Michael Hild and his wife Laura are facing a $110 million lawsuit by the Live Well Financial bankruptcy trustee. (BizSense file)
As he awaits sentencing in the criminal trial that found him guilty of a massive bond pricing scheme, Michael Hild has another legal issue to contend with and now his wife has become entangled in the fallout.
The trustee overseeing the bankruptcy of Hilds collapsed Chesterfield-based mortgage company Live Well Financial has filed suit against him, his wife Laura, their various business and real estate holdings, and others, seeking to recoup a total of $110 million in damages for the firms creditors.
Trustee David Carickhoff is looking to place much of blame for the firms demise on the Hilds, claiming Michael looted the once fast-growing reverse mortgage company by masterminding the Ponzi-like scheme and funneling much of the fruits of the fraud to Laura.
Carickhoff also claims that Laura helped her husband in hiding the proceeds of the scheme through more than a dozen LLCs. They used the money and those entities to acquire a collection of real estate and businesses, including dozens of properties on the citys Southside, and a brewery, donut shop and other businesses. The LLCs were all put in Lauras name as federal authorities began zeroing in on the scam, the lawsuit states.
Essentially, the Hild entities functioned like a giant laundry machine, the trustee claims in a 128-page complaint filed last week in federal court in Richmond. Many of the Hild entities conducted no business of their own. They were merely receptacles or conduits for proceeds of Michael Hilds fraud.
Of the millions of dollars that resulted from the bond scheme at Live Well, the trustee claims the Hilds were the biggest beneficiaries, transferring at least $26 million from Live Well to themselves. The filing includes records of hundreds of bank transfers from Live Well to the Hilds and then from them to their businesses.
In addition to extracting monetary damages, the trustee also is looking to take control of the couples business holdings. Carickhoff has asked the court to impose a trust that would hold and maintain the real estate, bank accounts and businesses and other personal property of the Hilds and make those assets of the bankruptcy estate.
The Hilds Dogtown Brewing was open for a time, but has been closed since the start of the pandemic. (Michael Schwartz photos)
That would include wresting control of Church Hill Ventures, which the Hilds used to acquire at least 38 properties in Richmond between 2015 and 2018, using funds that traced back to Live Well. The government found that the Live Well fraud ran from 2014 to 2019.
Also in line to come under the trustees grip is the Hilds Kingfisher LLC and its 17 properties in Richmond, and their Gardenia LLC and its six local properties.
The trustee also wants Andersons Neck Oyster Co., which Hild launched in river country in Shacklefords, Va., and the couples three businesses in Manchester: Butterbean Caf at 1204 Hull St., Dogtown Brewing at 1209 Hull St. and Hot Diggity Donuts at 1213 Hull St.
The lawsuit further claims funds from Live Well were funneled through various LLCs that never actually launched legitimate businesses, including Urban Bleat Cheese Co., Manastoh Brewing, Aragon Coffee Co., Pin Money Pickles and Valentines Meat-Juice Co.
The brewery, donut shop and caf have all been shuttered since the start of the pandemic and the suit claims they werent viable businesses without continued capital that ultimately came from Live Well.
While Laura on paper is the owner of the business entities, Michael held himself out to be part of those ventures, including in media reports. The lawsuit claims Michael transferred ownership of the LLCs to Laura in 2017, as the Securities and Exchange Commission began investigating Live Well.
The lawsuit will attempt to pierce the corporate veil, a move that would allow the trustee to hold Laura equally as liable as Michael.
Hot Diggity Donuts was one of three businesses the Hilds opened along Hull Street in Manchester.
Laura Hild and the Hild entities were necessary to obscure the more than $26 million that Michael Hild looted from Live Well and its creditors, the suit claims.
The complaint also is suing former Live Well CFO Eric Rohr and the head of the companys bond trading department Darren Stumberger. Both men were key witnesses in Michaels criminal trial, have already pleaded guilty to the same fraud charges and are awaiting sentencing.
As a result of their admitted role in the scheme, Rohr received no less than $2.9 million and Stumberger at least $4.1 million from Live Well, the lawsuit claims. It adds that Michael, Stumberger and Rohr used Live Well funds to cover their legal fees related to the collapse of the scheme, to the tune of $3.1 million.
The lawsuit charges Hild, Rohr and Stumberger with breach of fiduciary duty, which would likely trigger insurance policies the company would have held to cover such instances at the time of its collapse. They also face claims of conspiracy, corporate waste and unjust enrichment, all of which caused more than $110 million in damages to the company, the trustee argues.
As for monetary damages, the suit wants a judgment of not less than $27.54 million from the Hilds and their businesses. That would include $26.05 million from Laura individually and $16.96 million from Church Hill Ventures.
