Landmark list: Minor atop California taxpayer delinquencies

landmarkwithMinorandDanielsonMinor, Danielson, and the Landmark.
PHOTOS BY JAY KUHLMANN, HAWES SPENCER

Halsey Minor, the CNet-founding millionaire whose Midas touch has been tarnished by a series of setbacks including the threat of foreclosure on his Albemarle farm and a work stoppage at what was to be a luxury hotel on the Charlottesville Downtown Mall, now finds himself atop the list of delinquent taxpayers in California.

Minor and his wife, Shannon, had a lien filed against them on July 21 and owe the state $13.1 million for personal income tax, according to the just-published list.

Minor concedes that he has liquidity issues, but he blames them all on Merrill Lynch, the once high-flying Wall Street firm that improperly, Minor alleges, put a billion-dollar freeze on his accounts and liened far more of his artworks than necessary to collateralize his loan, thus setting in motion a cascade of financial woes that include lawsuits from two art auction houses.

"The good news," says Minor, "is I have made a significant amount of money over the last several years, but Merrill has greatly undermined my liquidity."

Merrill–- in the lawsuit it won on a motion for summary judgment–- alleges that Minor simply violated terms of his credit line via spendthrift ways. In October, federal judge Sidney H. Stein ruled that Minor must pay Merrill $21.6 million; and on April 1, Stein tacked Merrill's $1.3 million legal fees onto the amount Minor owes the company that's now part of Bank of America.

On April 1, Stein did give Minor something he wanted: an order directing New York-based Phillips de Pury gallery to sell Minor's artworks rather than letting Christie's, which is embroiled in litigation with the man who also helped create Salesforce.com and Google Voice, handle the sale.

Via a separate lawsuit filed under California consumer law, Minor vows to eventually "own" Merrill. As for his unpaid taxes, Minor says he has been paying them according to a plan.

In another development, Minor has lost another lawsuit. In a March 31 ruling, New York-based federal judge Barbara Jones ordered Minor to pay $6.64 million including interest and legal fees to the Sotheby's auction house.

Sotheby's sued after Minor didn't pay for artworks he agreed to buy at auction. Childe Hassam's "Carriage in Winter," Edward Hicks' "The Peaceable Kingdom with the Leopard of Serenity," and Andy Warhol's "Diamond Dust Shoes," were each sold below the prices Minor agreed to pay. The differences plus collections costs accounted for the amount of the judgment.

For Minor, who had countersued Sotheby's with an attempted class-action case in California, only to see that case thrown out, this latest court action gives the man who saw victory upon victory in the technology business arena, another loss. But, as he has done with Merrill, Minor vows to appeal.

In another development (this time literally), Minor is set to begin a week-long bout of binding arbitration with Lee Danielson, his former developer, over the stalled Landmark hotel. The two feuding businessmen were ordered to arbitration in February by CharlottesvilIe judge Edward Hogshire.

In contrast to federal hearings where lawyers do all the talking, the two California-based men are expected to be in Charlottesville for the arbitration which begins Monday, April 19. For his part, Danielson expresses hope that they'llĀ  get the hotel back underway– and that Minor will pay his taxes.

"California," Danielson quips, "can certainly use the money."

–last updated 11:59am with Sotheby's outcome

11 comments

Rather than going to jail, I think a different fate awaits this pretty boy. He will end up broke, having dissipated his fortune, and there will be no Cnet in his future, as that was just a lucky break.
He will fall and he won't be able to get up and he will talk and people will scoff. And talk about a case of "he must have had it coming".

Our country needs to go back to the old ways in only one simple way: Debtor's prison in Georgia. And the first resident should be none other than Mr. Minor. He has no idea where reality lies.

Mo' money mo' problems

Im sure obama will have a seat for him in his cabinet.

Excuse me, but if you honestly think Halsey Minor should be #1 on the list, you have no idea where reality lies.

It seems to me true wealth is not needing a line of credit.

I own nothin to nobody and and have cash in my pocket...

Did merril lynch freeze "his" billion dollar acount or "his" billion dollar line of credit?

They are in it for the long money not the short money...

Give me ten million and I will never borrow a dime again...

it's way worse than 'lazy' people milking the system. the rich cheat the system Way more than the poor

This is no worse than lazy people milking the system. At least there is drama to this story.

I thought that Georgia was established to provide the poor an alternative to debtor's prison in England. Or were you suggesting that Minor be allowed to farm a plot in place of paying off his creditors?

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