Lisa Marie Presley is claiming that her ex-business manager paid himself more than $700,000 per year, while he was losing her $100 million fortune. In a new case filed in Los Angeles Superior Court, Elvis' 50-year-old daughter is alleging that Barry Siegel and his company, Provident Financial Management, "enriched himself with exorbitant fees." She has accused Siegel of "reckless and negligent" investments that ran her $100 million trust fund set up by her father "into the ground." She has just $14,000 left of the trust fund.
The biggest failed investment was in the holding company for American Idol, which ended up going bankrupt. Siegel is countersuing for $800,000 in damages. Siegel also is continuing to insist that it was Presley's uncontrolled spending that bankrupted her trust fund, not his management. Lisa Marie's attorneys have filed a 16-page court filing detailing how well paid Siegel made sure he was.
"Between 2005 and the time of the American Idol bankruptcy, Siegel billed $4.9 million to "manage" the trust, an average annual salary of $701,000 per year. Had Siegel disclosed the trust's true financial condition to Presley and restricted spending to the trust's "income" rather than its principal assets, Presley would have lived comfortably on an annual budget of between $1.5 and $2 million per year, after taxes. On this budget, Siegel's lucrative compensation package would have amounted to between 40 to 50 per cent 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."
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Presley is alleging that Siegel covered up the dire straits of her finances, repeatedly insisting that she was in good shape with her finances, according to the legal documents. Her lawyers referred to a number of emails from Siegel responding to Presley's questions 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 your family," Siegel allegedly told Presley.
Presley fired Siegel in 2015, after she discovered the true state of her trust. He allegedly lost more than $100 million of the trust's net worth over the course of a decade and put the trust into deep debt. The lawsuit blames Presley's losses on Siegel's decision to sell 85% of her trust's stock in Elvis Presley Enterprises (EPE) in 2005. The stake in EPE was the trust's largest asset and worth $100 million at the time. However, the Trust only received $40 million in cash and $25 million in stock in the holding company of American Idol.
When American Idol didn't bring in enough income, Siegel began liquidating other assets of the trust to keep Presley's lifestyle the same as it was before the sale of EPE. Siegel recommended a budget for Presley that was twice her after tax income. According to the filing:
"Ultimately, Siegel allowed Presley to spend $39 million of the $40 million in liquidity that the trust received in the EPE sale in a span of only four years, from 2005 to 2008, even though the trust provided that the assets were supposed to last Presley for the rest of her lifetime and provide security for her children."
The court documents also reveal that Presley lost a ton of money on the American Idol investment as well. After the last season of American Idol aired, the holding company went bankrupt. Lisa Marie's Trust lost $24.5 million of the $25 million in stock that was received in the sale of Elvis Presley Enterprises.
Presley also claimed that her real estate portfolio was also "run into the ground" by Siegel's mismanagement. Two mortgages on houses owned by the trust in Hawaii and Hidden Hills, California were more than the properties were worth in 2010. Despite this, Siegel told Presley she was cleared to spend $9 million on an estate in England. Siegel then structured the transaction of that English property so that her entire trust was collateral for the mortgage with a balloon payment of $6.7 million due in December 2015. The trust was unable to make the balloon payment which put the trust into default and all of its assets at risk—where they remain today.
Presley also alleges that Siegel failed to pay the trust's taxes and as a result, the trust owes millions in back taxes in both the U.S. and U.K.
Lisa Marie Presley is $16 million in debt. Taxes account for $10 million of that. Lisa Marie is also still dealing with her bitter divorce battle from her ex Michael Lockwood, who is asking her to pay him $263,000 a year so he can continue to live in the lifestyle he enjoyed while married to Elvis' daughter. Attempts at settlements have failed and the former couple is set for four day trial in August.
