Jay Pritzker quietly built a $15 billion empire of more than 200 companies, including Hyatt Hotels Corp., and a network of 1,000 family trusts. But one of the patriarch's final deals before his 1999 death, designed to bind his heirs closer, unleashed a torrent of anger, greed, and betrayal, culminating last fall in a $6 billion lawsuit by his 19-year-old niece, Liesel. The author charts the destruction of a great American fortune.

It is a simple moment that stands out most vividly in the memories of Jay Pritzker's friends—a moment during his funeral which did not seem to them remarkable at the time, but which in retrospect was the last time they saw his family united. "It was a very cold day and there was snow," one friend recalls. Because of the weather, many guests had not been able to make it to Chicago that day in January 1999; still, nearly 1,000 mourners had shown up at the Emanuel Congregation to pay their respects, forcing the police to barricade part of North Sheridan Road to make way for the limousines. Chicago's mayor, Richard Daley, had come, as had the former congressman Jack Kemp, the real-estate billionaire Sam Zell, and the advice columnist Ann Landers, along with scores of investors and businessmen with whom Pritzker had dealt in the decades during which he amassed one of the largest fortunes in America. The former director of the National Gallery of Art J. Carter Brown, who, before his death last year, chaired the jury of the famed Pritzker Architecture Prize, was there. And so were representatives of the countless hospitals, cultural groups, and charities to which Pritzker had, before he died at the age of 76, given hundreds of millions of dollars. "The temple was filled," says one of Jay Pritzker's friends. At the front of the synagogue, taking up several rows of seats, were almost all of the 52 living members of the Pritzker family. For many of the mourners, it was the first time they had seen so many of the publicity-shy clan in public. Intensely private, they are rarely photographed or interviewed, almost never seen. Marian "Cindy" Pritzker, Jay's wife of 51 years, and his younger brother and business partner, Robert, were seated in the front row, flanked by Jay's three sons, Thomas, John, and Daniel, and his daughter Gigi. With cousins surrounding them in a protective phalanx, they formed a tableau that Jay Pritzker, friends say, would have loved. In life, they say with sadness now, nothing was more important to him or gave him more joy than his family. All three of Jay's sons spoke at his funeral that day. They spoke about his passions for skiing and buying companies, and about how much they loved him. "I've lived a privileged life, and truly the greatest privilege was getting to know Dad in my adult years," said Daniel, a rock musician, who is now 43. "Growing up was kind of like having Chuck Yeager and John Glenn for a dad," said John, now 49 and an entrepreneur in San Francisco. And then Tom, Jay's oldest son, stood up to speak. It was Tom, now 52, to whom Jay had passed the torch; Tom controlled the family's empire—including its crown jewel, the Hyatt Hotels Corp., the Pritzkers' web of more than 200 privately held companies, vast tracts of real estate, and some 1,000 family trusts, all of which, taken together, are said to be worth $15 billion, if not more. His father, Tom told the crowd, "believed a man's only immortality comes from the values he instilled in his children. The country has lost a great man. I've lost my father. I've lost my partner. I've lost my best friend." As he spoke, Tom began to cry.

Liesel Pritzker exits a courtroom at the Daley Center, in Chicago, 2003

Liesel Pritzker exits a courtroom at the Daley Center, in Chicago, 2003. John Zich/Bloomberg News/Landov. The day of his funeral was the last time that many of Jay Pritzker's friends saw his three sons together. The moment that sticks in their memories is how lovingly his sons spoke of their father—because what they did next would surely have destroyed him.