It also wants $475,000 from the oyster business, $721,000 from Butterbean, $1.17 million from Dogtown Brewing, $2.11 million from Gardenia, $1.02 million from Kingfisher, and $461,000 from the donut shop.
It wants to hit Hild, Rohr and Stumberger each for their share of $110 million and wants to cancel out the claims Hild and Rohr filed as creditors in the Live Well bankruptcy.
Carickhoff is represented in the litigation by attorneys from Archer & Greiner in Delaware and Blank Rome in Philadelphia.
The Live Well bankruptcy case is playing out in federal court in Delaware, where the company was incorporated.
Its unclear who represents the Hilds in this latest complaint. A message sent to Michaels personal email was not returned as of Tuesday afternoon.
Butterbean Cafe, like the neighboring Hild businesses, has been closed since March.
Michael Hild founded Live Well in 2005, growing it to hundreds of employees at its peak. It was forced into bankruptcyin July 2019 by its three largest creditors, who were left holding the bag on more than $100 million.
Michael was arrested and charged for leading a scheme to defraud the companys lenders by falsely inflating the value of a portfolio of reverse mortgage bonds, in order to induce the lenders into loaning more money to Live Well than they otherwise would have.
He pleaded not guilty and left his fate to a jury in Manhattan federal court. After a three week trial in April, he was found guilty on all five charges he faced, including securities fraud, mail fraud and bank fraud.
The crimes call for a combined maximum of 115 years in prison and maximum fine of $5 million. Hes set to be sentenced Sept. 10, with the ultimate punishment being up to the judge.
Editors Note: In addition to the Hild case, the Live Well trustee filed lawsuits last week against some of the companys former directors and investors, as well as one of its lenders. Stay tuned to BizSense tomorrow for coverage of those cases.
See the original post:
Live Well Financial bankruptcy trustee targets the Hilds in $110M lawsuit - RichmondBizSense
- Boy Scouts' bankruptcy judge approves nearly $250 million in fees - Reuters - October 22nd, 2023 [October 22nd, 2023]
- What CARD's Clean Slate Post-Bankruptcy Could Mean For Autism ... - Behavioral Health Business - October 22nd, 2023 [October 22nd, 2023]
- 8 Senators Ask U.S. Treasury to Consider 'Going Concern' Bid to ... - International Brotherhood of Teamsters - October 22nd, 2023 [October 22nd, 2023]
- A Burger King franchisee gets sold out of bankruptcy, and a big buyer is Burger King - Restaurant Business Online - September 28th, 2023 [September 28th, 2023]
- Furniture-maker Noble House falls into bankruptcy, owes overseas ... - Retail Dive - September 28th, 2023 [September 28th, 2023]
- How to Get Your Own "Free" Private Investigator in Bankruptcy - Ward and Smith, PA - September 28th, 2023 [September 28th, 2023]
- Large Corporate Bankruptcy Filings Surged in First Half of 2023 ... - ABL Advisor - September 28th, 2023 [September 28th, 2023]
- MV Realty Files For Chapter 11 Bankruptcy - The Real Deal - September 28th, 2023 [September 28th, 2023]
- Vesttoo case: Time to "stop litigating and start cooperating" says ... - Artemis.bm - September 28th, 2023 [September 28th, 2023]
- BlockFi Bankruptcy Plan Receives Approval - Watcher Guru - September 28th, 2023 [September 28th, 2023]
- From Bank To Bankruptcy: How This Crypto Scam Toppled A US ... - Bitcoinist - September 28th, 2023 [September 28th, 2023]
- Mainstream Media Objects to Further Customer Data Redactions in ... - Cryptonews - September 28th, 2023 [September 28th, 2023]
- CARD's Founding CEO Returns to the Helm: What's Next for the ... - Behavioral Health Business - September 28th, 2023 [September 28th, 2023]
- "Calvin Klein was once on the verge of bankruptcy": BTS' Jungkook's ... - Sportskeeda - September 28th, 2023 [September 28th, 2023]
- Lerner Family Fight: Father's Actions led to Bankruptcy, son Says - The Real Deal - September 28th, 2023 [September 28th, 2023]
