Live Well Financial trustee questions Hilds’ efforts to sell assets

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Efforts by Michael Hild and his wife Laura to sell some of their assets have caught the attention of the bankruptcy trustee of Live Well Financial. (BizSense File Photos)

With his criminal case still unsolved, Michael Hild’s battle with the bankruptcy of his bankrupt mortgage company has taken a new turn.

Administrator David Carickhoff, who is handling the Chapter 7 liquidation of Hild’s defunct Live Well Financial, has been suspicious of recent attempts by Hild and his wife Laura to sell off some of their assets, particularly part of their oyster farming business, Anderson’s Neck Oyster Co.

In recent court filings, Carickhoff’s camp claims to have been contacted by a buyer who was in negotiations this summer with Michael to purchase a floating oyster rig from him and Anderson’s Neck.

The buyer, according to Carickhoff, said Michael’s conduct during the sale raised “red flags.” Seemingly unaware of Hild’s legal troubles, the buyer then dug and uncovered details of the ongoing criminal case and bankruptcy proceedings and contacted Carickhoff’s representatives.

News of the attempted sale surprised the trustee and clashed with parts of Carickhoff year-long litigation with the Hilds and their various business entities. So far, the Hilds have successfully pushed that lawsuit back, saying they can’t respond until Michael’s criminal case is resolved. That leaves Carickhoff with two main concerns after discovering the attempted sell.

“The Hilds — including Laura Hild — made two significant representations that informed the trustee’s decision-making in this litigation — representations that now appear to be untrue,” Carickhoff argued in a Sept. 30 filing.

The first of these was that the Hilds provided documents throughout the bankruptcy process to show that Laura had sole management authority over their various business and real estate entities. The Hilds had maintained this position both publicly and in court proceedings in the years following the collapse of Live Well and Michael’s related criminal case.

“But now the Hilds’ lawyer is claiming the opposite – that Michael Hild has actually acted as ‘legal manager of at least two of the Hild entities (one of which probably owns the largest assets) since then. about the past. three years,” Carickhoff said.

Second, argues Carickhoff, is that the Hilds maintained that all of their assets that could be linked to remittances from Live Well were frozen by the government in connection with the criminal case of Michael and that there should be no fear that the assets could be sold without the permission of the bankruptcy court.

“But now, again, the Hild’s lawyer claims the opposite – the Hilds now apparently believe that the government’s restraining order only ‘limits (the Hilds) ability to dispose of certain assets’, but declined to provide details of what these ‘certain assets’ might be.

Michael Hild at his farm Anderson’s Neck Oyster Co.

Carickhoff claims the potential buyer of the oyster equipment informed his office that Hild had produced documents for the sale showing he had been reinstated as manager of the oyster assets in December 2019. This was also news for the trustee and leads him to fear that the Hilds are seeking to avoid responding to the litigation indefinitely while actively selling and hiding assets that could go to creditors.

As a result, the trustee asked the court to compel Laura to submit to an immediate sworn deposition to answer questions about the case.

The Hilds promptly filed their objection on October 14.

“The motion appears to be no more than an attempt to harass Laura Hild and the other Hild defendants and an attempt to end the race…” the fact that Michael’s extended criminal case slow down the bankruptcy process.

The Hilds say in their response that they have the right to sell the assets in question because they previously agreed with the Justice Department about which assets are frozen and which can be sold.

“The Hild defendants have, at all times, acted pursuant to the restraining order,” their response reads.

The Hilds freely admit in filings to handing over management of the oyster assets to Michael to handle the attempted sale, as Laura was unavailable to handle it herself.

They also claim that their efforts to sell the oyster assets were due to a notice from the Virginia Marine Resources Commission that it refused to renew Anderson’s Neck’s license to operate the oyster rig and required that 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 failed due to buyer concerns.

A screenshot from the Anderson’s Neck Oyster Co. website (Courtesy of Anderson’s Neck Oyster Co.)

At the root of this latest skirmish in the bankruptcy case is the slow resolution of Michael’s criminal case.

Since a jury found him guilty in April 2021 of a scheme that caused the collapse of Live Well, Hild has avoided conviction by claiming that his attorney at the time provided ineffective counsel during the three-week trial. He argues that he should be acquitted or at least given a new trial.

These arguments have been pending for more than a year, while all parties wait for the judge’s decision.

Carickhoff filed an initial lawsuit against the Hilds and more than a dozen of their business entities in June 2021. He is seeking to recover tens of millions of dollars in damages from the Hilds, over allegations that Michael siphoned off Live Well’s allegedly ill-gotten gains to Laura. and hid the funds in their various business and real estate entities. The case aims to hold the Hilds financially responsible for the collapse of Live Well and to recover funds for the company’s creditors.

Live Well’s bankruptcy is being played out in federal court in Delaware, while Michael’s criminal case is in federal court in Manhattan.

Carickhoff is represented in this case 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 of Gellert Scali Busenkell & Brown. He declined to comment when contacted earlier this month.

In addition to Anderson’s Neck, Hild-owned business entities involved in the case include Church Hill Ventures, which owns the bulk of their dozens of properties in South Richmond, as well as LLCs for their now-closed businesses. on Hull Street: Butterbean Café, Dogtown Brewing and Hot Diggity Donuts.

Other entities being sued by the trustee are 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.

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