As his criminal case remains unresolved, Michael Hild’s battle with the bankruptcy estate of his collapsed mortgage company has taken a new turn.
Trustee David Carickhoff, who’s handling the Chapter 7 liquidation of Hild’s defunct Live Well Financial, has become suspicious of recent attempts by Hild and his wife Laura to sell some of their assets, particularly parts of their oyster farming business, Anderson’s Neck Oyster Co.
In recent court filings, Carickhoff’s camp claims it was contacted by a buyer who was in negotiations this summer with Michael to purchase a floating oyster platform from him and Anderson’s Neck.
The buyer, according to Carickhoff, said Michael’s conduct during the sale raised “red flags.” Apparently unaware of Hild’s legal troubles, the buyer then did some digging and discovered details of the pending criminal case and the bankruptcy proceedings and reached out to Carickhoff’s representatives.
News of the attempted sale caught the trustee by surprise and conflicted with parts of Carickhoff’s year-long litigation with the Hilds and their various business entities. The Hilds have thus far successfully fended off that lawsuit by claiming they can’t respond until Michael’s criminal case is resolved. That leaves Carickhoff with two main concerns after finding out about the attempted sale.
“The Hilds — including Laura Hild — made two important representations that have informed the trustee’s decision-making in this litigation — representations that now appear to be false,” Carickhoff argued in a Sept. 30 filing.
The first of those was that the Hilds have provided documentation throughout the bankruptcy process to show Laura held sole management authority over their various business and real estate entities. The Hilds had maintained that stance both publicly and in court proceedings in the years since Live Well’s collapse and Michael’s related criminal case.
“But now, the Hilds’ counsel asserts the opposite — namely, that Michael Hild has in reality been acting as the legal ‘manager of at least two of the Hild entities (one of which likely hold the most significant assets) for approximately the past three years,” Carickhoff stated.
Second, Carickhoff argues, is that the Hilds have maintained that all their assets that could be tied back to transfers of funds from Live Well have been frozen by the government as part of Michael’s criminal case and that there should be no concern that the assets could be sold off without bankruptcy court permission.
“But now, again, the Hild’s counsel asserts otherwise — the Hilds apparently now believe that the government’s restraining order only ‘limits (the Hilds) ability to dispose of certain assets,’ but have refused to provide any details on what those ‘certain assets’ might be.”
Carickhoff claims the prospective buyer of the oyster equipment informed his office that Hild produced documents for the sale showing he was reinstated as manager of the oyster assets in December 2019. That also was news to the trustee and leads him to worry that the Hilds are seeking to indefinitely avoid responding to the litigation while actively selling and concealing assets that could go to creditors.
As a result, the trustee has asked the court to force Laura to submit to an immediate under-oath deposition to answer questions about the matter.
The Hilds promptly filed their objection on Oct. 14.
“The motion appears to be nothing more than an attempt to harass Laura Hild and the other Hild defendants and an attempted end run around…” the fact that Michael’s prolonged criminal case is slowing down the bankruptcy proceedings.
The Hilds claim in their response they have the right to sell the assets in question, as they previously came to an understanding with the Department of Justice of what assets are frozen and those that can be sold.
“The Hild defendants have, at all times, acted in compliance with the restraining order,” their response states.
The Hilds freely admit in the filings to signing over management of the oyster assets back to Michael to handle the attempted sale, as Laura was not available to handle it herself at the time.
They also claim their effort to sell the oyster assets was prompted by a notice from the Virginia Marine Resources Commission that it was refusing to renew Anderson’s Neck’s license to operate the oyster platform and was demanding it be removed from the waterway. They included correspondence with the state to prove it.
The Hilds’ attorney also expressed concerns that the trustee’s camp was inappropriately interfering with the Hilds’ communications with third parties. The sale of the oyster equipment ultimately fell through because of the buyer’s concerns.
At root of this latest skirmish in the bankruptcy case is the slow-moving resolution of Michael’s criminal proceedings.
Since a jury found him guilty in April 2021 of a scheme that caused Live Well’s collapse, Hild has avoided being sentenced by claiming his then-attorney provided ineffective counsel during the three-week trial. He argues that he should be acquitted or at the very least be granted a new trial.
Those post-verdict arguments have been pending for more than a year while all sides await the judge’s decision.
Carickhoff first filed suit against the Hilds and more than a dozen of their business entities in June 2021. He seeks to recoup tens of millions of dollars in damages from the Hilds, on claims that Michael siphoned allegedly ill-gotten gains from Live Well to Laura and hid the funds in their various business and real estate entities. The case seeks to hold the Hilds financially responsible for Live Well’s collapse and recover funds for the company’s creditors.
The Live Well bankruptcy is playing out in Delaware federal court, while Michael’s criminal case is in Manhattan federal court.
Carickhoff is represented in the matter by attorneys from Blank Rome, all of whom did not respond to a request for comment.
The Hilds are represented by Delaware attorney Charles Brown III from Gellert Scali Busenkell & Brown. He declined to comment when reached earlier this month.
In addition to Anderson’s Neck, the Hild-owned business entities entangled in the case include Church Hill Ventures, which owns the bulk of their dozens of real estate holdings in South Richmond, as well as LLCs for their now-shuttered businesses on Hull Street: Butterbean Café, Dogtown Brewing and Hot Diggity Donuts.
Other entities being sued by the trustee are the Hilds’ Climax Beverage Co. LLC, Manastoh Brewing LLC, Urban Bleat Cheese Co. LLC, Aragon Coffee Co. LLC, Pin Money Pickles LLC and Valentine’s Meat-Juice Co. LLC.