Facing $400M judgment, Samuel Wyly seeks Chapter 11 bankruptcy

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Kevin P. Coughlin

Dallas businessman Sam Wyly is seeking Chapter 11 bankruptcy protection. Photographer: KEVIN P. COUGHLIN/BLOOMBERG NEWS.

Lance Murray

Digital Content Producer- Dallas Business Journal

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Dallas businessman Samuel Wyly has filed for Chapter 11 bankruptcy protection in the wake of being held liable for using offshore trusts to conceal stock holdings and avoid tax liabilities -- possibly having to forfeit upwards of $400 million.

Bloomberg reported that in his filing in the U.S. Bankruptcy Court in Dallas, Wyly blamed "massive costs" from the Securities and Exchange Commission investigation and litigation.

The SEC sued Wyly and the estate of his late brother, Charles, in 2010 and a federal jury in May found the Wylys liable. In September, the judge said the penalty and interest could reach $400 million.

Wyly listed assets and debts ranging from $100 million to $500 million each, Bloomberg said.

Wyly listed the SEC as the second largest creditor with a "disputed" claim of $198.1 million, Bloomberg said. He listed the Internal Revenue Service as the largest creditor, but said the amount was unknown.

"While the debtor has substantial assets, he does not have the ability to pay the full amount of all asserted claims at the present time," Bloomberg quoted the Chapter 11 filing.

Lance Murray edits and writes for the DBJ's website and can be reached at 214-706-7106. Subscribe to our email newsletters.