Christian Laettner, former Duke basketball player, faces involuntary bankruptcy

Christian Laettner, a former Duke basketball star whose venture into the business world has left a trail of debt and creditors, could be in bankruptcy court soon if he fails to come up with $14.05 million.

Five of his creditors have started involuntary bankruptcy proceedings against Laettner, a Florida resident.

The action comes five months after Phase II of the West Village mixed-use project in downtown Durham sold for $187 million. One of the businesses that received $28.3 million in proceeds from the sale, Fuller Street Development, lists Laettner as a partner, court records show, though it is unclear how much, if any, Laettner personally received from the deal.

Through the bankruptcy filing delivered to one of Laettner’s lawyers last week, the creditors hope to recoup millions in unpaid debt.

The creditors and the amounts they say they are owed are:

?National Servicing amp; Administration, a limited liability corporation based in Minnesota, where Laettner played for the Timberwolves in the NBA: $7,321,230

?Ernest Sims, III, a former Detroit Lions linebacker: $1,482,730

?Jonathan C. Stewart, a Carolina Panthers running back: $3,629,230

?Park Lane, a sports investment firm started by Andrew Kline, who played for the St. Louis Rams.: $236,193; and

?Damp;F DCU LLC: $1,382,545

“We are optimistic that the funds from the sale of the West Village can be used to reach a global resolution with all of Christian’s creditors,” said Hassan Zavareei, a Washington-based lawyer representing Laettner. “As such, the negotiations are ongoing.”

West Village, set amid the new restaurants, homes and shops revitalizing Durham’s downtown, includes 609 apartments and 104,000 square feet of commercial space. The three-phase project was developed by a partnership that was led by Laettner, his former Duke teammate Brian Davis, and Tom Niemann, a Duke business school graduate.

Laettner, 46, earned a total of $61 million as an NBA player, Nonetheless, he has been mired in financial problems related to subsequent real estate projects, including the ambitious West Village.

In 2012, he was sued for $30 million by former Chicago Bulls stalwart Scottie Pippen and others. Shawne Merriman, a former San Diego Charger and Buffalo Bill, also has had to go to court to pursue money he loaned Laettner.

In an unusual twist, Laettner also sued his own real estate company, Blue Devil Ventures, for $10 million.

Laettner has gone before federal judges numerous times asking for extensions and reprieves to settle his debts for real estate projects in Durham, Baltimore and elsewhere.

In April 2015, Laettner was served foreclosure papers on the $3.65 million mansion he owned on the edge of the Atlantic Ocean in Florida.

After 2012 bankruptcy, a sweet comeback for Hostess

How much is a snack-cake maker worth? If its Hostess Brands, which nearly went out of business just four years ago, that would be about $2.3 billion, according to the terms of a takeover deal announced on Tuesday. And it seems the maker of Twinkies, Ho-Hos and Ding Dongs is in far better financial shape ahead of its coming initial public offering than many investors might assume.

Under the deal with Gores Holdings (GRSH), the special-purposed acquisition company established by private equity firm Gores Group will invest $375 million in cash it raised from an IPO in August 2015. Once the deal closes, now set for later this year, Gores Holdings name will change to Hostess Brands, and its stock will trade under a new ticker symbol.

Gores Group CEO Alec Gores and other Gores affiliates, along with Hostess owner C. Dean Metropoulos, will invest an additional $350 million in the deal. Once the transaction is completed, private equity giant Apollo Global Management (APO) and Metropoulos and his family will hold approximately 42 percent of Gores Holdings. Metropoulos will remain Hostess executive chairman and William Toler will continue as chief executive.

Halachic estate planning in a secular world

Proper estate planning ensures that accumulated financial resources continue to provide for loved ones needs without relinquishing control. Caring for family, as one would if alive, is the essence of good planning; it should also provide for potential disability.Thus, proper estate planning involves giving what you have to whom/the way/when you want in accordance with Halacha, while considering disability.

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Hulk Hogan Objects to Gawker CEO Denton’s Bankruptcy Shield

Hulk Hogan, stymied by the bankruptcy filing of Gawker Media in the midst of a legal battle over a sex tape, is fighting back using the tools of Chapter 11 law.

Hogan, unable to collect a $140 million jury verdict against the media- and celebrity-focused site because of the bankruptcy petition it filed June 10, said in court papers filed Tuesday that the company is improperly trying to protect its chief executive and founder, Nick Denton, who is liable for part of the judgment. He also claims Gawker or an affiliate made a $200,000 loan to Dentonin the week leading up to the bankruptcy.

Gawker’s strategy is to sell itself in a court-supervised auction while it pursues an appeal of the judgment, which Hogan won in a lawsuit over the posting of a tape of him having sex with a friend’s wife. If Gawker loses, sale proceeds would go to pay the claims of creditors including Hogan, a professional wrestler and entertainer whose real name is Terry Bollea.