The first hint of trouble came last November. Just before Thanksgiving, Robert's 19-year-old daughter, and Jay's niece, Liesel Pritzker—a Columbia College freshman and an actress who starred alongside Harrison Ford as the president's daughter in the 1997 movie Air Force One and who is currently appearing in the Broadway play Vincent in Brixton—filed a lawsuit in Chicago against her father and all the Pritzker cousins. Setting off an explosion of publicity, she accused her family of looting her trust funds and those of her 20-year-old brother, Matthew, in a way that was "so heinous, obnoxious and offensive as to constitute a fraud." The amount of money which Liesel claimed was taken from her was staggering—$1 billion—and she not only demanded it be returned, but asked the court to award her $5 billion in punitive damages. It was a stunning lawsuit, not just because of the money involved, but also for the questions it raised about the Pritzkers. What could have happened within a family, people asked, that would lead a young woman to sue her 76-year-old father and go public with such ugly accusations? As Liesel's case moved forward, it brought to light something more disturbing. In a confidential agreement made in 2001, Jay Pritzker's children, his nieces and nephews, and his cousin Nicholas had decided on a 10-year plan to break up the family's business empire and split the assets among themselves. Each of those who participated in the agreement would reportedly get an equal share—estimated at $1.4 billion. Liesel and her brother were the only cousins not included in the secret pact. If outsiders were shocked by the family's decision to rip apart one of the great American fortunes and dismantle a business empire that had taken four generations 100 years to build, they have been horrified by the bitter feuding within the family that led to the agreement. Led by Jay's two younger sons, John and Daniel, they say, one group of cousins turned on the other, pitting brothers against sisters, cousins against cousins, and forced them to do what Jay Pritzker had expressly told his family he did not want them ever to do: grab the family's money for themselves. "It's sad and a little bit disgusting," says one old family friend. "As far as I'm concerned, the kids are assholes," says another close friend of Jay's. "Jay agonized over the last 10 years of his life how he was going to leave this, [and] all I can say is he would be spinning, spinning, with embarrassment in his grave if he knew how these children have handled it." Other wealthy families have struggled over the fortunes built by their fathers and grandfathers—the Rockefellers, the Binghams, the Kochs, among them—but few people expected that the Pritzkers would fight, and certainly not so "viciously," in the words of a family friend. Few families had been as close as the Pritzkers. They were each other's best friends, people who knew them say, and their fortune was built on this closeness. "The family was kind of The Family—one for all, all for one," says Bruce Leadbetter, a Dallas investor who worked with Jay for nearly 30 years. They shared an 860-acre family farm, pooled their money, and their trusts were interlinked. They really liked one another. Even after he married, Daniel lived close to his parents, and one investor recalls how Jay would sometimes be an hour late for meetings because, he'd say, "Danny wanted to talk, and I felt I wanted to do that." "Jay used to joke that the family operated like a kibbutz," says Sugar Rautbord, a Chicago socialite and novelist who had known Jay since she was a teenager. There are some people who say that greed, pure and simple, is what drove the Pritzkers to tear apart what the patriarch had built and is what keeps them fighting bitterly even now over how the money will be distributed. But close friends say that would be easier to take than the real reason. "It's not money," says one. "It's just this personal, vicious anger they have," a friend says. "It is so emotional, you can't believe it. It's what hate does."

It was a Friday in June 1995, a friend recalls, when Jay Pritzker phoned him early in the morning and asked if he would go with him for a drive. "We went for a ride that day, but it turned out that isn't why Jay had called me," this friend says. "He wanted to talk. He was worried." Jay had decided that the time had come for him to announce to the family his plans for the future, and he had called a meeting for that afternoon. He was slowing down. He had heart problems which would soon force him to give up his great passion, heli-skiing. It was time, Jay believed, to prepare for his succession, and he was nervous. He wanted to be fair, and he wanted his children to be happy, but he also wanted to ensure that the family business and fortune were in the best hands. Jay's four children gathered that afternoon at Tom's magnificent Lakeview Drive apartment. They were joined by Robert and Nicholas and six of Jay's nieces and nephews. Liesel, who was then 11, and Matthew, then 13, were not invited. As everyone took their seats, Jay prepared to speak. He was worried, as was Cindy, about how his plan would be received. His family had grown; there were so many adult members now, with such different interests. After making a few opening remarks, he handed each person a copy of a letter. Two pages long, typewritten and single-spaced, it was signed by Jay and Robert, and, reading much like a last will and testament, it laid out their instructions to the family. "We are writing to clarify some of the confusion that may exist about Family wealth and the Family Trusts," the letter began. Most of the family's wealth, it explained, was in corporations owned by trusts. "From time to time," the letter continued, money from the trusts would be distributed to family members "to meet their reasonable needs." However, after those needs were met, "the Trusts were not intended for and should not be viewed as a source for individual wealth." What they were primarily designed for was to accumulate wealth to invest in the family's business and enhance the family's position through its philanthropic donations—not to make billionaires out of individual Pritzkers. "Our generation and our forebears," the letter said, "were raised with the concept that we not spend more than we, as individuals, earned or contributed to the Family and society." Jay Pritzker was a man who detested conspicuous consumption and who feared the effect of too much wealth on individuals and on society. "He felt that was the greatest risk [to society], too much separation between the haves and the have-nots," Bruce Leadbetter says. Although he lived well, he did not live luxuriously. He never had bodyguards, nor did Robert, who always flew coach, despite the fact that the family owned a Falcon 900 jet, which Jay had bought reluctantly, says a family friend, to use for business travel. As with Robert, "you wouldn't notice Jay in a crowd at all," says Leadbetter. "You'd go into a Hyatt hotel and you'd see him standing in line and checking in with everyone else." Jay tried to teach his children not to expect to have money "just because you are born a Pritzker," says one friend. He drove a Ford Taurus, says another friend, because he was part owner of a Ford dealership, but also because "he didn't want his children to think about Rolls-Royces and Mercedeses." Jay, says Mel Klein, who was a business partner for 30 years, "believed that anything that went to individuals should be based on productivity and contribution, not just because you were in the bloodline."