- Mercy Foundation asks court to clarify its role in bankruptcy - The Gazette - September 28th, 2023 [September 28th, 2023]
- Celsius bankruptcy auction nears end, with Fahrenheit in the lead - Reuters - May 18th, 2023 [May 18th, 2023]
- Surge in corporate bankruptcies just the start for debt-loaded firms - Business Insider - May 18th, 2023 [May 18th, 2023]
- 7 Companies Declare Bankruptcy Over Weekend in 15-Year Record - PYMNTS.com - May 18th, 2023 [May 18th, 2023]
- Credit Crunch Fuels 48-Hour Bankruptcy Rush With Seven Filings - Yahoo Finance - May 18th, 2023 [May 18th, 2023]
- Private equity-backed Envision Healthcare files for bankruptcy - Financial Times - May 18th, 2023 [May 18th, 2023]
- Drobo, having stopped sales and support, reportedly files Chapter 7 bankruptcy - Ars Technica - May 18th, 2023 [May 18th, 2023]
- Roxby Bankruptcy Cases Dismissed, Foreclosure Action Expected ... - Wheeling Intelligencer - May 18th, 2023 [May 18th, 2023]
- Voyager bankruptcy plan approved, customers may recover 35.7% of claims initially - Cointelegraph - May 18th, 2023 [May 18th, 2023]
- Bed Bath and Beyond's bankruptcy could help TJ Maxx owner TJX - Yahoo Finance - May 18th, 2023 [May 18th, 2023]
- IronNet: Near-Term Bankruptcy Filing Might Be In The Cards - Sell ... - Seeking Alpha - May 18th, 2023 [May 18th, 2023]
- Filing For Bankruptcy Protection Due To PFAS Litigation Costs - The National Law Review - May 18th, 2023 [May 18th, 2023]
- Full list of retailers that have filed for bankruptcy as shoppers go online to find deals... - The US Sun - May 18th, 2023 [May 18th, 2023]
- Quadriga CX Bankruptcy Claimants to Get 13% on the Dollar - CoinDesk - May 18th, 2023 [May 18th, 2023]
- Sorrento Therapeutics, Inc.'s Bankruptcy Court Orders Brokerage Firms to Credit Dividended Scilex Stock to Customers' Accounts and Sorrento Advises... - May 18th, 2023 [May 18th, 2023]
- Failing ventures and Twitter hiatus spark Tai Lopez bankruptcy ... - Protos - May 18th, 2023 [May 18th, 2023]
- Facing bankruptcy, Highland Park settles lawsuit over seized ... - WXYZ 7 Action News Detroit - May 18th, 2023 [May 18th, 2023]
- Judge in archdiocese bankruptcy case recuses himself over donations scandal - The Guardian US - April 30th, 2023 [April 30th, 2023]
- Revlon Taps New Directors as Lenders Take Control in Bankruptcy - The Wall Street Journal - April 30th, 2023 [April 30th, 2023]
- Opinion: Highland Park shouldn't declare bankruptcy over water debt - Detroit Free Press - April 30th, 2023 [April 30th, 2023]
- In Kolkata, India's new bankruptcy law is put to the test - Financial Times - April 30th, 2023 [April 30th, 2023]
- Judge in Catholic bankruptcy recuses over church donations - The Associated Press - April 30th, 2023 [April 30th, 2023]
- Judge in New Orleans Roman Catholic bankruptcy recuses himself over church donations - PBS NewsHour - April 30th, 2023 [April 30th, 2023]
- Four companies indirectly owned by Berkshire Hathaway file for bankruptcy (NYSE:BRK.B) - Seeking Alpha - April 30th, 2023 [April 30th, 2023]
- Pfizer Buys Lucira Health for $36.4M Through Bankruptcy Auction - GenomeWeb - April 30th, 2023 [April 30th, 2023]
- Bed Bath & Beyond shares drop after it files for bankruptcy protection - Detroit Free Press - April 30th, 2023 [April 30th, 2023]
- Bankruptcy Battle Breaks Out Over Greenwich Village Dev Site - The Real Deal - April 30th, 2023 [April 30th, 2023]
- US companies in distress turn to debt exchanges to dodge bankruptcy - Financial Times - April 30th, 2023 [April 30th, 2023]
- National retailer sold out of bankruptcy, will close remaining South ... - columbiabusinessreport.com - April 30th, 2023 [April 30th, 2023]
- Companies facing bankruptcy do this: Internet irate after Elon Musk led-Twitter reportedly slashed parental leaves - Business Today - April 30th, 2023 [April 30th, 2023]
- Tim Ziss Files For Bankruptcy To Extend Contract For Midtown Office - The Real Deal - April 30th, 2023 [April 30th, 2023]
- Future at Conway plant unclear after bankruptcy - Arkansas Online - April 30th, 2023 [April 30th, 2023]
- J&J Uses Cajoling, $9 Billion Offer to Sell New Talc Bankruptcy - Bloomberg Law - April 30th, 2023 [April 30th, 2023]
