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ALLENS WRENCHED IN COURT

By
Selim Algar
Published Feb. 26, 2009, 6:53 a.m. ET

As more family fortunes shrink in the recession, the more skeletons come out of the closet.

One such case emerged yesterday around a founding family heir of Allen & Co., Wall Street’s high-profile media buyout firm.

An adopted son of C. Robert Allen 3rd – whose father founded the firm in 1933 – has seized control of the 77-year-old financier’s dwindling riches, and sued one of his longtime investment partners for allegedly bilking him of $70 million.

In court papers filed in federal court in Long Island, Luke Allen claimed his adoptive dad has been suffering “diminished mental capacity” and was duped easily by two Chicago radio entrepreneurs out of the millions, which Luke Allen wants returned.

A lawyer for one of the accused, Christopher Devine, denied any wrongdoing.