This article was reprinted from The Wall Street Journal Online.

In the months before he died of complications from prostate cancer, William E. Maritz wrote a private memoir recounting how he had turned tiny Maritz Inc. into a $1.35 billion-a-year business. Credited with coming up with the notion of the gold retirement watch in the early part of the last century, the company sells merchandise and travel packages to employers as bonuses for their sales staffs.

Mr. Maritz, 72 years old at his death last year, also helped spearhead the redevelopment of St. Louis's riverfront and poured $4 million into a program to improve public-school attendance.

But when it comes to his family, Mr. Maritz's legacy is bitter. He failed to halt three generations of feuding over the family-run company his grandfather founded in 1894. The fighting goes back to the 1940s, when Bill Maritz's own father fought with a brother. They ended up splitting the business between them and never spoke again. Mr. Maritz and his brother also stopped speaking after a pitched management battle.

Now his three sons are carrying on the family tradition. They, too, are fighting among themselves for control of St. Louis-based Maritz, which employs about 6,000 people. The prospect of another generation of family discord haunted Mr. Maritz in the days before his death. In an attempt to pre-empt such a battle, he booted his oldest and youngest sons, Peter, 45, and Philip, 41, known as Flip, off the Maritz board and rejiggered a family trust to vest control of the privately-held company in his middle son, Steve, 44.

"I still find it virtually impossible to understand and accept the lack of respect and feeling my two sons, Peter and Flip, have shown me," Bill Maritz wrote at the end of his unpublished memoir. "Removing them from the Maritz board must have hurt them very much, but I believe I did what was best for all of us and for Maritz for the long term."

In early August, Peter, a graduate student, and Flip, a successful investor in luxury hotels, sued Steve, Maritz's CEO, in state court in Missouri seeking access to the company's books and records. Their New York lawyer, Stanley Arkin, says they want either a voice in Maritz's management, or to have their own combined 40% stake bought out at a fair price. They've also offered to buy out Steve, who declined to be interviewed for this story. Steve Maritz controls the other 60% of the company, and he owns 30%, according to his brothers.

This latest salvo between brothers is a reminder of how tensions can erupt into full-scale war when control of a family-run company shifts from one generation to the next. For Maritz family members, each clash in the painful saga is evidence that relationships too often have played second fiddle to the business that has sustained them.

"In the household I grew up in, the business was more important than the family," explains Alice Starek, 38, Bill Maritz's only daughter. Her brother Steve now controls a company valued at roughly $500 million, but Ms. Starek says she sees him "as the big loser. He's got three sons. What's he going to do? Are some of his sons going to end up hating him?"

Their mother, Phyllis Maritz, has another idea. "It would be my greatest hope to see the company sold and out of the family forever," she says. "Then perhaps the family can heal."

Divvying Up the Pieces

A thriving watch and jewelry wholesaler, Maritz Inc. nearly collapsed in 1929 when its founder, Edward Maritz, died and its fortunes were rocked by the Depression. His two sons in the business, James and Lloyd, began selling watches and jewelry directly to big employers as bonuses for sales people. Their theory was that sales people would strive as hard for, say, $1,000 worth of prizes, as they would for $3,000 in cash. "Motivating men to sell your product is our business," became the Maritz motto.

The pitch worked. A maker of straw hats became its first nationwide client in 1931. Ralston Purina Co. and Chevrolet followed, and General Motors Corp. remains a client today. Sales incentive prizes offered by Maritz began to include luggage and other items in the 1930s and 1940s; by the early 1950s, the company added resort and travel packages.

James and Lloyd Maritz ran the company together for about 20 years. But as sales rose after World War II, they began squabbling over how to manage the business. In 1950 they decided to cut the company in half and go their separate ways. James did the divvying. Lloyd, who had mostly run the incentives business, got to choose first. He surprised everyone by picking the traditional, wholesale jewelry operation.

"After that, the James Maritz and Lloyd Maritz families no longer spoke with one another," Bill Maritz wrote in his memoir. Lloyd Maritz died five years later and his business ceased operating.

James Maritz's company prospered, hitting $5 million in sales in 1958 and $11 million in 1960. Two of his sons, James A. Maritz Jr., known as Jim, and Bill, joined the business. Born in the 1920s, Jim and Bill were never very close. "Jim hadn't played any sports in high school and was just a fair student. He only weighed 118 pounds," Bill wrote. He recalled himself as an honor student, outstanding athlete and student-government leader. Bill reported for work at Maritz in 1953, joining his father and brother. He was assigned to work for a sales manager who told him that "he wasn't going to let my dad spoil me as he had spoiled Jim," Bill wrote.

