and Marsha, the German shepherds; and Lady Kitty, the cat -- interred in diminutive sarcophagi next to him and his wife. The pets also received cash bequests in the will (money for their conservation) while many relatives didn't get a dime.

Some of Mr. Paul's litigious relatives think the conflict stems from the Holocaust where he lost his two brothers. "It's harder to survive," says his nephew Stanley Kalmanovitz during a break in court proceedings.

When asked about family, Mr. Paul had a standard speech, Orsi testified. "He described his family as nonexistent," he recalled in court. "He said he went back there after the war and they had all been wiped out. He must have told that story in my presence three hundred times."

The defendants stress that Mr. Paul made a big deal out of having no family.
"Mr. Paul always told me: 'Lutz, stay away from your relatives. They're no good. If you want to get rid of them, loan them money. They'll never show up again because they don't want to pay you back,' " Issleib told Forbes in May.

The contention by the defendants that Mr. Paul had ambivalence or outright hostility for his relatives is somewhat self-serving. The more they can convince the court that Mr. Paul disdained his family, the easier it will be to explain why they got so little from his estate when he died.

But there's ample evidence that Mr. Paul did care about his Polish relatives -- at least at one time.

Immediately after WWII, Mr. Paul made passionate attempts to salvage what remnants of the Kalmanovitz family remained after the Holocaust -- even the defense's own witnesses testified to that.

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