In his and Robert's letter, Jay made clear that the family trusts were not to be broken up until the law governing trust perpetuities required it, which one source suggests might not be until 2042. Jay also made explicit his plans for succession. Tom would take his place at the head of the family business. A published expert on 11th- to 15th-century Tibetan art, and a close friend of the Dalai Lama's, Jay's oldest son had worked in the family business since getting law and business degrees from the University of Chicago in the late 1970s. Penny and Nicholas would work with Tom as, in effect, vice-chairmen of the Pritzker operations. The daughter of Jay and Robert's younger brother, Donald, who died in 1972, Penny is the first female Pritzker to rise to the top of the family empire. Now 43, Penny is a triathlete and a Harvard graduate, with law and business degrees from Stanford. Nick, now 57, is probably the most charming and outgoing of any Pritzker, after Jay. Although he was Jay and Robert's cousin—their uncle Jack's son—he was closer in age to Jay's children and had started to work for the family business in 1975. As Jay saw it, this was the triumvirate that would lead the Pritzkers into the new century. Jay made it clear that he expected his children and nieces and nephews to "feel morally bound" to follow his wishes. "Since our generation primarily created the wealth our Family possesses, within the limits imposed by the law, we are entitled to express our wishes as to the disposition of that wealth," Jay wrote. Attached to the letter was a separate memo. It was, some say, Jay's peace offering, a gesture he hoped would help keep the family happy. In it, he outlined a series of lump-sum payments and allowances that would be given to each member of the fourth generation and to Nick. The payouts had been put in place around 1990, but Jay increased the amounts. Starting when they graduated from college, each of the cousins would now get a yearly stipend—paid retroactively—that would begin at $100,000, after taxes, and climb to $1 million a year at the age of 40. On top of that, there would also be lump-sum payments for having passed key points in their lives—graduation from college, reaching the age of 30, and so on. By their 45th birthdays, it is said these payments would add up to a tidy $25 million per cousin, also after taxes. One doesn't have to read between the lines to understand that Jay was worried about giving this kind of money to the next generation. "We earnestly hope that providing [this] money from the Trusts will not destroy the family ethic," he wrote in the letter, "and it is our belief that in some circumstances making excessive amounts available could have that effect." After Jay spoke and the letter was read, everyone seemed happy. No one raised any objections. "There was no dissent," says a friend of the Pritzkers'. It appeared that Jay's gambit to buy peace in the family had worked.

In the history of American business, there are probably few men who were as pragmatic about making money as Jay Pritzker. He did not buy companies out of ego, or because they were in fashionable industries, or because they were well-known names. He bought them only if he believed they could make him a profit. In a career spanning nearly 50 years, Jay bought and sold more than 200 companies and financed the start-up of many others. Most of these were companies that few people have ever heard of—nuts-and-bolts manufacturing companies such as the Amarillo Gear Co. and Darling Store Fixtures. He would buy them if he thought they were undervalued by the market, or if their tax structures were such that, when combined with other companies in his empire, they would help him reduce—and sometimes eliminate—the taxes to be paid to the federal government. "Jay was always looking for an angle," says one banker who knew him well. "A tax angle, or a value angle. Something that others didn't see." He was the kind of man who could sit in a hotel coffee shop near Los Angeles International Airport, as he did one day in 1957, see that it was bustling, discover that the hotel had no vacancies, and see a deal. The coffee shop was called Fat Eddie's, and the hotel was Hyatt, named after its owner, Hyatt von Dehn, and Jay bought both that afternoon for $2.2 million, writing his offer price on a Fat Eddie's napkin. His bet was that business executives would want to stay at luxury hotels near major airports, and he turned out to be right. Today the Hyatt chain is said to be worth anywhere from $5 to $7 billion. Among hard-core financiers, Jay is considered to have been perhaps the greatest deal-maker of his day, although he was almost completely unknown to the general public. Few people, for example, knew that he controlled Braniff Airlines for a time in the 1980s, or McCall's magazine, which he bought in 1973 and then sold in 1987, or Ticketmaster, which he bought in 1982 and sold in 1993, or Levitz Furniture. Or that his family owns a quarter of Royal Caribbean Cruises and helped found Tenet Healthcare Corporation, the second-largest hospital owner in the country. Jay hated publicity and managed to avoid it even when involved in wildly controversial deals—using a partnership called Resource Holdings for an unsuccessful hostile run at the ITT Corporation in 1984, for example, and a partnership called GKH to represent him in 1989 in a failed bid by First Boston to break up RJR Nabisco.

