Texas tycoon Samuel Wyly has filed for bankruptcy, saying he does not have the assets to pay the nearly $300 million that U.S. regulators are demanding for his role in a fraudulent offshore scheme.
In documents filed with a U.S. bankruptcy court in Dallas on Sunday, Wyly said he had between $100 million and $500 million of both assets and liabilities and cited the "massive costs" of fighting civil claims from the U.S. Securities and Exchange Commission as the reason for seeking Chapter 11 protection.
Last month, U.S. District Judge Shira Scheindlin in New York ordered Wyly and the estate of his late brother Charles to pay damages of $187.7 million plus interest to the SEC, after a jury found them liable for fraud in May.
The SEC has since said the total, including interest, should be $299.4 million, which is one of the largest awards ever sought from individual defendants.
Robert Gemmill, a spokesman for Wyly, said he would not comment beyond the bankruptcy filing. An SEC spokesman declined to comment.
Wyly, 80, last appeared on Forbes' list of the 400 richest Americans in 2010, with a net worth of $1 billion.
In the SEC litigation, his lawyers had warned Scheindlin that a massive judgment would bankrupt him.
But lawyers for the SEC have said in court documents that the Wylys' offshore trusts still hold hundreds of millions of dollars in assets.
The SEC accused the brothers of constructing a complex system of trusts in the Isle of Man that netted them $553 million in untaxed profits through more than a decade of hidden trades in four companies they controlled.
Those companies included Sterling Software Inc, Michaels Stores Inc., Sterling Commerce Inc. and Scottish Annuity & Life Holdings Ltd., now Scottish Re Group Ltd.
Charles Wyly died in a 2011 car crash, and his estate was substituted into the case as a defendant.
The case is In re Samuel E. Wyly, U.S. Bankruptcy Court, Northern District of Texas, No. 14-35043.