In the 1960s and 1970s, Bill and Jim ran Maritz together, as co-CEOs. Sales approached $100 million in 1970. Then their father was diagnosed with amyotrophic lateral sclerosis. James Maritz, though by 1980 confined to a wheelchair, still came to the office. "He and I were very close. When he could no longer speak, he would painstakingly write me simple notes," Bill wrote. " 'How's business?' ... 'How are you?' ... Jim rarely had time for Dad. Once Dad handed me a note, 'Let's fire Jim.' He felt Jim was disdainful of him and Mom."

In 1981, James Maritz died at age 86. His sons would soon part ways. Jim's son, known as Jimmy, had joined Maritz. According to Bill's account, Jim treated his son like "a crown prince," and wanted him to be named president if Jim should die. Bill, whose son Steve didn't join the firm until 1983, resisted.

In 1982, a year after his father's death, Bill had a massive heart attack at the age of 53. He was a smoker and was under considerable stress. His relationships with his wife, Phyllis, and his brother were deteriorating. "Jim never visited me in the hospital," he wrote.

Phyllis remembers it differently: "Jim did go to see him in the hospital. Bill wouldn't see him. Jim came to our house. Bill wouldn't let me let Jim in. Bill thought Jim caused his heart attack."

Back in the office in January 1983, Bill confronted Jim about their differences. "I wanted to grow the company rapidly and take chances. Jim was much more conservative," Bill wrote. He suggested that one of them remain CEO, and the other take another job within the company. Jim insisted that one of them should leave, according to Bill's recollection.

They each controlled one third of the stock, as did their sister, Jean Hobler. At their urging, she chose a consultant to pick the best leader. The brothers signed undated resignation letters and the consultant set about studying the company. On May 31, 1983, he announced his decision to the brothers in the Maritz boardroom. He'd chosen Bill. "Jim left the room without saying a word," Bill wrote.

The two brothers never spoke again. Jim's son, Jimmy, also left and now imports steel-toed shoes. The company bought back their stock over several years ending in 1989. Jim died in 1994.

Pounding the Table

Alone at the top, Bill pushed for growth. The late 1980s were among Maritz's best years. Net income hit a record $38.5 million in 1989, on sales of $1.05 billion.

But the early 1990s recession hit the company hard, as corporate clients slashed travel and incentive spending. Especially worrisome was that sales incentives were becoming a commodity-type service bought by companies' hard-nosed purchasing departments instead of more free-spending sales executives. There was trouble at home, too. Phyllis and Bill divorced in 1991.

The buyout of Jim left the Bill Maritz and Jean Hobler families each with 50% of the company's stock. In the mid-1980s, the company had begun paying dividends equal to 10% of its net income, a tidy sum in 1989, but less satisfying in fiscal 1992, when profit plunged to $11.4 million.

By Bill's account, the Hoblers were agitating for more income. Jean Hobler, through her son, Peter Hobler, declined to be interviewed. Mr. Hobler says trouble erupted when his mother began asking questions about the way her brother was running the company. "Bill had a big ego. He didn't like to be disagreed with," Mr. Hobler says, recalling his uncle pounding the table and shouting, " 'That's not my opinion. That's a fact.' "

In Maritz fashion, things escalated. "They're the enemy," Bill told the St. Louis Business Journal of his sister's family. After tense negotiations, the Hoblers agreed in 1994 to sell their stake for $62 million.

Cousins Peter Hobler and Peter Maritz had been best friends growing up. Peter Hobler was Peter Maritz's best man at his wedding, and as adults they talked frequently. Mr. Hobler says he was devastated when Bill's sons Peter and Flip sided with their father against the Hoblers. Estranged for seven years, the two Peters recently reconciled.

Alice Starek, the sister of Peter and Flip, had seen enough. "I had fantasies of running that company up until about age 10," she says. Then, "I realized that my brother Steve was the chosen one."

She sold her stock in 1995, taking the price her father offered. She and her husband run a small resort and spa in the mountains above Boulder, Colo. They eat organic food and use a composting toilet. "I've examined all the values I grew up with," she says. "And they're going out the window one by one. We have a family business. I don't see myself passing it on to my children."

