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Ipswich residents take Little Neck battle to SJC

A group of Ipswich residents has asked the state Supreme Judicial Court to decide if Little Neck should have been sold for $31.4 million in August to 166 cottage owners, dissolving one of the nation’s oldest land trusts.

“We just feel this is such an important case, it requires the court’s review,” said Catherine Savoie, an attorney at Posternak, Blankstein & Lund, a Boston law firm representing the residents.

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Savoie declined further comment. Lawyers for those who managed the land trust and agreed to the sale have until Oct. 1 to respond to the filing, according to the SJC court docket. Their attorney, Brian M. Hurley, did not return a call seeking comment.

The trust was established in 1660 after William Paine, an English settler, wrote in his will that the windswept peninsula rising over Crane Beach should never be sold, and rent collected from its use be placed into a trust to benefit the Ipswich public schools.

The SJC filing contains two briefs submitted by experts in trust law and philanthropy, critical of the lower court’s decision to allow the sale.

“The Probate Court abandoned all meaningful analysis to support its modification of Paine’s trust,” wrote Ronald Chester of Lincoln, who identified himself as a professor of trust and estate law for nearly 40 years.

A letter submitted by a nonprofit group called Donor Advising, Research & Educational Services of Indianapolis said the court’s decision to modify Paine’s will could have broad impact. “It is imperative that donors be given assurance that their intent will be carried out throughout the life of their gift, even into perpetuity if the gift is created in such a way,” the letter states.

The agreement contradicted Paine’s intent that the land trust be held “ . . . forever, on the condition that the land should not be ‘sold nor wasted,’” according to the SJC filing.

The settlement agreement allowed for Little Neck, which is about 35 acres, to be sold to cottage owners, who formed a condominium association. Mark DiSalvo, a trustee of the association, said the residents’ latest appeal is “. . . well-crafted but wholly without merit.”

“The transaction is completed and cannot be unwound without significant harm to all parties, particularly the school children of Ipswich,” DiSalvo wrote in an e-mail to the Globe.

For centuries, the trust was controlled by a board known as the Feoffees of the Ipswich Grammar School. More recently, the feoffees and Ipswich officials fought a decade-long battle over the amount of rent being charged to cottage owners, and the amount of money contributed to the schools.

In 2010, the Ipswich School Committee sued the feoffees in Essex Probate Court. In December 2011, a few days after the trial opened, Judge Mary Anne Sahagian approved a settlement agreement between the two sides. The state attorney general’s office, which oversees charitable trusts, also agreed to the sale.

The settlement angered some Ipswich residents. They argued that Paine’s wishes were not being honored, and that the sale price of $31.4 million was too low. Residents in February filed to block the sale with the state Appeals Court, but a justice of the court ruled against the motion.

Lawyers for Ipswich residents — bolstered by an overwhelming vote of Town Meeting in May to continue legal action — asked the state’s highest court to hear the case.

“Because of the court’s preeminence, we’ve asked them to take the case directly,” Savoie said.

Proceeds from the sale were put into in a new investment trust established to benefit Ipswich schools. A seven-member panel, known as the New Feoffees, has been appointed to manage the trust.

After expenses related to the land closing and past bills owed by the former feoffees, the trust to benefit the schools will have $25.4 million in assets, according to a statement issued last month by the New Feoffees.

Ipswich schools are to receive $800,000 for each of the next three years; after that, the New Feoffees will determine how much the schools receive, according to the agreement.

Hugh O’Flynn, chairman of the Ipswich School Committee, said the board has decided not to spend any of the payment.

“We are concerned, if on the small chance the [sale] is overturned, if we have used the money, we will be liable for it,” he said, adding that the “School Committee stands by its decision” to agree to the settlement.

Kathy McCabe can be reached at kmccabe@globe.com. Follow her on Twitter @GlobeKMcCabe.

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