DALLAS — Samuel Evans Wyly, a prominent Texas businessman, filed for Chapter 11 bankruptcy in the Dallas Northern District of Texas U.S. Bankruptcy Court but a third attempt to reorganize under Chapter 11 failed and the court rejected the amended plan.
Wyly is vice chairman of the board for Michaels Stores Inc. The bankruptcy filing appears to stem from troubles with the Securities and Exchange Commission (SEC), court documents filed in the Northern District reveal. The bankruptcy filing dates back to October 2014.
In early November, Wyly filed a motion to compromise a controversy with the SEC. That motion was granted and followed by a notice of funds received from Dallas Auction Gallery sale under a motion to sell property under free and clear of liens under Section 363(f).
On Nov. 8, the court ordered Wyly's motion for approval of settlement agreement with the SEC Under Bankruptcy Rule 9019. These filings were made jointly.
The court denied Caroline D. Wyly's reorganization plan for Chapter 11, and would proceed with conversion to Chapter 7 unless provided with an extension good through Nov. 18. There was a joint motion to amend the order modifying the automatic stay for cause to allow the SEC to seek repatriation against the estate of Charles Wyly filed by the SEC Nov. 10, which was granted. The court said the Internal Revenue Service, Wyly and the SEC would need to agree on the extension.
The order also required the parties to "request a status conference with the court before the expiration of the extension period if these parties seek to have this case remain a case under Chapter 11. Upon the failure of the debtor, the IRS and SEC, collectively, must request a status conference prior to expiration of the extension period, the United States trustee shall upload the conversion order no later than Nov. 18, 2016."
Another hearing is scheduled Dec. 5 in Dallas before U.S. Chief Bankruptcy Judge Barbara J. Houser. There are numerous creditors listed within the court documents filed. Wyly is represented by attorneys Josiah M. Daniel III, James J. Lee, Paul E. Heath, Rebecca L. Petereit of Vinson & Elkins LLP.
Wyly, co-founder of Ranger Capital Group, has a long and diverse career in business and has done philanthropy work as well. He was a salesman for IBM in the late 1950s and a sales manager for Honeywell in the 1960s. He has since started and sold several companies worth millions of dollars. He also started the Wyly Foundation, a resource for entrepreneurs.