A New Generation

Steve, who had joined the company in his mid-20s, became CEO in 1998. His siblings say he is outgoing and, like his father, an aggressive businessman. Peter and Flip were named to the board by their father in 1994, but their father had long made it clear that they would not be welcome in senior management. Peter, now working on a doctorate in public administration at Hamline University in St. Paul, never wanted a career at Maritz, he says. Flip was interested in business, but he recalls his father saying, "No two brothers will ever again work in the company."

Flip set out on his own, and made a fortune as president of Maritz, Wolff & Co., a St. Louis investment firm that owns 18 luxury hotels. Still, he couldn't ignore the troubles at Maritz, he says. He thought the company lacked a clear strategy, that costs were too high, and that it spent too much on civic causes. He began questioning his father and brother.

Flip's "criticisms were sometimes well justified, but his delivery was frequently mean-spirited," Bill wrote in his memoir. In August 1997 he sent a letter to Flip asking him to sell his stock and quit the board. Referring to his heart attack and estrangement from his own brother, Bill wrote, "I want to keep history from repeating itself."

He tried to use a family trust containing Maritz stock as leverage. Bill pointed out that he could rejigger its distribution if he chose to. He signed the letter, "I love you, Dad." Flip didn't sell and he didn't keep quiet.

Bill thought he'd beaten prostate cancer in 1994. But it spread, requiring removal of a kidney and radiation treatment in 1998. That didn't knock it out, either, and Bill embarked on less orthodox treatments.

Around this time, Bill and Flip visited a family counselor together. Peter, who had moved to a Minneapolis suburb, met alone with the counselor at a Burger King in the St. Louis airport, he says. After one visit, though, Bill begged off, finding it painful, Flip says.

Fiscal 1999 was "terrible" for Maritz, Bill wrote, but he and Steve were optimistic about 2000. They were particularly excited about plans to use the Internet to sell sales incentive services to smaller companies, moving beyond Maritz's traditional large-company clientele. Flip was all for it, he says, but he advised his brother Steve to use someone else's capital, bring in an experienced CEO from the outside and to separate the business to protect Maritz, with an initial public offering if possible.

But at a February 2000 board meeting, Flip says, Steve proposed that the Internet venture, eMaritz, be kept in-house. He called for a board vote. Steve's brothers protested.

The meeting was a disaster. "Not only was Flip critical and demeaning of our plans and our people, but Peter joined in and seemed to be trying to outdo Flip," Bill wrote. Flip says his father shouted: " 'This is my company.' " Some board members skipped the customary lunch.

Two weeks later, Bill wrote to Peter, saying he wanted both dissenting brothers to leave the board. "I must solve our problem during my watch, while I'm still alive," he wrote. He warned of "a change in my family inheritance plans" if they didn't comply. He signed off "cheers and love, Dad."

Peter and Flip refused and were removed from the board at a meeting in April 2000. After the vote, they "got up and left without saying an additional word," their father wrote.

EMaritz had fiscal 2002 sales of $1.3 million, compared with the $18.1 million Maritz had projected. It had a loss of $5.5 million for the year, according to company documents.

Bill grew sicker. As his death approached, there was a rapprochement of sorts with Peter and Flip. "I said to him I loved him and, regardless of our differences over business, that love between a father and a son is more important. And all is forgiven," Flip says. "I was holding his hand as he died."

Peter now has memories of "the good Dad and the bad Dad. There is this good person teaching me to ride a bicycle," he says. "And then there is this other person -- absorbed in himself, rigid."

Shortly before he died, Bill disinherited Peter and Flip from an estate they say was worth about $100 million.

After the funeral, where Steve eulogized his father and Ms. Starek read a prayer, Peter and Flip negotiated to sell their stock. They asked Steve for $66 million. His counteroffer was $22 million.

An adviser to Peter and Flip warned Steve about dragging out the dispute. "Peter and Flip will organize a legal team, contract with an investment banking firm or firms, hire a professional public relations firm; all the 'stuff' that goes into these situations," the adviser wrote. "In my opinion, the process will be public, constant, long-term and a pain for all parties."

Steve, one of his advisers wrote back, is prepared for the fight.

By Jeff Bailey, Staff Reporter for The Wall Street Journal.