Dueling financial portraits of John Paterakis emerge in legal battle between widow and children over his estate

Firing back at their father’s second wife, two children of the late John Paterakis said in a court filing on Monday that her “defamatory and scurrilous” charges against them in a lawsuit over his fortune are an attempt to “squeeze the estate for far more” than the bakery mogul and Harbor East developer intended to leave her.

“Essentially, Roula [Paterakis] alleges a fraudulent scheme to deprive her of an inheritance,” William J. Paterakis and Venice Paterakis Smith said in a petition to Orphans’ Court of Baltimore County. “Most of the estate planning in question was done long before Roula’s marriage to the decedent, depriving her of any legitimate basis to complain, so she has turned to portraying the decedent and his children in profoundly unflattering terms.”


The petition, which asks for a scheduling conference, is the first legal response from the siblings since Roula Paterakis sought about 1½ weeks ago to remove them as personal representatives of the estate of her husband, who died in October 2016. They had been married just more than 14 months at that point, although they had lived together since 2001.

She responded to the siblings’ petition with one of her own, alleging that they “have committed outrageous and shocking acts requiring their removal.


“It is their demonstrable misconduct, and not the recounting of it, that is ‘scurrilous,’ ” Roula Paterakis’ petition said.

It went on to say that the siblings have “millions of dollars in cash hoards” and other “large sums of money” that belonged to their father.

Two weeks ago, Roula Paterakis filed suit in Baltimore Circuit Court against them, their four siblings, a grandson, a son-in-law and a business associate in Baltimore Circuit Court, saying they concealed much of his wealth to deny her a “rightful share.”

The court documents offer two different financial pictures of John Paterakis.

There is the Paterakis who was awash in cash, stashing millions of dollars in safes and “play money” accounts that he used for gambling or buying expensive gifts, according to his wife’s suit in Circuit Court.

And there is the Paterakis of Orphans’ Court, where his will and other documents filed after his death depict someone whose assets were largely held in trusts rather than cash. His estate was valued at just more than $155,000, including a $99,000 certificate of deposit, some stock and a few income tax refunds.

How much Paterakis left behind after his death at age 87 and how much will go to his second wife are at the crux of this family feud. Paterakis, who turned a small rowhouse bakery into a multi-million-dollar conglomerate and became an influential campaign contributor known as the “bread man” to local and state politicians, lived a life in which personal and financial details were mostly private.

Now, some of that’s becoming public.


“It’s going to be messy,” said Angela Vallario, an associate professor at the University of Baltimore Law School who specializes in trusts and estates.

Any cash a person keeps around must be reported in an estate inventory, Vallario said, and the suit “sure does paint a picture of a man who kept a lot of cash on hand.”

There could be circumstances under which cash would not be listed as part of an estate, another attorney said.

“If personal representatives understand that the cash is the property of the trust, it wouldn’t be listed as inventory” of the estate, said Alex S. Tanouye, a Bethesda-based trust and estate lawyer.

Having assets in a trust, not in the estate that is subject to the judicial review of probate, is not unusual, especially for wealthy people.

“There are legitimate ways to shelter income,” said Bobby Waldrup, accounting professor and interim associate dean of the Sellinger School of Business at Loyola University Maryland. “A billionaire could die with much of his income sheltered.”


Paterakis’ will, submitted to the Baltimore County Register of Wills, offers no details on how he wanted his estate distributed, referring instead to a trust that apparently includes those terms. Such trusts are not public.

“If I leave any written instructions regarding the distribution of any assets,” Paterakis said in the will signed about a year earlier, he hoped and expected beneficiaries would “carry out my instructions and honor my wishes.”

An initial inventory of Paterakis’ estate was filed on February 27, saying it was worth $116,868.56. Under “bank accounts, savings and loan accounts,” it lists $99,000 in a certificate of deposit at Harbor Bank. The only other property listed was $17,856 in corporate stocks — with just more than $17,000 of that in Met Life stock, and the rest in shares of Harbor Bankshares Corp.

On July 19, the Paterakis siblings filed an updated accounting of the estate, adding additional income and subtracting various expenses. The Met Life stock was sold for a more than $2,700 profit, for example, and there were six state income tax refunds from 2012 to 2015 that totaled almost $36,000.

Among the expenses were credit card and medical bills and about $36,500 to a construction company for repairs to Paterakis’ home in Timonium that had been arranged before his death. There were also funeral expenses and probate fees and other administrative costs. The total estate came to $155,354.

According to Roula Paterakis’ lawsuit, that figure should be much greater. She alleges that her husband’s cash, assets and “controlling interest in the H&S Bakery enterprise” are worth more than $1 billion and should be part of his estate. The suit alleges that Paterakis’ children have withheld assets including millions of dollars in “cash hoards” that their father kept in safes and bank accounts.


Documents filed in Orphans’ Court show trouble brewing between Roula Paterakis and her husband’s children by his first wife over the past year. In July, she requested and received 90 additional days to decide if — rather than accepting what she was left in the will — she would choose to take one-third of his estate as allowed by Maryland statute.

On Oct. 11, she sought another three-month extension, citing a dispute over the estate. While she and the estate representatives “have made progress toward resolving that dispute,” she said, “they need additional time to complete their negotiations.”

Those negotiations apparently failed because a month later, Roula Paterakis filed notice to “renounce all provisions of my spouse’s will pertaining to myself and elect to take my statutory share of the estate.”

How much of John Paterakis’ wealth is rightfully a part of his estate and thus subject to his widow’s claim to one-third of it will be hashed out among lawyers and in court.

That there would be a squabble over how Paterakis’ riches is dispersed is “not surprising” given the family dynamics, Tanouye said.

“Speaking from my own practice, the vast majority of elective share cases involve an underlying dispute between the surviving spouse and children from an earlier marriage,” he said.

The Evening Sun

The Evening Sun


Get your evening news in your e-mail inbox. Get all the top news and sports from the

Paterakis married Antoinette “Toni” Apostolou in 1950; they had six children and divorced about 40 years later. He and Roula Passon began dating in 1997, she moved in with him in 2001 and they married in 2015, according to her lawsuit.

“When someone very wealthy gets married late in life, that’s when red flags go up with estate planning attorneys,” Tanouye said. “If there is explicit animosity already, that’s a larger red flag. And if there’s a lot of money that’s at stake, to mix metaphors, that’s almost strike three.

“You’re almost guaranteed litigation,” he said.

Usually there is motivation to handle any disputes without going to court, he said, both to keep from airing any dirty laundry and to preserve as much wealth as possible rather than going through an expensive legal battle.

“They almost always settle,” Tanouye said. “There has to be some amount of money that would make this go away. Are the children willing to give that up to avoid the fight?”

The petition for a scheduling conference filed in Orphans’ Court on Monday indicates the fight may go on for a while. It notes that lawyers on both sides are involved in another legal battle, among the members of the Macht family, one of the area’s largest residential builders and managers, which is scheduled for a six-week trial starting in early February.