Samuel Wyly in Bankruptcy Facing $400 Million Forfeiture 

The U.S. businessman Samuel Wyly, who may have to forfeit as much as $400 million after being found liable for using offshore trusts to hide stock holdings and make illegal trades, filed for bankruptcy.

Wyly, 80, listed assets and debt of $100 million to $500 million each in a Chapter 11 petition yesterday in U.S. Bankruptcy Court in Dallas, where he lives. The technology and retail entrepreneur blamed “massive costs” from a U.S. Securities and Exchange Commission probe and litigation.

The SEC, which sued Wyly in 2010, is Wyly’s second-biggest creditor, with a “disputed” claim of $198.1 million, according to the court papers. Wyly listed the Internal Revenue Service as his biggest creditor, saying the size of that debt, also disputed, is unknown.

A lawyer for Samuel Wyly on Oct. 8 asked Scheindlin to determine whether the forfeiture is consistent with the U.S. Constitution’s Eighth Amendment, which bars the government from imposing excessive fines.

Wyly’s early jobs at International Business Machines Corp. (IBM) and Honeywell Inc. (HON)were followed by a career of developing new companies, including Bonanza Steakhouses, Sterling Software Inc. and Michaels Stores Inc., according to the Chapter 11 petition. Sterling Software was sold for $4 billion in 2000, and Michaels Stores sold for $6 billion six years later, Wyly said in court papers.

His companies created as many as 200,000 jobs and were profitable investments for others, according to the court filings.

 

Source: bloomberg- Samuel Wyly in Bankruptcy Facing $400 Million Forfeiture

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