Free Speech, Due Process and Trial by Jury
A federal bankruptcy judge on Monday ordered Dallas entrepreneur and philanthropist Sam Wyly to pay the Internal Revenue Service $1.1 billion, which is less than half what the federal government originally demanded but it still one of the largest tax judgments ever against a single individual.
U.S. Bankruptcy Judge Barbara Houser released her much anticipated decision last week in the billion-dollar bankruptcy case of Sam Wyly and his sister-in-law Dee. Legal experts say the legal opinion, which is 459-pages long, includes 181,504 words and 1,682 footnotes, masterfully tells the highly complex story of the Wyly brothers and the web of offshore accounts they created in the Isle of Man two decades ago. “This opinion shows that Judge Houser is a brilliant thinker and an excellent writer,” says Dallas bankruptcy lawyer Sid Scheinberg.
U.S. Bankruptcy Judge Barbara Houser, in a 425-page opinion, ruled late Tuesday that Dallas entrepreneurs Sam and Charles Wyly committed tax fraud when they created a series of offshore trusts in the Isle of Man in the 1990s to shield more than $1 billion for the family tax-free.
U.S. Bankruptcy Judge Shelley Chapman in Manhattan ruled Tuesday that Houston-based Sabine Oil & Gas Corp. can reject contracts with two companies that gather, treat and transport oil and natural gas as part of their Chapter 11 restructuring. The decision is a huge blow to midstream energy companies, as these contracts were previously viewed as untouchable in bankruptcy.
Texas business bankruptcies jumped significantly in 2015, but lawyers and financial experts say last year’s increase is nothing compared to the tidal wave of corporate failures headed this way. Forty-eight oil and gas service companies and exploration and production companies filed for bankruptcy during the past 13 months, according to a report by Haynes and Boone. Eighteen prominent bankruptcy experts interviewed by The Texas Lawbook say they expect the number of oil and gas companies in Texas that file for bankruptcy in 2016 to double and that those bankruptcies will cause a domino effect that will spread to other business sectors. The Texas Lawbook provides an in-depth analysis.
Ryckman Creek Resources and its parent, Peregrine Midstream Partners filed for Chapter 11 reorganization earlier this week, following experts’ projection of an uptick in bankruptcy filings by energy companies this year as oil prices remain low.
More than two dozen Texas bankruptcy attorneys predict a 30 percent increase in bankruptcy filings if oil prices remain low, according to a study by HSSK.
A lawyer for Sam and Dee Wyly told U.S. Bankruptcy Chief Judge Barbara Houser that the tax evasion and tax fraud case brought by the Internal Revenue Service is nothing more than “a bunch of sound bites” and allegations that are not based on federal tax law.
A federal bankruptcy judge Wednesday approved the sale of Quicksilver Resources’ U.S. assets to Tulsa-based Bluestone Natural Resources II for $245 million.
U.S. Bankruptcy Chief Judge Barbara Houser told lawyers for Sam and Dee Wyly Wednesday that she has “a lot of heartburn” about some of the tax-free offshore trusts the Wylys established during the 1990s, which the judge said were created based on “flat out lies.”
A lawyer for the Internal Revenue Service on Monday confronted Dallas entrepreneur Sam Wyly with emails and legal memos from 2004 apparently showing that he was interested in knowing the legal and financial ramifications if he renounced his U.S. citizenship. The Texas Lawbook has full coverage of the billion-dollar bankruptcy trial of Sam and Dee Wyly., which is now in its second week.
Dallas entrepreneur Sam Wyly testified Friday that he filed for bankruptcy to force the Internal Revenue Service to “put up or shut up.” The 81-year-old former owner of Michaels Stores
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