Diana Fund Feud Foils Grant-Giving

A Princess Diana memorial fund has stopped making grants to charities because of financial problems linked to its bitter legal feud with an American collectibles maker, the Franklin Mint, the fund's top administrator said Friday.

Until the court battle is resolved, the Diana, Princess of Wales Memorial Fund is asking other trusts to pay the $16 million in grants it pledged to beneficiaries — including charities working with land mine victims and AIDS sufferers, said chief executive Andrew Purkis.

The Princess Diana memorial fund says it has put an immediate freeze on giving more and it's asking other charities to pick up the slack, reports CBS News Radio.

"Today the Diana, Princess of Wales Fund is announcing a plan to rescue the humanitarian programs that we committed to funding that are now in jeopardy due to a legal case begin brought against us in the United States," said Jo Bexley, spokeswoman of the Princess Diana Memorial Fund.

The legal fight began when the fund and executors of Diana's estate sued the Franklin Mint in 1998 over the sale of a Diana "Limited Edition Commemorative Plate," saying it violated their "exclusive rights" to the princess' name and image.

The lawsuit was thrown out as "groundless" and "unreasonable," court documents said. So in November, the Franklin Mint launched a $25 million lawsuit accusing the fund and estate of acting maliciously in filing the original suit.

Fund trustees decided to freeze the fund's $89.6 million in assets to ensure it could pay any legal costs.

Purkis told the British Broadcasting Corp. radio that some 500 jobs within the fund and its beneficiaries were under threat because of the lawsuit.

He said that once the funds are unfrozen, the trust will pay back, with interest, those who covered its promises to the charities. "If this doesn't work, it means unfortunately and terribly wastefully, a lot of wonderful projects may have to close while the fund remains in a frozen state," he said.

Purkis insisted the body was not in danger of closure. Asked whether the fund now regretted suing the Franklin Mint, Purkis replied: "At the time, the trustees were doing what they thought was right for the memory of the princess, and they followed legal advice very carefully. So I think it is only with hindsight that it is clear that it was such a mistake."

In the current action, the Franklin Mint claims the fund and executors of Diana's estate — including her mother, Frances Shand Kydd, and sister, Lady Sarah McCorquodale — acted "maliciously, wantonly ... and with the intent to oppress" in their 1998 lawsuit.

Speaking on Sky News TV, Purkis said the new action was "a quite unnecessary malicious prosecution suit against a charity which is doing fantastic work amongst the most vulnerable people in the world."