- Donald Trump and 5 Other Famous People Who Filed for Bankruptcy and What Happened Next - Yahoo Finance - April 30th, 2023 [April 30th, 2023]
- Beloved retailer and Michaels rival to close nine more stores amid bankruptcy fears see the full list of... - The US Sun - April 30th, 2023 [April 30th, 2023]
- Process - Bankruptcy Basics | United States Courts - March 31st, 2023 [March 31st, 2023]
- 10 years after bankruptcy scare, village is paying $2.5M in cash for new Village Hall - MLive.com - March 31st, 2023 [March 31st, 2023]
- Bankruptcy: What You Need to Know - NerdWallet - February 7th, 2023 [February 7th, 2023]
- DCG Creditor Pact Revealed With Plan to Sell Genesis Trading Unit as Part of Bankruptcy - CoinDesk - February 7th, 2023 [February 7th, 2023]
- Staring Down Bankruptcy, Bed Bath & Beyond Says It Will Sell Stock - The New York Times - February 7th, 2023 [February 7th, 2023]
- Pet store with several Mass. locations files for bankruptcy, will cease operations at end of month - Boston 25 News - February 7th, 2023 [February 7th, 2023]
- What Is Bankruptcy? Forbes Advisor - January 19th, 2023 [January 19th, 2023]
- Filing for Bankruptcy: What to Know | Consumer Advice - January 19th, 2023 [January 19th, 2023]
- Bankruptcy | California Courts | Self Help Guide - January 19th, 2023 [January 19th, 2023]
- Bed Bath & Beyond could file for bankruptcy 'as early as this weekend': Macco CEO - Yahoo Finance - January 6th, 2023 [January 6th, 2023]
- Bankruptcy Basics Glossary | United States Courts - October 23rd, 2022 [October 23rd, 2022]
- Cash crunch caused Thrifty Propane to file for bankruptcy: statement - WJW FOX 8 News Cleveland - October 19th, 2022 [October 19th, 2022]
- Chinese Steel Manufacturers On The Brink Of Bankruptcy - OilPrice.com - October 19th, 2022 [October 19th, 2022]
- Pennsylvania Bankruptcy Court Finds That Consent and Release Do Not Protect Against Wrongful Foreclosure Claim - JD Supra - October 19th, 2022 [October 19th, 2022]
- Congressional Candidate Critical of Loan Forgiveness Sought to Have Student Debt Cleared Via Bankruptcy - NBC4 Washington - October 19th, 2022 [October 19th, 2022]
- Bloomberg Tax Introduces New Portfolio Addressing Employee Benefits and Bankruptcy - PR Newswire - October 19th, 2022 [October 19th, 2022]
- Alex Jones claims bankruptcy: How will Sandy Hook families get paid? - Grid - October 19th, 2022 [October 19th, 2022]
- Bankruptcy - Michigan - October 17th, 2022 [October 17th, 2022]
- PFC to take RattanIndia plant to bankruptcy court this year | Mint - Mint - October 17th, 2022 [October 17th, 2022]
- Significant Fee increases for Bankruptcy and Winding-Up Petitions on the way - Lexology - October 17th, 2022 [October 17th, 2022]
- US Bankruptcy Court NJ - Live Database - October 15th, 2022 [October 15th, 2022]
- It Is Time To Change Bankruptcy Forum Laws - Patent - United States - Mondaq - October 13th, 2022 [October 13th, 2022]
- Judge in Archdiocese of Santa Fe bankruptcy sets proposed timeline to pay abuse victims - Yahoo News - October 13th, 2022 [October 13th, 2022]
- CMS Protests QHC Bankruptcy Plan Will Not Cover $1M Owed to Agency - Skilled Nursing News - October 13th, 2022 [October 13th, 2022]
- As Jury Deliberates In CT, Alex Jones And His Lawyers Are Setting Fire To Each Other In TX Bankruptcy Court - Above the Law - October 13th, 2022 [October 13th, 2022]
- Student loans are notoriously difficult to discharge in bankruptcy. A new bill could change that - Fortune - October 13th, 2022 [October 13th, 2022]
- Pioneering computer science alumnus battles bankruptcy and more on road to graduation - Oklahoma State University - October 13th, 2022 [October 13th, 2022]
- J&J Talc Bankruptcy 'Bad Faith' Claims Go Before Third Circuit - Bloomberg Law - September 20th, 2022 [September 20th, 2022]
- New amendments to bankruptcy code can maximise recovery of stressed assets - DNA India - September 20th, 2022 [September 20th, 2022]
- Judge reports threats, harassment over J&J talc bankruptcy - Reuters - September 17th, 2022 [September 17th, 2022]