Jay was color-blind, but if someone didn't lay out his socks in the morning he didn't mind going to business meetings wearing mismatched ones. At the opera or the symphony he would run to a phone during intermission to call his business partners. "Once, he lost a tooth when he was visiting Tom in Nepal," Sugar Rautbord recalls. Too busy to do anything about it on his return home, "he just went to the opera with a big gap in his teeth." He lived for business. "He was a deal nymphomaniac," says Leadbetter. Unlike many investors of his stature and wealth, Jay did most of his own deals. "He'd be out there himself," says one prominent investment banker, meeting people, sniffing around for opportunities. Older investment bankers recall how awed they were as young men to pick up the phone and have Jay Pritzker tell them he was downstairs and could he come up for a chat? He'd sit in their offices and pepper them with questions and listen intently. And he would do them little favors. It was how he won loyalty and why they brought him deals before they showed them to anyone else. To many of those who invested with Jay over the years, there was no financier who was more honorable. "You could play cards with Jay over the phone," says Leadbetter. "You could absolutely trust him." Not everyone felt this way, however. In the early 1990s the Pritzkers were sued by Donald Trump, who charged that the family had used "fraud, extortion and money laundering" in an attempt to force him out of his 50 percent share of the Hyatt next to Manhattan's Grand Central Terminal. In his lawsuit, Trump said the Pritzkers had, among other things, extracted $60 million in unearned management fees from Hyatt, used other Pritzker companies to bilk the hotel, and siphoned off even more money through "improper bookkeeping" in order to force him to sell his interest to them. The suit was eventually settled. Similar allegations were made in another lawsuit, filed in 1988, that was even more bitter and protracted. Paul Dopp, a New Jersey businessman, accused Jay of using "deceit and duress" in an attempt to force him out of his share of a deal he'd made with Jay to buy two casino hotels in Puerto Rico. The case went to trial, and eventually Dopp won a judgment of $15 million. "Jay Pritzker thinks his power and his resources permit him to prevail over other weaker, less wealthy, less determined adversaries," an embittered Dopp said at one point during the court fight. Charming, witty, always polite, Jay hid his rougher side from most people. "He had this very gentle, very quiet voice," says one friend. "They all speak so softly. It's the Pritzker whisper. Jay used to say, If you raise your voice, it shows you're out of control. Let the other guy get out of control.' Once, I heard Jay on the speakerphone with a guy who was screaming at him, You asshole. You destroyed me.' And Jay said—very quietly—I'm sorry you feel that way.'"

Over the years, the Pritzkers have donated more than $500 million to institutions and charities, not only in Chicago but around the country. On June 5, 2002, they gave, with more fanfare than usual, $30 million to the University of Chicago. The gift, for biomedical research, was in celebration of a milestone for the family: on June 5, 1902, a Russian immigrant named Nicholas Pritzker had founded a law firm in Chicago that would become, over the next 100 years, the seat of the family's fortune and its business empire. Nicholas was 10 years old when he arrived in Chicago in 1881 with his parents, who had fled the Jewish ghetto near Kiev. As a boy, Nicholas helped to support his family, working as a newsboy and a tailor's assistant and shining shoes. He taught himself English by translating the Chicago Tribune into Russian, using first an English-German dictionary and then a German-Russian one. He studied pharmacy and became a druggist, and then, while supporting a wife and three sons, he got a law degree through DePaul University's evening program. Eventually, Nicholas's three sons—Harry, Abram Nicholas, and Jack—also got law degrees and joined their father at the firm he had founded, Pritzker Pritzker. It was Jay's father, Abram Nicholas, or "A.N.," who, after graduating from Harvard Law School, began to move the family into investing. During the Depression, he and his brother Jack laid the foundation of the family's wealth by buying up real estate and troubled companies at distressed prices. "A.N. Oh God. What a piece of work," says a family friend. "He was almost bigger than life. Hysterical." Tough and blunt, "he'd just cut through it," says this friend. In his 80s, A.N. was racing around making deals, recalls another friend. "He was blind [by this time]," says this person, "and doing these deals that Jay then had to go behind his back and unwind because Jay couldn't bear to tell his father that he couldn't do business anymore. Jay treated his father with such respect." A.N. introduced his three sons to the family business early on, bringing them to the office when they were little boys and quizzing them over dinner about math problems and financial issues. Jay finished high school when he was 14 and then went to Northwestern University, where he majored in accounting. He served as a naval flight instructor at an air station outside Chicago during World War II, attended Northwestern's law school, and then joined Pritzker Pritzker. In 1953 he borrowed about $95,000 from his father's main banker, the First National Bank of Chicago, and made his first acquisition, the Colson Company, then a run-down manufacturer of metal goods in Elyria, Ohio. He brought in his brother Robert to run it.

An engineer, Robert was the only third-generation Pritzker not to have gotten a law degree. Shy, unassuming, far quieter than Jay, he was adept at turning around troubled businesses. Colson was the first company in the Marmon Group, a holding company which Robert ran and which over time came to own all of the Pritzkers' manufacturing interests. Jay would buy the companies, and Robert would return them to fiscal health. Together, the brothers transformed Marmon into a $6-billion-a-year company, which prospered until 2001, when its earnings took a nosedive, dropping about 60 percent. In early 2002, soon after his daughter Liesel hired attorneys to investigate his handling of her trusts, Robert was forced, after 48 years, out of his job as C.E.O. of the Marmon Group by Tom, Penny, and Nick. Friends say that Robert's illness—he has Parkinson's disease—and his advancing age made the decision to let him go inevitable. But other family members were outraged by the dismissal, particularly so because Robert himself was, according to one close friend, "devastated and very hurt." There was the feeling within the family that the new triumvirate had done something that was out-of-bounds. "Jay and Robert were very close," says one family friend. "If I ever said something that was even a little bit critical of Robert, Jay would say, He's my brother.' And that was the end of the conversation."

