Thursday, November 30, 2006

Hanging Out the For Sale Sign

Sad, but true, corporate executives are being required to sell their "trophy properties or luxury toys to pay off legal bills, settle civil lawsuits or meet criminal forfeiture requirements mandated by judges," according to an article in Florida Today ("the Space Coast's daily newspaper") last week.

Among the highlights:

Dennis Kozlowski, the former CEO of Tyco International, Ltd., sold his luxury ski home in Beaver Creek, Colorado (which featured three wine cellars), for $10 million. Two months before that, Kozlowski sold his 130-foot J Class sloop, the Endeavour, for $13 million. His oceanfront mansion on Nantucket, known as Sea Rose Farm, is still on the market for $23 million. Pictured to the left is Koz piloting the Endeavour during happier times.






Bernie Ebbers, the former CEO of WorldCom, sold his Canadian cattle ranch, the Douglas Lake Ranch, for $68.5 million and his Mississippi mansion for $7.5 million. The Douglas Lake Ranch is pictured at left.





Scott Sullivan, the former CFO of WorldCom, sold his 30,000-square-foot mansion in Boca Raton last year for $9 million. The five-building compound has an 18-seat movie theater, two-story boathouse, domed exercise room, art gallery and a wine cellar. The St. Petersburg Times has an in depth article on the house's other features.

Walter A. Forbes, the former chairman of Cendant Corp., has placed his 8-acre estate in New Canaan, Connecticut on the market for $12.5 million (MLS listing here), following his Halloween convictions for conspiracy to commit securities fraud and of making false statements to the Securities and Exchange Commission in connection with a massive fraud that cost Cendant investors $14 billion.

Daily Trivia: The Ebbers ranch was sold to E. Stanley Kroenke, a real estate developer, and owner of the Denver Nuggets, Colorado Avalanche, and part owner of the St. Louis Rams.

1 comment:

Sam E. Antar said...

The forfeiture of personal assets is an effective tool for exacting accountability and responsibility on those who violate the integrity of our financial markets and cause harm to investors and others.

In many cases culpable individuals escape full accountability and responsibility by taking advantage of company indemnification agreements, liability insurance policies, and the deep pockets of less culpable co-defendants such as accounting firms, underwriters, and others.

In the Crazy Eddie fraud case the government and civil plaintiffs took extraordinary steps to recover losses for investors from the culpable members of the Antar family that ruled the company and others.

Many family members who participated in the fraud escaped criminal prosecution. However, the SEC won civil convictions against some of them and gained favorable financial settlements from others.

As a result the culpable Antar family members collectively paid more in damages than they profited on their Crazy Eddie stock sales. The defrauded shareholders received approximately $0.20 to $0.30 per dollar lost which on average is 10 times in excess of what defrauded shareholders normally receive in loss recoveries.

Criminals should never be able to keep the economic fruits of their crimes and must be made to pay from their personal assets the losses they have caused others.

Respectfully,

Sam E. Antar (former Crazy Eddie CFO & ex-felon)