Business

Will claims against Rick Siskey’s widow hold up potential payments to Ponzi victims?

Rick Siskey and his wife, Diane, in a 2010 photo.
Rick Siskey and his wife, Diane, in a 2010 photo. .

Rick Siskey’s widow has pledged nearly $40 million to investors caught up in her husband’s alleged Ponzi scheme, but the money isn’t likely to be paid out until separate claims against her are resolved, according to court documents and the bankruptcy trustee.

Siskey, 58, took his own life in December, days after court filings gave the first public indication that he was under investigation for fraud. An FBI affidavit unsealed in January alleged he was operating a Ponzi scheme for years, costing investors millions.

Soon after her husband’s death, Diane Siskey said she would place $37.5 million – 80 percent of the life insurance proceeds she received – in an escrow account for investors and other creditors. She has also pledged proceeds from the sale of the couple’s SouthPark mansion – $1,822,636 – and money made from an estate auction, including $75,585 from her possessions.

Now investors are waiting for a court-appointed bankruptcy trustee and the administrator of Siskey’s estate to sort through claims submitted by last month’s deadline – and ultimately send out payments. But claims against Diane Siskey, including a lawsuit filed last month by an investment firm and its employees, could complicate that process.

While Diane Siskey has expressed her desire to help investors and creditors, she “also has to resolve certain other claims against her, such as claims made in a recent lawsuit,” Joe Grier, a Charlotte attorney serving as the bankruptcy trustee, wrote this week on a website for Siskey investors. “Release of those funds requires either the formal consent of Mrs. Siskey or litigation.”

Thomas Walker, Diane Siskey’s attorney, told the Observer Wednesday that his client “remains committed to utilizing the money she has voluntarily escrowed to repay investors.” A court filing last month said Diane Siskey wants proceeds to go to creditors “subject to reaching a mutually acceptable agreement.”

In an interview, Grier said he is still evaluating the 262 claims submitted by investors in four Siskey companies. Ultimately, he will file court documents about the claims, including any objections he makes. Claimants can seek a hearing if they disagree with his decisions, and ultimately the bankruptcy court will rule on the claims.

Early indications from attorneys and court documents have suggested investors might be owed around $50 million, not including claims from the lawsuit against Diane Siskey.

“There are a number of pieces that have to fall into place before a distribution (to investors) is made,” Grier said. He said he could not provide a timeline for when his work will be finished.

Lane Williamson, the estate administrator, said he also is still evaluating claims against the estate.

Stone Street Partners, an investment firm once known as Siskey Capital, filed a lawsuit in Mecklenburg County Superior Court last month alleging the company’s association with Siskey has fatally wounded the firm even though its employees knew nothing about Siskey’s wrongdoing. The suit also alleges Diane Siskey “actively participated” in her late husband’s Ponzi schemes, a claim that her attorney says she “adamantly denies.”

Williamson, the estate administrator, said he denied claims made by individuals from Stone Street Partners before the lawsuit was filed. In bankruptcy court, Stone Street and two employees have submitted claims totaling $26.4 million. Jim Smith, an attorney for Stone Street, said his clients’ livelihoods have been “devastated” by their association with Siskey.

Meanwhile, another Siskey estate auction is set to take place Sept. 22 and 23 in Hillsborough. Thousands of bottles of wine are up for sale at the event hosted by Iron Horse Auction Co. and Leland Little Auctions. One bottle is already attracting bids of more than $8,000.

Rick Rothacker: 704-358-5170, @rickrothacker

  Comments