OK. Serious question. Does US trust law allow the trustee to make or even attempt to make large amounts of money out of the trust? GGYC isn't just the defender but they are also the trustee. I know that in the UK, a trustee cannot profit from a trust (other than professional fees, expences etc.) unless they are a beneficiary of the trust and then they must be treated equally to all other beneficiaries.
Pjfranks - I am unaware of any law that requires revenue sharing. Under US law there has to be a duty created by some legal mechanism - 1. in the tort area it is created by the duty to not engage in intentional or negligent conduct under certain circumstances; 2. under contract law under the terms of an enforceable contract - here as I point out the Protocol, (the only contract in this instance),exempts real estate revenues generated by any participant from the contractually provided for sharing, and there is of course no legal requirement that GGYC or anyone else agree to share revenue. So you are stuck with the fiduciary duty claim. This can arise in two ways an express trust - as asserted here and an implied trust, not applicable IMHO as at its heart it requires that a party have received a benefit it was not entitled to, e.g. by misappropriating someone elses' property.
So your statement is circular - under US law you have to have a legal basis for a claim - a breach of fiduciary duty can only arise from 1. the existence of a fiduciary relationship, here the deed of gift; and 2. a breach of that duty. Where is the duty under the DofG - in short where does the DofG require that the Holder share its revenues?
A serious response. I take it the BofFD assertion is that GGYC will be "making" money out of the real estate it, (I assume but do not know that GGYC or an entity it created for the purpose, is the lessee - if it is not, say Oracle Racing is, then there is no issue, as Oracle Racing is not the trustee), has arranged to lease from the City and County of SF to use in connection with the event, and that this constitutes a BofFD? If that is correct I believe that the correct legal analysis is as follows:
Let me re-phrase your assertion - in the US a trustee cannot use trust property, nor can it take an "opportunity" available to the trust and use it for its personal benefit, (e.g. acquiring an asset, and then selling or leasing it to the trust for a profit, or retaining it), such conduct would be improper. But the issue is does this rule cover what is happening here.
What trust property or trust "opportunity" is being used/misused? First, the only property of the Trust is the Cup, and its related intellectual property, e.g. copyrights. Therefore, the real property is not an asset of the Trust, and is not being misappropriated by the trustee. Secondly, the Trust is not a normal commercial trust, in the sense that it holds substantial financial assets for a specific purpose, the only duty of the trustee is to accept a compliant challenge and hold a yacht race, consistent with the terms of the DofG, or as mutually agreed. Under the DofG it does not have the duty to provide berthing or any other facilities to competitors, nor to make arrangements for public viewing of the racing, at least I do not see any such obligations in the wording of the DofG, or historically. Finally, I also doubt the trust,(as opposed to the trustee - although I doubt GGYC has the ability as well), has the ability to develop the real property for either of these purposes, and GGYC not proposing to subleasing the property to the Trust at a profit, thereby generating a profit for the trustee from a trust activity. So I do not see a trust "opportunity" being misused by the trustee - 1. The DofG does not provide a duty to supply the subject amenities to competitors or the public, and 2. the trust does not have the financial ability to do so. (Before we go there - Oracle has no duty to do this either. It may be the chosen defender for GGYC, but does not have any obligation to supply it with real estate financing)
The closest you can get to a BofFD argument is that the trustee is making money off the event, and those funds should go to the Trust, assuming that for purposes of this discussion the activity, real estate development will make money. The difficulty with this is two fold. First, the Trust does not provide for the activity, and the Trust does not have the assets to perform this function, and there is a very serious argument that were the trustee to engage in the activity and burden the Trust with this lease and debt, (we can agree I assume that the trustee does not have an obligation to provide the trust with funds for such an activity), that this would constitute a BofFD. Secondly, assuming that GGYC has leased the facilities, (which makes little or no sense to me, taking on a long term obligation for what may be a short term event - it could lose this time and the Cup go elsewhere), would you assert that if GGYC were to burden the Trust with the lease, (I am assuming a long term lease, as a short term lease would be an even more flagrant BofFD), of the premises, and then have the Trust borrow all or substantially all of funds required to develop these properties for what can only be described as a very limited, special use, that the next holder of the Cup, another yacht club, could not assert a BofFD when having won the Cup it found itself saddled with land it could not use for trust purposes, unless it wanted to keep holding the Cup in SF, and a substantial debt it would have to repay from future Cup revenue? Under the short term lease scenario, it would just end up with the debts, without the land. An even worse result.
If one were to assert that the Trustee had an obligation as a part of the Trust to acquire and make available for the event land for dockage etc and for the public, or even that having chosen to do so it must do so inside the Trust,(something the trustee has never done before as a part of the trust), potentially the Trust would end up with land in several jurisdictions where it would be of limited if any value to by the Trust for trust purposes, with substantial debts. This would distract from its purpose - to provide a challenge cup among foreign nations. Would not the existence of these land holdings and associated debts in the trust have a chilling effect on the willingness of Clubs to challenge?
If you assert that the trustee has the duty to provide at its own expense these types of facilities, then does that not have a chilling effect on the willingness of clubs to challenge? Are we not better able to fulfill the purposes of the Trust by allowing each club who may win the Cup to make whatever arrangements it deems best to hold the races, without burdening the trust with extraneous assets and debts. That is certainly what has occurred in the past. The trust does not hold any land in Valencia, Auckland, San Diego, Perth/Freemantle or Newport, nor does is it indebted for any liabilities related to the facilities provided in those jurisdictions. Each trustee made whatever arrangements it deemed best for holding the event - usually at the expense of taxpayers, and/or the competitors, who arranged for their own facilities.
Given the above it seems to me that the answer is that this trustee has not committed a BofFD assuming is has taken in its own name the lease, and is advancing its own funds for development purposes.
I hope you take this as a serious attempt to answer your question, it was meant as such.