The Ondo Finance succession crisis gets messier as Kathleen Allman’s daughter alleges ‘dementia’, alcoholism and reckless spending

The succession conflict at Ondo Finance intensified after founder Nathan Allman’s sudden death without a will in May. A probate court placed his estate with his parents, Kathleen and Lawrence Allman, giving them control of assets that include a controlling equity stake in Ondo and a substantial holding of ONDO tokens. In the weeks after Allman’s death, Ian De Bode assumed the role of acting CEO, triggering competing legal maneuvers.

Kathleen Allman has sued De Bode in Delaware, accusing him of attempting to usurp corporate control and seeking to void what she says were improper compensation awards. According to her complaint, De Bode’s proposed package would have included a $900,000 yearly salary, a $1 million signing bonus, 26 million restricted token units valued at more than $9 million, and grants covering 846,000 shares that would have increased his stake from roughly 0.33% to about 8%.

In response, Allman’s half-sister, Dr. Lani Clinton, and Ondo investor David Chen filed a petition in Hawaii asking a court to establish a limited conservatorship over Kathleen’s share of the estate. Their filing alleges Kathleen suffers from long-standing alcohol use disorder, progressive impairments in executive function and social cognition, and requests medical review for possible dementia. The petition also recounts family disputes and cites incidents it says demonstrate Kathleen’s incapacity, which she denies.

Kathleen’s lawyers provided a statement rejecting the conservatorship petition as baseless and characterized the Hawaii filing as coordinated with interests aligned to De Bode. The Delaware court previously rejected arguments that Kathleen and Tahnee Towill were unfit to serve as directors, according to the filings. Ondo Finance declined to comment and a request for comment from De Bode went unanswered.

The competing actions have introduced parallel litigation in Delaware and Hawaii over who may lawfully control Ondo’s board seats, the validity of recent compensation awards, and stewardship of the founder’s estate. The courts will need to resolve questions about fiduciary appointments, the enforceability of the disputed awards, and allegations regarding Kathleen Allman’s fitness to manage the inherited assets.