Investors who lost millions in a Ponzi scheme operated by the late Charlotte businessman Rick Siskey appear to be closer to getting some of their money back.
Three key parties in the case said in a letter this week that they are close to a "comprehensive settlement" that includes an interim payout of $15 million. The money would come from life insurance proceeds that Siskey's widow, Diane, received after his death.
Investors have been waiting more than a year and a half to get any of their money back in a complex case being unwound in federal bankruptcy court.
Trustee Joe Grier and lawyers for Diane Siskey said last month that they had an "agreement in principle" but were still working on the details. That came after the judge in the case in March rejected an interim payout of $10 million, saying the agreement didn't follow bankruptcy court rules.
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The original bankruptcy claims in the case reached about $50 million, but the “base claims” that exclude promised returns and money investors already got back are around $40 million. Grier has indicated that investors could get back their base claims, if not more.
Another key player in the settlement talks is Stone Street Partners, a private equity firm that once counted Rick Siskey as one of its partners. The firm had objected to the $10 million agreement because it excluded claims by the firm and two of its employees.
On Monday, lawyers for Stone Street sent a letter to Grier, Diane Siskey's lawyers and the administrator of the Siskey estate, Lane Williamson, demanding that Diane Siskey immediately release $10 million in life insurance proceeds so it could be distributed to investors.
"This will allow the Trustee to return approximately 30 percent to the investors in the bankruptcy court cases without further delay," attorney Andrew Houston wrote.
Stone Street and its employees would support such a distribution as long as Diane Siskey placed no conditions on the money, the letter said. Some of Stone Street Partners' own investors also invested separately with Siskey.
One of Diane Siskey's lawyers, Matt McGuire, responded with a letter Tuesday on behalf of himself, Grier and Williamson outlining the plan for the $15 million distribution.
"We trust that your clients will be similarly supportive of this interim distribution," McGuire wrote.
Neither Houston nor Jim Smith, another attorney representing Stone Street Partners, could be reached for comment. Grier declined to comment beyond the letter.
Siskey, 58, took his own life in December 2016, shortly after public filings alleged he was involved in fraud. For more than a year, Grier and his team have been working to gather money to return to victims, but so far no payments have been made.
In August, Stone Street Partners and the two employees filed a lawsuit in state court that alleged Diane Siskey "actively participated" in her husband's activities and that insurance company MetLife, which was affiliated with Rick Siskey's former financial services firm, turned a "blind eye" to his wrongdoing.
The suit said the firm and its employees knew nothing about Siskey's illegal activities but have seen their business and their careers devastated after the Ponzi scheme became public. Diane Siskey has denied any wrongdoing, and MetLife has declined to comment. Both are seeking to have the suit dismissed.