A charity started by the late co-founder of Subway restaurants said that it will inherit a 50% stake in the multibillion-dollar sandwich chain — a move that could save the family a major tax bill given that the nonprofit is run by his two sons.
Subway, a privately held company that has struggled in recent years, is exploring a sale that some insiders claim could fetch as much as $10 billion, according to a report last month in The Wall Street Journal.
Peter Buck, a nuclear physicist who co-founded Subway along with then-17-year-old Fred DeLuca in Bridgeport, Conn. in 1965, died in 2021 at age 90.
In 1999, Buck and his wife founded the Peter and Carmen Lucia Buck Foundation (PCLB), which backs a variety of causes including land conservation, education, medicine, and journalism.
A copy of Buck’s will obtained by Forbes shows that the Subway co-founder named his two sons — Christopher and William Buck — to the charity’s board of directors. The two sons and Ben Benoit, who is the charity’s chief financial officer, are executors of Peter Buck’s estate, according to Forbes.
The will states that Buck’s personal possessions, including jewelry, cars, and his collections of art, stamps, and coins, would be evenly divided between his two sons.
More importantly, the will stipulates that 50% of the Subway sandwich chain would be handed over to PLCB.
That means Buck’s gift to the charity could be worth as much as $5 billion.
“This gift will allow the foundation to greatly expand its philanthropic endeavors and impact many more lives, especially our work to create educational opportunities for all students, work Dr. Buck cared so deeply about,” Carrie Schindele, the charity’s executive director, said in a statement.
But the move may benefit the family by shielding the sons from a future tax bill if and when Subway is sold.
“The co-founder of Subway leaving his company to a charity run by his sons is a good move to maximize tax savings,” Miles Brooks, the director of tax strategy at Austin, Texas-based crypto platform CoinLedger, told The Post.
“The government provides various tax benefits as a way to encourage people to give money to charities,” Brooks said, including “reducing and removing asset tax liabilities and reducing the taxable value of the estate.”
In September, Yvon Chouinard, the billionaire founder of outdoor apparel brand Patagonia, announced that he would be transferring his family’s ownership stake in the $1.2 billion company to a trust that will use its profit to fight climate change.
The company’s voting stock was transferred to the Patagonia Purpose Trust while non-voting stock was given to Holdfast Collective, a nonprofit devoted to environmental causes.
An analysis by Bloomberg News found that Chouinard likely saved himself from paying more than $700 million in capital gains taxes that he would have had to pay had he sold the company.
In late October, David Green, the 80-year-old founder and CEO of arts and crafts chain Hobby Lobby, said he has relinquished ownership of his multibillion-dollar retail empire because he has “chosen God.”
Green wrote in a Fox News op-ed that he plans on transferring ownership of the company to a trust instead of passing it down to his children. His net worth has been valued by Forbes at $14.8 billion as of Wednesday.
The Post has sought comment from Subway.
“As a privately held company, we don’t comment on ownership structure and business plans,” Subway said in a statement last month when asked about a potential sale.
“We continue to be focused on moving the brand forward with our transformational journey to help our franchisees be successful and profitable.”
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