Asked, many years ago, what he would do if members of his family began to feud over their fortune, Jay said that, "if we are going to have a problem, it's probably going to be a ne'er-do-well." No Pritzker, he said, "has a right to anything until he has made a contribution doing something and doing it well. He doesn't have to be in the family business. He can be a Yugoslavian-poetry professor. But he had better be a good one." Much as Jay doted on his family, he also expected every one of them to achieve. "With Jay, you had to be the best," says a friend. Says another, "He was a warm, wonderful person, but he was also tough. His standards were very, very high." He adds, "Being No. 1 was very important to Jay." When his youngest son, Danny, wanted to devote his life to music after college, Jay insisted that he go to law school. There were big arguments, recalls one friend, but Jay won. Other friends remember that Tom went to meetings at the office when he was just seven years old, and that they now wonder whether he did so because he was truly interested or merely because he wanted to please his father. In 1972, around Christmastime, Jay's oldest child, Nancy, waited until her family left on a ski vacation and then went to the garage, got into Jay's car, placed a copy of David Halberstam's book The Best and the Brightest at her side, and turned on the engine. She was found later that day, dead at the age of 24. Her suicide was "the most horrendous tragedy of Jay's life," says a friend, adding that it was shortly after Nancy's death that he had his first heart attack. Nancy had suffered from depression, and it is believed that she had been diagnosed as bipolar. But the book she chose to leave beside her—a powerful indictment of America's involvement in Vietnam and of how destructive arrogant overachievers can be— weighed on Jay, says one friend. Was it a message for him? Had he been too tough on his beloved daughter? "He lived every second with guilt about Nancy, but he internalized it, and that created problems with his kids," says a friend. "After the suicide of Nancy," says another, "all the love and everything else was transferred to the next child, Tommy."

There are those who say that had Tom not gone into the family business he would now be, as one puts it, "meditating in Nepal." Serious and shy, much more contemplative than his father, Tom has long been interested in Buddhism. Although Jay was very proud of the articles Tom wrote for scholarly magazines about Asian art, the interest in Buddhism merely amused him. "I remember having lunch with Jay one day," a friend recalls. "And he said that Tom's kids' nanny had died and the children found a frog on the [family] farm and they thought it was her, reincarnated, and so Jay had to catch the frog for them. He thought it was very funny." Tom, one old friend believes, went into the family business largely because his father wanted him to. "One of my earliest memories is of Tom with a clipboard," says a family friend. "Jay would talk, and Tom would write it down. It was Tom's training." Tom joined the family business in 1978, after he had gotten his law and business degrees, and for the next decade he was moved around the Pritzker empire from job to job, his performance closely watched over by Jay. In time, Tom came to win not only his father's trust but his admiration. Jay would boast that Tom's work on deals had brought millions into the Pritzkers' coffers—when he helped take Levitz Furniture public in 1993, for instance, and founded the biotech investment firm Bay City Capital, and got the family to invest $1 million in First Health, a company that today has a market capitalization of nearly $2.5 billion. Jay brought his other two sons into the business as well, but with different results. Danny worked on a few deals, friends close to the family business say, but they did not go well, and eventually he left to start his own record company and a soul-rock band, Sonia Dada, ventures the family financed to the tune of $25 million. John rose quite high in the ranks of Hyatt, but although Jay hoped he would run the company one day, John wasn't interested in making a career of it. He, too, was given family money to found several companies, but, as with Danny's projects, sources say, John's investments—including those in a sporting-goods store and an environmentally friendly train—did not yield much in the way of profits. Jay tested everyone, says Mel Klein, "to see their abilities." "He gave the same opportunity to each family member," Klein says. "He loved his family." But Jay could be blunt, almost cruel, in his assessment of those who didn't excel at making money. "One day we were talking about this venture" in which John was involved, recalls a business partner of Jay's, "and he looked at me and said, There is a reason John isn't with us in Chicago, and it's a matter of [his] competency.'" Jay seemed not to understand how cutting this remark was or that it might hurt his son if it got back to him, because he said the same thing to a number of people.

In anointing Tom, Nick, and Penny, some friends say, Jay chose well. In the last few years, Nick has made millions by aggressively expanding the family's huge casino holdings around the world and cutting deals to build new Hyatt hotels. Possibly the toughest of the triumvirate, Penny has spearheaded the growth of the family's commercial-real-estate empire and created Classic Residence by Hyatt, a company that builds and manages high-end housing for the elderly. In a family that favored its sons, Penny had to beg her grandfather A.N. to allow her into the business. He rebuffed her entreaties more than once and, in the end, only agreed to let her work for the company as a secretary. If not as wizardly at deal-making as Jay was, Tom, Nick, and Penny have held their own. It was Penny who dealt with one of the Pritzkers' biggest public embarrassments—the collapse, in 2001, of Superior Bank. Purchased in 1988 by Jay and an old friend of his, the New York real-estate developer Alvin Dworman, the savings bank got into trouble with regulators because of accounting problems with its huge portfolio of loans to low-quality borrowers. For months, the Pritzkers and Dworman fought over who should take the blame, until Penny, friends say, finally decided that the family would pay the entire $460 million fine levied by bank regulators. "It was right after 9/11," says an associate of Penny's, "and she called me and said, My family is not going to litigate with the federal government at a time like this.'"

