The only daughter of the king of rock says that her former money manager was “reckless and negligent” with investments, while paying himself a hefty $700,000 salary. He’s counter-suing.
Lisa Marie Presley says she’s lost the $100 million-dollar trust fund set up for her by her dad, Elvis Presley, as a result of reckless investments and excessive fees by her former money manager, Barry Siegel. The Daily Mail’s recent article, “Lisa Marie Presley claims her ex-money manager lost $100 million trust fund left to her by Elvis with 'reckless and negligent' investments while paying himself a salary of $700,000.”
Instead of telling Lisa Marie the truth about the investments, Siegel covered up the dire straits of her finances, Presley's lawyers say in court pleadings. Siegel is counter-suing, contending that Presley “squandered” away her fortune, because of her “uncontrollable spending habits.” Siegel wants $800,000 in damages.
Presley’s complaint against Siegel and his company, Provident Financial Management, says that Siegel “enriched himself with exorbitant fees.” She claims that he and his firm ran the $100 million trust fund her father set up for her “into the ground.” What’s now left is just $14,000.
Siegel’s largest investment of the trust funds was in American Idol's holding company, which ended up going bankrupt.
Presley says that despite allowing the trust's assets to be run to ruin, Siegel profited richly from his "service" as trustee. She claims that from 2005 and the time of the American Idol bankruptcy, he billed $4.9 million to "manage" the trust, an average annual salary of $701,000 per year. However, had he disclosed the trust's true financial condition to Presley and restricted spending to the trust's "income" rather than its principal assets, she would have lived comfortably on an annual budget of between $1.5 and $2 million per year, after taxes.
On this budget, Lisa Marie says Siegel's lucrative compensation package would have amounted to between 40% to 50% of Presley's post-tax annual budget—"an amount she undoubtedly would not have agreed to, had she been aware of her true financial condition.”
Instead of telling Presley the truth, Siegel covered up the dire straits of her finances, say her lawyers. Siegel repeatedly told Lisa that she was in "good shape" with her finances, the documents state. Her attorneys cited several emails from Siegel responding to inquiries from Presley about how her trust fund was doing:
“We're in good shape on your finances.”
“We're ok.”
“Be assured that we are doing everything on our end to maintain both your current lifestyle and the future of you family.”
These were what Siegel allegedly told Presley. She fired him and Provident in 2015, after discovering that he had kept her in the dark about the trust's true financial condition.
Papers filed in court by Presley’s attorney claims that Siegel’s 2005 decision to sell 85% of her trust’s stock in Elvis Presley Enterprises (EPE) was blamed for a big part of the loss. Presley lost big when an investment in American Idol’s holding company went bankrupt after the show’s last season.
She also claimed that Siegel ran her trust’s real estate portfolio into the ground. The trust owned two houses in Hawaii and California and both had mortgages worth more than the properties were worth. Siegel agreed that she could afford to purchase an estate in England, with a transaction structured so poorly that the trust could not make a balloon payment and the mortgage on the estate defaulted.
This story illustrates why you should employ only the most trusted individuals to manage the assets that you intend to leave your posterity. Furthermore, naming the right professional trustee to be in charge of trust assets can ensure that such individuals have a fiduciary responsibility to manage trust assets in the beneficiary’s best interests. If you have questions about naming trustees or other fiduciaries for your family’s trust, contact the Soto Law Firm today to discuss your planning options.
Reference: Daily Mail (June 19, 2018) “Lisa Marie Presley claims her ex-money manager lost $100 million trust fund left to her by Elvis with 'reckless and negligent' investments while paying himself a salary of $700,000”
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