Scholastic CEO's sudden passing, office romance and surprise will

M. Richard Robinson Jr. was the long-serving head of Scholastic Corp. He died unexpectedly in June while on a walk on Martha's Vineyard. A surprising succession plan was left by him.

He did not give control to his sons, siblings or ex-wife of $1.2 billion publisher, which he had rekindled friendships with during the pandemic. Iole Lucchese was Scholastic's chief strategist officer. All his personal belongings were also passed to her.

Robinson, a 30-year veteran of the company, described Ms. Lucchese as her "partner and closest friend" in the 2018 will. A copy was reviewed by The Wall Street Journal. Interviews with former employees and family members revealed that Robinson and Lucchese had been romantic partners for a long time.

Lucchese's sudden emergence in Scholastic's heirloom has set off a family succession drama at this century-old company. It is one of the largest publishers of children’s books worldwide, including the Harry Potter novels and the "Magic School Bus" series. This has raised questions about the future of its independent business.

People close to the situation say that some family members are unhappy with their legal options. There are many concerns, ranging from the need to preserve Scholastic's autonomy to concern about Robinson's personal property being taken over by an outsider. One person suggested that Lucchese could reach an agreement to transfer voting shares to relatives or ensure they receive a larger share of the estate.

Richard Robinson's youngest child Maurice Robinson called Richard Robinson's decision to hand over control of his personal belongings to Lucchese "unexpected" and "shocking."

The 25-year old filmmaker stated in an interview that "what I most want is an amicable result."

John Benham Robinson, the elder son, was 34 years old and stated in an email that he "served salt in an open wound" when he grasped his father’s estate plans.

He claimed he had not met Lucchese and heard her voice before a phone call that the family made on Wednesday to discuss Robinson’s will. Reece Robinson stated that they expected to work together with the estate. He declined to give more details.

Richard Robinson was 84 years old when he died. Robinson was very private about his estate planning, and his personal life. Some colleagues were disappointed that he didn't groom a successor. Even those closest to him don't know his motivations for giving the reins over to Lucchese. Ex-colleagues believe that the pair split a few years back.

It is also unclear who will inherit large amounts of common shares that Robinson owned, which are valued at approximately $70 million.

Scholastic's 54-year-old chairman, Lucchese declined to comment. Peter Warwick, a board member, was appointed CEO. The company did not make Warwick available for comment.

BOOK CLUBS

Robinson and his father were the only people who managed the company until recently. The magazine was founded in 1920 as a classroom publication. Scholastic is a trusted source of books and educational material for generations of students, teachers, and parents. Its titles include "The Hunger Games", "Captain Underpants," and "Captain Underpants". Students filled out monthly orders through its book clubs for decades.

Lucchese had pushed Scholastic towards digital business lines, sometimes clashing with Robinson, according to several people familiar with the matter. A company spokesperson said that Olive has a track record of innovation, focusing on customers' needs, and strengthening Scholastic's brand.

It will be up to Warwick and Lucchese to manage a recovery from the pandemic that decimated Scholastic's core business, closing schools and cancelling fairs. Revenue fell 13% to $1.3B for the fiscal year ending May 31.

Scholastic's revenues were mostly flat in the five years prior to the pandemic. The company's market capitalization is $1.2 billion, which is about the same as 20 years ago.

Scholastic is a target for larger publishing companies, due to its children's publishing business. According to industry executives, Robinson and his family considered Scholastic a family-controlled entity, which was not for sale.

The company stated in a written statement that Scholastic was a loved brand and continues to be a leader within the education and publishing industries. It would not surprise to learn that there are discussions about the Company's interest.

Richard Robinson's younger brother William Robinson stated in an interview that his father and brother wanted Scholastic to remain independent.

He stated that "our family value was that we would prefer not to have the financial gain from a sale if this means the company will be in the future less than it was." Scholastic is a well-known brand and everyone has a positive feeling about it. It also does great things for teachers. It's much more than a business to us.

Mary Sue Robinson Morrill was one of Robinson's sister. She stated in a written statement, that she and her siblings agreed that "our first goal is to continue the mission and legacy Scholastic, as well as the vision and brilliant work of both our father, Dick, and that we are confident that new management will fully commit to this goal."

According to a securities filing, Lucchese, under Robinson's will, revocable trust and will, will be the sole beneficiary 53.8% of Class A shares of the company, which have the vast majority of voting power.

