Proposed settlement in Rick Siskey Ponzi case would bring first payments to victims

Proposed settlement in Rick Siskey Ponzi case would bring first payments to victims
Rick Siskey (The Charlotte Observer file photo)

CHARLOTTE, NC (Rick Rothacker/The Charlotte Observer) - Investors in a Ponzi scheme operated by the late Charlotte businessman Rick Siskey would receive nearly $15 million in interim payments under a proposed settlement with his widow, according to documents outlining the deal.

Those payments would account for about 39 percent of each investor's "base claim" and could be paid out as early as July, according to a summary of the agreement among a court-appointed trustee, the administrator of Siskey's estate and lawyers for Diane Siskey.

The proposal contemplates making additional points and aims to avoid lawsuits with Diane Siskey and others. Most of the money would come from nearly $40 million in life insurance proceeds Diane Siskey received after her husband's death.

The plan, filed Friday in bankruptcy court, still needs court approval and requires the conversion of the bankruptcy court case to Chapter 11 from Chapter 7. As part of the Chapter 11 plan, Diane Siskey would receive a "broad release" from any liability, said Joe Grier, the trustee handling the bankruptcy case.

Thomas Walker, an attorney for Diane Siskey, said the proposal was a "step forward" in the process.

Rick Siskey's victims have been waiting more than a year and a half to get any of their money back in a complex case being unwound in federal bankruptcy court. Settlement talks have been in the works for months.

The original bankruptcy claims in the case reached about $50 million, but the "base claims" that exclude promised returns and money investors already got back are around $40 million. Grier has indicated that investors could get back their base claims, if not more.

For years, Charlotte businessman Rick Siskey built a reputation as a savvy adviser to wealthy clients who lived a lavish lifestyle while also giving generously to charity. That all unraveled when he took his own life at age 58 in December 2016 soon after an FBI investigation became public.

Another key player in the settlement process is Stone Street Partners, a private equity firm that once counted Rick Siskey as one of its partners. In August 2017, Stone Street and two of its employees filed a lawsuit that alleged Diane Siskey "actively participated" in her husband's activities and that insurance company MetLife, which was affiliated with Rick Siskey's former financial services firm, turned a "blind eye" to his wrongdoing.

The suit said Stone Street and its employees knew nothing about Siskey's illegal activities but have seen their business and their careers devastated since his scheme became public. Diane Siskey has denied any wrongdoing, and MetLife has declined to comment. Both are seeking to have the suit dismissed.

Stone Street and the employees have sought $26 million in claims in bankruptcy court. But the trustee, estate administrator and Diane Siskey do not see those claims as "allowable," according to the settlement summary. Those claims will be resolved by a separate settlement or in court, it says.

The settlement sets aside money to cover any future litigation and "the ultimate percentage distribution to investors will depend on the claim of the Stone Street claimants," the summary says. The settlement includes $2 million for "administrative expenses."

Lawyers for Stone Street could not be reached for comment.

The bankruptcy plan could be approved this fall, but final payments will likely take several years, the summary says.

The trustee will hold a meeting on the plan 2 p.m. June 20 at the Office of the Bankruptcy Administrator at 402 W Trade St. A court hearing is set for June 25.