Veteran Law Firm Bankruptcy Advisor Dies at 85

Arthur Olick, a bankruptcy lawyer who advised other fellow lawyers throughout the dissolution of Finley Kumble and other failed firms, has died at 85.

He passed away on July 2 in Bethesda, Maryland from multiple sclerosis, according to a death notice listed by his family.

Olick worked with the law firm of Anderson Kill for most of his career. He joined the firm in 1974 and retired in 2010, the firm said.

In coverage of the Finley Kumble demise in 1988, Olick told the New York Times: Finley Kumble, like Humpty Dumpty, had a great fall, and the egg is splattered all over the ground Hopefully we can put it all back together again, at least to give it a decent funeral.

At the time, Olick represented a handful of Finley Kumbles 250 former partners who faced a $85 million tab owed to banks in the wake of the law firms demise, according to the Times.

Based in New York, Olick was a longtime chair of Anderson Kills bankruptcy and restructuring group, the firm said. He also advised clients throughout other law firm dissolutions, including Mudge Rose Guthrie Alexander amp; Ferdon, Shea amp; Gould and Lord Day amp; Lord.

He was a lawyers lawyer, said Mark Silverschotz, current co-chair of Anderson Kills bankruptcy and restructuring group who worked with Olick on the Finley Kumble case. He was the guy others would call when they had a problem to solve and needed someone brilliant and relentless.

Silverschotz said the Finley Kumble case created a template for the representation of partners in future law firm bankruptcies.

That case was a harbinger of many other cases to follow, said Silverschotz, who said he and Olick represented a group of 15 non-management committee partners including former New York governor Hugh Carey.

Outside of the law firm bankruptcy practice, Olick was well-known in the legal community for his work in the formation of a number of asbestos bankruptcy trusts. And in various commercial matters, some of his clients included Zsa Zsa Gabor, Don McLean and Meatloaf.

Services will be held Thursday at 11 am at Riverside Chapel in Manhattan. Family will be receiving at the Yale Club at 50 Vanderbilt Avenue on Thursday from 5 to 8 pm Donations may be made to Arthurs name to the Multiple Sclerosis Society.

Click here to read his death notice in the Times.

Estate Planning Opportunities with Interests in Private Equity Funds

Typically, the sponsors of private equity funds are focused on the fundraising process and the initial launch of the fund, and little attention is devoted to the estate planning opportunities that may be best exploited at the beginning of the life of the fund. Interests in private equity funds, especially the carried interest, are particularly good assets to transfer for estate planning purposes because of their significant potential for appreciation. This article briefly discusses some of the techniques that can be successful.

The Gift and Estate Taxes

Every person may gift during his or her lifetime or bequeath at his or her death up to US$5.45 million (US$10.9 million for married couples, and indexed for inflation) free from federal gift and estate tax. Any amounts gifted or bequeathed in excess of this exemption are taxed at a maximum rate of 40% (plus any state estate or inheritance tax).

Therefore, it is a good idea for individuals with substantial wealth to begin transferring assets to children or grandchildren so that the assetsand the increase in value on those assetsare not part of their taxable estate. Some of the best assets to gift to maximize the use of the lifetime exemption are those that are discounted for valuation purposes and have the most potential for appreciation.

Transfer of Carried Interests and Capital Interests

A carried interest in a private equity fund is a logical choice to transfer during ones lifetime because of its low value at the formation of the fund and its significant potential for appreciation. A capital interest in the fund does not have quite the same promise for appreciation, but may still be discounted for valuation purposes and will hopefully increase in value. The transfer of carried interests and capital interests involves complex estate and gift tax rules, but if done correctly (and, of course, if the fund is successful), it can produce tremendous results.


There are various techniques that can be used to transfer these interests. Because of certain gift tax rules, in certain circumstances an individual may be required to transfer an equal percentage of both his or her capital interest and carried interestwhat we will refer to as a vertical slicewhen making any transfer. Consideration must also be given to appraisal costs, valuation risks and vesting issues. Finally, most of the techniques involve the use of trusts where the original owner of the assets continues to pay income tax on the assets transferred; therefore, it is important to consider the legislation that is continually proposed that would alter the income taxation of the carried interest.

The following is a very brief summary of four techniques that may be used.

Direct Gift

A simple technique is to transfer a portion of an interest in the fund to a trust for family members (referred to as a family trust). This technique may require gifting a vertical slice of carried and capital interests and can only be completed with interests that are vested. The value of the gift would be determined by an appraiser, and the donors (and possibly his or her spouses) lifetime gift tax exemption(s) would be reduced by the value of the interest transferred. The family trust would be a grantor trust for income tax purposes, which means the donor would remain taxable on the income generated by the family trust and the family trust would grow tax-free. At the time of death of the donor, the assets in the family trust, including any increase in value from the date of the gift (which could be significant if the fund is successful), would not be subject to estate tax.

