The trustee overseeing the Live Well Financial bankruptcy estate wasted little time in seizing upon a long-awaited ruling in the criminal case of the company’s founder, Michael Hild.
Hild’s April 2021 conviction on federal fraud charges was upheld last week after U.S. District Court Judge Ronnie Abrams denied the former CEO’s attempts for a retrial or acquittal.
The next day, David Carickhoff, who has been steering Live Well’s Chapter 7 liquidation since the Chesterfield-based reverse mortgage company collapsed in 2019, used Abram’s decree as ammo to try to speed up a stalled case against Hild in the bankruptcy proceedings.
In a Dec. 8 filing, attorneys representing Carickhoff urged U.S. Bankruptcy Court Judge Laurie Selber Silverstein that the time is now to let the trustee’s case against Hild, his wife Laura and their various businesses move ahead at a more judicial pace.
“The Trustee respectfully submits there is no reason to further delay this adversary proceeding,” the filing states.
Carickhoff first sued the Hilds and more than a dozen of their business entities in June 2021, seeking to hold the couple financially responsible for Live Well’s collapse and recover funds for the company’s creditors.
The suit asked for tens of millions of dollars in damages, on claims that Michael siphoned allegedly ill-gotten gains from Live Well to Laura and hid the funds in various business and real estate entities in Laura’s name. Much of those holdings are tied to real estate and businesses in South Richmond.
The Hilds have successfully kept the trustee’s claims at bay, arguing that the criminal case had to be resolved before any major movements against them in the Live Well case could play out.
A few weeks prior to last week’s ruling, Carickhoff sought to speed up the process after growing suspicious of recent attempts by the Hilds to sell some of their assets, particularly parts of their oyster farming business, Anderson’s Neck Oyster Co.
The trustee’s concerns stem from the fact that the Hilds have maintained that any of 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.
As a result of the attempted sale, 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 claim in a 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.
At a hearing on Nov. 10 related to the potential deposition, Judge Silverstein ordered the Hilds to finally file an answer to Carickhoff’s June 2021 complaint within 30 days. She also said Laura could eventually be deposed by the trustee.
“I think we ought to get the case moving,” the judge said during that hearing. “I think it’s appropriate for a limited deposition to go forward for Mrs. Hild, after an answer is filed.”
Court records show that on Dec. 8, the Hilds’ attorney, Charles Brown of Gellert, Scali, Busenkell and Brown, asked for a two-week extension on the Hilds’ time to respond, which the trustee agreed to.
They’re now set to answer the complaint by Dec. 27, which will be a month prior to Michael’s sentencing date in the criminal case. He faces a combined maximum of 115 years in prison on counts including securities fraud, mail fraud and bank fraud, though his sentence will surely be lower. He also faces a maximum fine of $5 million.
The Live Well bankruptcy proceedings are playing out in Delaware federal court, while Michael’s criminal case is in federal court in Manhattan.
Live Well fell into bankruptcy in 2019, toppled by a bond pricing scheme that led to Michael’s arrest on multiple fraud charges. Live Well’s former CFO and lead bond trader also were charged in the scheme. They pleaded guilty and await sentencing. They also testified against Hild, who was the only player in the scheme to plead not guilty.