It was one case where Tom, Nick, and Penny were more conciliatory than was Jay, who for years had fought with the Internal Revenue Service, which more than once charged the family with using its trusts and complicated offshore transactions to avoid paying taxes. The most famous court fight took place after A.N. died, in 1986, at the age of 90. Although he was a billionaire almost twice over, the family claimed that, at his death, A.N. had been worth only $25,000. His estate, they claimed, was too small to owe taxes. At the heart of the Pritzkers' case were the trusts that the family is fighting over today. For years before A.N. died, he had been shifting the family's wealth into numerous trusts in the Caribbean. The I.R.S. called the trusts sham and insisted that the Pritzkers owed the government $53.2 million in taxes. In 1994, however, the government settled with the family, which paid a mere $9.5 million plus interest. At the time, the I.R.S. had been unable to discover exactly how much was in the trusts—the family had made sure they were protected from outside scrutiny. But what the Pritzkers did not foresee was how vulnerable the trusts would be if their family itself did not hold together.

Robert was unhappy in his second marriage, to Liesel's mother, Irene, and that, some friends say, made Jay unhappy as well. It was Jay, one friend says, who more than once arranged, when Robert was hospitalized for intestinal surgery in the late 1980s, for his brother to be unhooked from all the machines and taken to the Palmer House Hilton to see his girlfriend, Mayari Sargent, who is now Robert's wife. When asked about this, a spokesman for Robert said, "We simply do not comment on personal matters. We will not dignify this." But Irene's friends say it was this kind of behavior that made her very angry at the Pritzkers. "They treated her very badly," says someone who is close to Irene, who filed for divorce in 1989 after nine years of marriage. Robert and Irene were officially divorced in 1991, but they continued to fight bitterly over their children for years after that. Liesel was seven when her parents divorced, Matthew nine, and, if the court records are any indication, the two children spent much of their childhood bearing the brunt of their parents' rage. In her filings, Irene accused Robert of being a bad father, whose conduct was "at times … injurious" to his children. She accused him of trying to buy the children's love—with a pet ferret for Liesel and a puppy for Matthew—and blamed Robert for Matthew's health problems. According to Irene's court filings, both children preferred their new stepfather, James Bagley, to Robert—so much so that they had begun to use Bagley's last name. Robert was such a poor father, Irene contended, that by the time Liesel was 10 years old she no longer wanted to see him. "She has no relationship with Robert," Irene told the court in 1994, "nor does she desire one." [#image: /photos/56cc52c2f22538fb7dd84cc3]|||Liesel Pritzker in the 1995 movie A Little Princess.|||Liesel Pritzker in the 1995 movie A Little Princess. From Photofest. According to Robert's filings, his children had been turned against him by their mother and stepfather. Irene, he said, became enraged when Liesel and Matthew spoke about their father or tried to talk with him on the phone; in front of them, she referred to his girlfriend as a "bimbo" and a "slope"—Mayari is part Asian—comments a spokesman for Irene now denies she made. Irene, according to Robert, told her children their father, like all Pritzkers, was a bully. Robert also contended that James Bagley told Liesel that her father was a liar. He said much worse, Irene would later contend, in a filing during her 1997 divorce from Bagley. She charged that Bagley "detested" Robert. Bagley would refer to him as "a Jew pig" and a "manipulative Jew." (Bagley has denied these allegations.) By the spring of 1994, Robert's anger at Irene appears to have boiled over. His attorneys threatened legal action if Liesel and Matthew's school did not stop using "Pritzker-Bagley" as their last name. And when he learned, from a newspaper article, that Liesel was to star in the 1995 Warner Bros. movie A Little Princess without his having been consulted, his lawyers challenged the movie studio. In the end, the children returned to using Pritzker as their name, Liesel was able to star in the movie, under the stage name "Liesel Matthews," and Robert won the right to see his daughter more often. In May of that year, 10-year-old Liesel attended Robert's wedding to Mayari, under a court order.