Sale of Interest

A second option is to sell to a family trust (that has been funded with a certain amount of property) a vertical slice of carried and capital interest in exchange for a promissory note. The benefit of the sale transaction is that any increase in value in excess of the interest rate on the note will be retained by the family trust free from estate and gift tax. The sale of the vertical slice to a family trust will not use any of the donors lifetime gift tax exemption. The sale price must be at fair market value and can only be completed with vested interests.

Grantor Retained Annuity Trust (GRAT)

A GRAT is a trust to which an individual contributes property and retains the right to receive a fixed annunot;ity payment for a specified term of years. The retained annuity is large enough so that the value of the gift to the GRAT is zero. Any appreciation in the value of the assets contributed to the GRAT above the interest rate set by the government each month is transferred to the family trust at the end of the term of the GRAT. In order to use the GRAT technique, often a transfer of a vertical slice of capital and carried interest is required and the interests must be vested.

The most attractive features of the GRAT are:

  • that no lifetime gift exemption is used to create the GRAT, as the value of the gift is zero, and
  • there are no valuation risks.

Cash-Settled Option

The cash-settled option technique allows the transfer of the economics of the carried interest (as opposed to the actual carried interest) without transferring the capital interest, and without having to wait for the carry to vest. An individual would sell an option to the family trust that would allow the family trust to purchase the economics related to a portion of the individuals carried interest.

This technique is particularly effective. However, as with all of the techniques, there are important tax risks to consider.

Same-sex marriage tax and estate planning tips

Thousands of gay and lesbian couples are celebrating wedding anniversaries this year. But they might want to add another momentous date to their calendars: June 26.

Thats the day last year that the Supreme Court declared same-sex marriage legal throughout the United States.

The Internal Revenue Service had been accepting jointly filed federal tax returns from same-sex couples married in states that sanctioned their vows since the High Court struck down the Defense of Marriage Act in 2013. The 2015 Supreme Court decision in Obergefell v. Hodges, however, made taxes less of a hassle for gay and lesbian married couples at the state and federal levels regardless of where they live.

Easier tax tasks

Your marital status on the last day of the year determines your tax-filing status. If you are wed on Dec. 31, then you can either file as married filing jointly or married filing separately. It doesnt matter that you were single for the other 364 days.

And same-sex married couples no longer have to do double duty when it comes to state and federal tax filing. Since the Supreme Court ruling, the joint filing at both levels obviates the need to file differently with a state tax department in a jurisdiction that previously did not recognize the marriages.

Estate planning, too

The historic 2015 marriage ruling also opened up a new world of estate planning for same-sex married couples.

Today, there are opportunities and protections within reach for same-sex couples that were unavailable during most of American history, says John O. McManus, founding principal of the New York/New Jersey-based estate planning law firm McManus amp; Associates.

As the Supreme Court same-sex marriage ruling anniversary approaches, McManus offers some estate planning tips.

Marital deduction plus portability

Same-sex married couples can now take advantage of the unlimited marital deduction from federal estate tax and gift tax for transfers between spouses. This means that, in most cases, one spouse can leave an unlimited amount to his or her surviving spouse without any federal estate tax ramifications.

In addition, the portability provisions of federal gift and estate tax laws generally allow a surviving spouse regardless of gender to use any portion of his or her deceased spouses unused applicable estate and gift exclusion amount. This amount is adjusted annually for inflation. For 2016, the amount that skips these taxes is $5.45 million per spouse.

Greater gift splitting

Same-sex married couples also now can enjoy the benefits of gift splitting, says McManus.

The annual gift exclusion amount currently is $14,000. Now a same-sex husband or wife can, with the consent of his or her husband or wife, give a total as if each spouse contributed half of the amount.

This combining of individual allowances lets married couples increase their total gift tax exemption amount.

Generally, gift splitting requires the filing of a Form 709 Gift Tax Return. However, says McManus, if the split gifts total $28,000 or less to each gift recipient, only the donor spouse is required to file a gift tax return.

Get tax, estate help

Note that some states collect their own taxes on estates, separate from the federal estate tax.

This means that while an estate might not be large enough to attract Uncle Sams attention, a state tax collector could get a sizable amount in taxes if a person hasnt made appropriate estate tax plans.

Your legal residences tax laws are just another reason for all married couples, regardless of gender, to consult tax and estate professionals. The laws are complex and confusing, but at least thanks to the almost 1-year-old Obergefell ruling, all of us married couples face the same hassles.

Happy anniversary!

You can keep up with tax legislation and other tax news, as well as find filing tips, calculators and more at Bankrates Tax Center.

