Bankruptcy Judge Green Lights Sale of Wyly’s Aspen Ranch

© 2015 The Texas Lawbook.

By Mark Curriden

(May 20) – A federal bankruptcy judge gave Dallas entrepreneur Sam Wyly approval Wednesday to put his family’s 245-acre Aspen ranch up for sale for $50 million.

Wyly told U.S. Bankruptcy Judge Barbara Houser of Dallas that he needed to sell the ranch now in order to take advantage of increased real estate prices and strong demand in the marketplace.

Federal regulators opposed the sale at this time, arguing that the ranch is technically owned by limited liability holding companies of which Wyly is the manager. Lawyers for the IRS and SEC said that they worried that proceeds from the sale would end up in offshore trusts in the Isle of Man that are at the heart of the entire controversy that has engulfed Sam Wyly and his now deceased brother, Charles, for years.

Josiah Daniel, a Vinson & Elkins partner who represents Wyly in the bankruptcy, assured Judge Houser that the funds from the sale of the ranch will be placed into an escrow account and under the control and supervision of the court.

Wyly filed for bankruptcy last year after the U.S. Securities and Exchange Commission won a $200 million judgment against him for violating federal securities law. The Internal Revenue Service has since announced that it seeks $3.2 billion in unpaid taxes, interest and penalties against the brothers.

Daniel said that Wyly is appealing the securities judgment and he will fight the IRS, too.

Judge Houser also approved Wyly’s request to loan $645,000 of his bankruptcy estate to help pay for maintenance of the ranch and its six custom built homes while the property is on the market.

Wyly founded University Computing Co. in 1963 with only $1,000 in the bank and grew it into a multi-million-dollar computer services company. In 1967, Sam and Charles purchased the Bonanza Steakhouse chain and expanded it to 600 stores before selling it in 1989. In 1982, the Wylys bought the controlling interest in Michael’s, the craft store chain. It grew from a $10 million in revenue private company in 1982 to a $1.2 billion public company in 2006.

Created during the period 1999 through 2006, “Rosemary’s Circle R Ranch” is a 245-acre family vacation ranch 12 miles from Aspen, Colorado, in the mountain valley of Little Woody creek. It is improved with six homes built during the past ten years plus four restored historic ranch buildings.

The ranch is owned by two Colorado limited liability companies of which Sam Wyly is the Manager. The Wyly family members have made recreational use of the Ranch following completion.

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