All of this might have been just another brutal divorce in which the children were used as pawns, except for what happened next. In October 1994, Tom Pritzker and the family's attorney Marshall Eisenberg, who were trustees of all the Pritzker trusts, gave up their control of Liesel's and Matthew's—to Robert. By the following March, Robert had completely emptied out two of his children's trusts. He had also, according to Liesel's lawsuit, reduced the value of several others by selling their assets to trusts held by their cousins for less than market value. In return, according to Liesel's suit, she and her brother were given promissory notes. In the transaction that has sparked the most controversy, Robert took all the assets from two of Liesel's and Matthew's trusts—approximately $4.3 million apiece—and donated them to the Pritzker Foundation. Included in those assets were 52 shares held by each child in H Group Holding—the company that includes most of Hyatt. According to people familiar with the transaction, Liesel's shares were then valued at approximately $143,000—which sources close to the Pritzkers say had been their value when they were acquired by Liesel's trust. Shortly after the shares were donated, however, H Group bought them from the foundation for $94.2 million, more than 600 times their stated value. Liesel's attorneys have suggested that the shares were worth even more than that. They contend that H Group got itself a very sweet deal, and that Liesel's shares—which she wants returned to her—could now be worth as much as $500 million. Irene, friends say, had no idea of what Robert had done—out of anger, they say, at her. She began to suspect something was wrong toward the end of 2001, when Matthew heard his cousins talking about a family agreement to split up the Pritzker fortune, "and how he and Liesel were going to get shortchanged," says a source. Always on her guard with the Pritzkers, her friends say, Irene hired a law firm to investigate the situation. According to Pritzker friends, she would soon stumble onto the chance to take "her revenge" on the family she had come to loathe, something a spokesman for Irene denies, saying, "Liesel's lawsuit has nothing to do with Irene."

Although many of Jay Pritzker's friends say he died believing that his family was at peace and that his wishes would be followed, his closest friends say that is far from the truth. He was too embarrassed, "as a father," says one friend, to tell most people what was happening among his sons. There had been tension even before the 1995 meeting; upset that their brother would be running the business, Danny and John had told their father they wanted to "take their money out," says this friend. The larger allowances and payouts Jay offered in his June 1995 letter did not mollify them. Sometime after the meeting, they came back and, once again, told him they wanted out. To appease them, he gave Danny, John, and Gigi each $30 million. "They were squeezing Jay when he was sick," says another family friend, referring to Danny and John. In 1997, Jay had a stroke, and Tom, Nick, and Penny took over the day-to-day running of the empire. After that, one friend says, Jay's life became miserable. He lost some of his memory. He would go into the bathroom, says one man, "and not be able to find his way out." He couldn't remember deals that he had done. But what upset him most was how angry his younger sons had become. "He was overwrought" about that, says a close friend. After his death, says this friend, the animosity among the sons erupted. "The bitterness was just terrible," the friend says. "It was sibling rivalry taken to the 10th power. It was horrible, just horrible." "You'd be in a room with them, and you could see the tension," says a friend of Tom's. His brothers resented it when Tom would not let them use the Falcon 900 jet; they complained that he blocked charitable donations they wanted to make. They felt that Tom was "arrogant," says a family friend, and they chafed at having to go to him if they needed money. As time went by, friends say, Tom's brothers and a number of the cousins felt they were being excluded from the family business. They also felt that Tom, Nick, and Penny were investing in their own deals, but ignoring those that they brought in.

By the summer of 2000, Danny and John had joined forces with Penny's brothers, Tony and J.B. The two, both of whom are investors, had come to feel as excluded and as concerned about the management of the family business, friends say, as John and Danny. Together, the four of them wrote a letter to Tom, Nick, and Penny, asking to have their concerns addressed. "It was a very conciliatory letter," says one friend. But the two sides hit an "impasse," says this friend, and shortly after that the four cousins hired a top Chicago litigator, who threatened legal action. Soon an entire room at Pritzker Pritzker was filled with boxes of documents. Some say the dissenters were looking for a "smoking gun," a reason to justify breaking up the family's trusts. Others say they were genuinely shocked by what they found in the records—specifically, $480 million that they alleged Tom, Nick, and Penny had paid themselves without anyone's knowledge. They began to lobby the older cousins, and soon had all but Gigi on their side. "These people have more money than they need," says one person. "It wasn't that they wanted more. They became concerned about how Tom, Nick, and Penny were administering the family's money." "They portrayed it as fraud and thievery," says one friend of Jay's, who is among the many who were outraged by the allegations. The $480 million, Jay's business partners insist, was given to Tom, Nick, and Penny over the years by Jay himself. "They were allowed to co-invest in deals and to take pieces of equity in them," says Mel Klein, who was involved in several of those deals. If the cousins got less money, Klein and others say, it was because their deals didn't make nearly as much money as Tom's, Nick's, and Penny's did. Other friends say it wasn't the fact that Tom, Nick, and Penny got more money that upset the cousins, but the sheer magnitude of the amount involved. The cousins, friends say, found no evidence that Jay had authorized payments that even approached $480 million. "They did not feel that what was taken out was equitable or appropriately disclosed," says one friend. In their view, breaking up the empire was the only solution. Tom did not have to bend to his cousins' and brothers' demands. That he did so, friends say, is a sign of how bad things were. As the trustee of nearly all of the family's trusts, Tom had almost unlimited power and could have overridden his brothers and cousins. But they were threatening to sue him and Nick and Penny, and the animosity was tearing the family apart. He feared what the publicity of a court fight would do to his family, and what the infighting would do to his elderly mother. "He was looking for peace at any cost," says one friend of Jay's. "He agonized over this."