And be sure to follow me on Twitter: @taxtweet.

Estate Planning for an Aging Population

In the United States, were all living longerat least, I plan to do so if at all possible. Today, men live an average of 76 years, while women typically live for 82 years. For comparison, life expectancy in 1950 was just 65 years.

A longer average lifespan has many benefits, but it also means that Americans need more financial support as they age. In 1990, a 65-year-old man would live an average of 15 more years. Today, a 65 year-old man will live an average of 21 more years. If not planned for, those additional years of life can cause significant financial strain and threaten our ability to maintain a high quality of life during retirement. In fact, the American Association of Retired Persons published a study revealing that two out of three Americans are more worried about running out of money than dying.1

And that fear isnt without reason: the Wall Street Journal recently reported that fewer than one in three of us are financially prepared to survive into our 90s. The question, Will my children need to provide financial support? now takes on a much deeper meaning. Our aging population, coupled with changes in our tax structure, has created a significant shift in our clients goals, fears and concerns related to retirement. We must help clients address these new priorities in their estate plans.

In years past, estate plans focused primarily on avoiding or reducing probate and estate tax. However, since the estate tax exemption has been raised to $5.45 million, less than .02 percent of the US population is subject to federal estate tax. Now, our clients should be more concerned with minimizing capital gains and protecting assets to live comfortably in their retirement years.

In light of these concerns, we should see if our clients want to reconsider some of the most common provisions in their estate-planning documents. If theyre planning for retirement, here are three crucial areas they should address.

Take a Second Look at Gift Provisions

Estate plans often include ongoing gift provisions, which allow individuals to give up to $14,000 per year to each done without incurring a gift tax. This is also a commonly used strategy for reducing estate tax. However, with fewer families subject to federal estate tax after the exemption increase, this strategy is less relevant than its been in the past. Ongoing gift provisions can also leave the door open for giftees to take advantage of the giver, increasing the risk of financial elder abuse.

Unless a gift is needed as a way to qualify for Medi-Cal or other public benefits, it may be a good idea for clients to remove the ability to make ongoing gifts from their estate plan. If a gift provision is desired, a more relevant option might be to only permit gifts that would not impede on your clients ability to afford his lifestyle.

Establish Residency Thoughtfully

The varying state income tax rate can have a substantial impact on your clients ability to maintain his desired lifestyle throughout his retirement years. For example, California residents can be subjected to a state income tax as high as 13.3 percent, while just over the border in Nevada, the state income tax is nonexistent. This is an important point for your client to consider when establishing residency.

Determining where someone resides for income tax purposes is a subjective process, one that relies on the concept of a persons domicile: the place where, when absent, the individual would hope to return. Because of this definition, at least one court has held that an estate-planning attorney cant make a change in domicile through a durable power of attorney, because such a decision is based on an individuals intent and is too personal.2 To avoid this limitation, your client can consider changing domicile through a provision in a power of attorney for personal care and an appropriate provision in an advanced health care directive.

Residency may also become an issue when obtaining desired end-of-life care. Residents of five states, including California, presently have access to legal Death with Dignity care. If having that option is important to your client, it may beneficial to change residency.

Consider Retirement Trusts

Your client should consider a retirement trust. They allow children to disclaim all or a portion of the inherited retirement account benefits for their own children. Whats particularly beneficial about this strategy is that it grows on a tax-deferred basis until the account holder is 70.5 years old, when small required minimum distributions (RMDs) begin. With proper planning, each of your clients children can use their own age for the RMD, providing greater growth in value.

For example, my son Patrick is 21 years old. If he inherited a $200,000 IRA from me now, that account could grow to almost $6 million if it grows at an 8 percent rate of return. The numbers here can be truly staggering. Its also important to note that this wealth is better protected from creditors, lawsuits and divorce when compared to wealth transferred through inherited IRAs.

Since theyre living longer, our clients children and heirs will inherit at an older age. Their children may be less likely to need their inheritance for their own retirement; instead, they may be more likely to disclaim their interest in inherited individual, corporate and governmental retirement accounts in order to provide a substantially increased benefit for their kidsour grandchildren.


  1. Reclaiming the Future: Retirement in America will never be the same. Allianz Life Insurance Company of North America. Retirement amp; Planning Tools. Web. 30 June 2016,
  2. Matter of Wilhelm, 134 Misc.2d 448 (1987).

Estate planning: Why a will is so important

OKLAHOMA CITY – When a loved one passes, many families get wrapped up in the details of the funeral.

Once the funeral is over, the families have to deal with their loved ones estate.

If you dont have a will, state law can decide what happens to your belongings.

According to Oklahoma law, spouses would get half of the estate while the other half would go to children, parents or siblings.

The bottom line is that you should have a will to prevent any fighting or legal battles in the future.