She is the beneficial owner of approximately three million Scholastic Shares, including Class A shares; more that two million common shares including options; and 137.952 common shares and options she already had, according to the filing.

A company spokesperson stated that Robinson's common shares, valued at $70 million, will not be hers. It was not possible to find out the terms of Robinson family trusts or details about any tax or debt obligations related to Mr. Robinson’s estate.

Robinson's family own shares in Scholastic through trusts that have a roughly 5% share, according to S&P Global Market Intelligence which provides financial tools and data.

SUCCESSION SEECRET

Robinson was a keen fitness fan and died suddenly on June 5. This shocked his family and Scholastic executives. Robinson had not publicly named a successor, and it was still unclear for weeks who was controlling the company.

Laura Twomey, a Simpson Thacher & Bartlett LLP partner who managed Robinson's estate planning, requested that a New York probate court take action on Robinson's will. She stated that the company could not respond to "time sensitive corporate decision or emergencies" due to inability to reach a majority of stockholders.

The court granted the request a few days later, giving Lucchese the power to vote Robinson’s Class A shares. Robinson also listed Lucchese, Scholastic’s general counsel, as a coexecutor of his estate.

Lucchese is solely responsible for deciding whether or not to give any personal belongings to his sons.

Robinson's children described the experience as difficult. Reece Robinson stated that you might believe that he didn’t see his sons because of the will. "This is false. "I have seen him several times per week for the past two years."

Robinson was said to have spoken about his struggles as a young worker at the company. He joined the company in 1962 as an assistant magazine editor. His sons did not go on to make a career there.

Reece Robinson, a documentary photographer, stated that he tried to get involved with Scholastic, but has not been able to work there full-time. He said, "I saw myself as an advisor." "I didn’t want to give up my 20s to work for a corporation."

Ben, his brother, said that he runs a sawmill and workshop from which he produces lumber, flooring, and furniture. He also lives off the land and wrote in an email: "I fish for the fish and cull deer." He describes himself as a writer, and "the poet laureate" who hasn’t yet told his story.

As a child, he walked around the Scholastic headquarters in New York City's SoHo neighbourhood. He also worked as a teenager at the Scholastic store and was dressed as Clifford the dog for parades.

The elder son replied to questions via email and said that his father valued his perspective on all matters, especially regarding the company's trajectory. According to him, he had told his father over the years that he desired to be more involved with the company, and "most explicitly my desire" to be a Board member.

Scholastic Canada was founded by Lucchese in 1991. She began her career as an associate editor in book clubs. As co-president of Scholastic Canada's Canada operations, she was her first major role. Lucchese rose to prominence in U.S operations after she was appointed chief strategy officer in 2014. She was named chief strategy officer in 2014. Two years later, she was the sole president of Scholastic Canada. In 2018, she was elected president of Scholastic Entertainment. According to an affidavit filed at New York Surrogate's Court, Lucchese, a Canadian living in Ontario, is a permanent U.S. citizen.

Former executives claim that Lucchese has been focusing a lot on the development of an entertainment business for Scholastic. Paramount Pictures is expected to release a movie based on the company's TV reboot of "Clifford the Big Red Dog", which was available on Amazon Prime Video and PBS Kids. Lucchese is also responsible for Scholastic's digital content marketing and communications initiatives.

Former employees describe Robinson's relationship with Lucchese being sweet at times and bitter at others. Former staffers claim that they sometimes clashed in meetings, and in some cases, because Lucchese wanted more risk to grow the company. Robinson still relied on her, and she remained part his inner circle.

Scholastic was still reeling from Covid-19's impact in the spring 2020. Scholastic's classroom magazine division quickly developed a free online hub that featured lesson plans based on Scholastic's children's books.

According to executives, Lucchese was unhappy about what she considered a missed opportunity for a commercial deal. The company didn't capture information about users or what Scholastic products might be of interest to them. Robinson dismissed her concerns in front other executives, one executive stated. Although the company offered a $5.99 monthly subscription later, it failed to gain traction and was pulled later.

"THE BICKERSONS"

Robinson's romantic relationship with Lucchese began many years ago. It was kept secret within the company. Although it was not considered inappropriate by former staff, it can sometimes make workplace dynamics awkward.

Some employees learned quickly that the two were part of a ritual. Some staffers found it personal that they were involved in fights during meetings. They were once called "the Bickersons" by a former executive.