The "peace" the cousins arrived at, near the end of 2001, was supposed to have remained a secret. Each of them signed a strict confidentiality pledge, promising never to reveal the contents of the agreement or the events that had led to it. And for almost a year no one outside the family knew of the plan they had decided on. Over the next 10 years, while Tom, Nick, and Penny continued to run the businesses, the family would slowly liquidate many of the Pritzker holdings—by selling a number of companies, trading others among themselves, and taking some, possibly including Hyatt, partly public. They also agreed to take half of the Pritzker Foundation's $600 million in assets and give it to foundations that each cousin would establish. What they didn't count on was that Irene and her daughter would challenge them. Matthew, who wants to maintain a relationship with his family, has so far opted not to sue, and is said to be in settlement talks with the family. But Liesel, whose hostility toward her father never abated, is angrier. "For her, it's a matter of principle," says a friend of Irene's. "The other day," a friend of Robert's recalls, "Robert said, and he didn't say it angrily, because Robert doesn't get angry, but he said, Here my daughter Liesel is suing me. She has $160 million in trusts. I don't have $160 million.' … This whole thing is so sad. I mean, Bob is really shaking badly from Parkinson's now. Even with the medication." Why did Robert empty out his children's trusts? Today that remains a mystery. The family does not dispute the basic facts of Liesel's lawsuit. They argue, as Robert's longtime attorney Lowell Sachnoff explains, that "everything that Robert did was specifically authorized by the trusts and the family's generational plan, and [it is] legal." Their argument is the very one Jay used in 1995, when he laid out his vision of the family's future: the trusts were designed to benefit the family and its businesses, not individual members. To support those goals, the trustees had the power to do almost anything they wished with the trusts' assets. Around 1989, they say, Jay made a decision to move Liesel and Matthew down a generation because, as the products of Robert's late-in-life second marriage, they were so much younger than their cousins and needed less money, in his view. In a remarkable bit of legerdemain, Jay, in effect, made Liesel Robert's grandchild, not his daughter.

There is little doubt that Jay made this decision, and that he knew and approved of what Robert did with his children's trusts. But what is mystifying is why Tom and the family's lawyer resigned as trustees. If diminishing Liesel's and Matthew's trusts was part of a legitimate family policy, why didn't they help implement it instead of turning the job over to Robert? And why did they wait until 1994 to do it? The answers, and the heart of the mystery, lie in Robert's motive. Was he so angry at his children that he punished them by gutting their trust funds? Some friends of the family say they just don't know, but in a recent legal filing Robert's attorneys flatly deny that anger was a motive. One theory is that Jay was planning to reduce Liesel's and Matthew's trusts anyway, but let Robert do it as a means of venting his anger. Either way, if the Pritzkers do not settle with Liesel and Matthew before the case ends up in court, it could turn out to be one of the most riveting trust fights in recent legal history. The Pritzkers contend that Liesel has misunderstood everything. "She regards this as her inheritance, and it is not," says a friend of the family. But that, then, would apply to her 11 cousins as well. The Pritzker fortune was not meant to be their inheritance, either. And yet, that is how they are treating it by breaking it up and grabbing pieces of it for themselves. That they would fight Liesel at all astonishes some people, but that they would cite the rules of the trusts and Jay's wishes in their case against her is considered even more outrageous. The minute they signed the family agreement, they overrode everything that Jay had wanted, and they overrode everything the trusts were established to do. The family argues that Liesel is very well taken care of—she has, they say, $160 million in trusts still in her name, although much of the money has been tied up in long-term loans to cousins' trusts. They say she isn't entitled to a $1.4 billion share of the fortune. Unlike themselves.

Sadly, friends say, the peace that Tom tried to buy with the family agreement never came. Even though John and Danny have said they realize the agreement is the best possible solution, they have also told people they wish they had never signed it. Along with some of their cousins, they continue to criticize the way Tom, Nick, and Penny are running the business. And they continue to voice suspicions about the $480 million paid to the trio. "They are just wild about it," says one man. "There is such bitterness." In some way, the agreement seems to have made things worse. Tom, a friend says, has grown "emotionally sick" over his failure to keep the family together and over what the feuding has done to his mother. Cindy Pritzker, says a friend of hers, has been devastated by the fighting in her family. In January, this friend says, she took several of her grandchildren to the Super Bowl, "trying to create bonds between them even though their parents are feuding. It's been very, very difficult for her. Some of her children have used their children as weapons." Sometime after Jay died, a friend of his visited his grave at Memorial Park Cemetery. "There were all these drawings and cards from his grandchildren on the tombstone," this person recalls, "all these notes to Grandpa.'" When he was alive, "Jay had the power to keep everything together by the sheer force of his incredible personality," says a friend of Robert's. "But no one could replace him." For 100 years, love and money defined the Pritzker family. Now, it seems, there is only money. <a href="/magazine/2007/06/postscript200706">The magazine published a postscript to this article in the June 2007 issue. Suzanna Andrews is a Vanity Fair contributing editor.