Erstwhile billionaire/current Dallasite Sam Wyly has fallen on hard times. The serial entrepreneur, who with his late brother Charles founded Green Mountain Energy and turned Michael's into a $1.6 billion craft-store empire, was recently dinged for around $300 million for illegally hiding financial transactions in offshore trusts to sidestep U.S. regulators and the IRS. This week brought news that the case had forced Wyly to file for bankruptcy. Poor guy.
Now, adding insult to injury, the feds now want Wyly, a man accustomed to burning through $45 million per year, to live on a paltry $10,000 per month.
The Securities and Exchange Commission is insisting on freezing Wyly's assets, with a relatively modest carve-out for the 80-year-old's living expenses, to guard against the possibility that Wyly or his representatives will empty their sundry trusts and accounts to avoid paying his judgment. Already this year, the SEC says, a Wyly-controlled trust has handed out $27 million to several of his nieces.
Wyly, though, isn't quite sure he can survive on a mere $120,000 per year, a number his legal filings call "absurdly low" and "unjust." Add together the monthly bills for landscaping and pool maintenance ($2,500 per month), utilities ($2,500), cable and phone bills ($750), and insurance on his $7.2 million Highland Park home ($4,725), and that money's gone.
Wyly countered the SEC's offer by making one of his own. He would agree to the asset freeze but would need somewhere around $600,000 per month to get by. Only then could he pay the the $30,000 monthly mortgage payment on his wife's Aspen bookstore, cover $7,000 per month for what he described as "humanitarian support provided to elderly family and friends." He also needs to run the family business and pay the salaries of his personal writing assistants and housekeeper, which total $523,345.
The SEC has backed off the $10,000 figure, offering additional carve-outs for medical expenses and legal fees, but not by much. It wants to preserve Wyly's cash so it can get paid.
"Sam Wyly testified that he has always paid his debts," it says in a legal filing. "The SEC continues to believe that Sam and the Estate of Charles Wyly have sufficient global assets to pay any judgment ordered by this Court. Appropriate next steps can be addressed when and if they fail to do so."
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