CNET founder Minor files for bankruptcy - The Daily Progress: News

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CNET founder Minor files for bankruptcy

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Posted: Wednesday, May 29, 2013 11:07 pm

Dot-com pioneer Halsey Minor, the Charlottesville native and University of Virginia graduate who built a fortune on a tech media website, has filed for Chapter 7 bankruptcy, citing liabilities of $50 million to $100 million and more than 60 creditors.

The move follows protracted court battles over multimillion dollar real estate investments made as the market crashed and the 2008 sale of CNET to CBS for $1.7 billion.

His dramatic fall took its sharpest turn Friday with Minor's Chapter 7 filing in U.S. Bankruptcy Court in Los Angeles. He is seeking protection from law firms, the Colonial Williamsburg Foundation, Albemarle County Finance Department and his ex-wife and current wife, among others.

He cited assets of $10 million to $50 million. Since the sale of CNET, the site he founded in 1993, Minor has become bogged down in a number of costly enterprises, ranging from the failed Landmark Hotel development in downtown Charlottesville to a $35-million investment in a plantation home along the James River.

Both of those purchases were announced in 2007, around the time art auction houses Sotheby's and Christie's took legal action against Minor, according to court records. The following year, a judge ruled that Minor and his trust owed investment firm Merrill Lynch $21.6 million, court filings state.

A check of the California Franchise Tax Board's website displaying the names of the state's top 500 delinquent taxpayers Wednesday afternoon showed Minor atop the list, owing more than $10.8 million. His name was gone from the list by Wednesday evening. Federal tax liens filed in Albemarle County Circuit Court show the Minors owing $18.5 million to the Internal Revenue Service in 2011 and about $13,000 in 2013.

Liens filed against Minor's wages in 2010 show him chipping away at a disputed $6.6 million debt owed to Sotheby's, as his $21 million San Francisco mansion fell into a state of disrepair. Modeled after living quarters on the grounds of the Versailles palace in France, Le Petit Trianon was declared an abandoned building in 2011 by city officials, according to media reports.

"I love being an entrepreneur even though it involves financial risk," Minor said, in an emailed statement. “I have been fortunate enough to play a meaningful role in building great companies like CNET Networks, salesforce.com, Rhapsody, NBCi, the service known as Google Voice and others.

"But if you win some you are going to lose some too," he said. "A case might have been made that I should never have strayed from technology. However, I like doing things outside my comfort zone, and I believe that willingness in part accounts for my tech successes."

The process of dissolving his remaining assets to pay creditors will likely take years, experts said Wednesday.

"In the case of a high-flying business person, it's likely that there's going to be some objections [from creditors]," said bankruptcy attorney Leon D. Bayer, of the Los Angeles firm Bayer, Wishman and Leotta. "People sometimes will make it very hard to discover their true financial affairs."

Under Chapter 7, the most common form of personal bankruptcy, assets are handed over to a trustee who usually sells off what's left to pay creditors, Bayer said. A judge's acceptance of the move depends on whether debts were accrued under honest, good faith circumstances and whether the court finds that money is left to repay creditors. About 1.5 million Americans file for Chapter 7 bankruptcy annually, he said.

The first bills paid with proceeds from the liquidation are generally past-due taxes, any payments owed to employees and any child support or alimony requirements.

"While all men were created equal, creditors weren't," Bayer explained. The majority of Minor's creditors will likely be left saddled with some of the debt, he said.

"By the time a bankruptcy gets filed, all the good assets have been sold off or lost," he said. "At that point, they've been throwing good money after bad for a long time."

Minor's Los Angeles-based attorney, David B. Shemano, could not be reached for comment Wednesday evening.

Atlanta-based developer John Dewberry purchased the Landmark Hotel at auction last June for $6.25 million. Work has not resumed on the incomplete nine story hotel, which was designed to have 100 rooms.

When news emerged last summer that the ongoing legal issues may have allowed the Carter’s Grove property to slip into disrepair, historical preservationists expressed frustration and pushed for action to save and restore the property, action that has since come to fruition.

“The damage was from lack of repair — it’s all been fixed,” said Stanley Samorajczyk, a court appointed trustee for the Carter’s Grove estate. “I’ve had almost no dealings with Mr. Minor. I do not expect Mr. Minor’s bankruptcy to have any impact.”

Carter’s Grove was placed on the market for $14.95 million, according to a report earlier this month from the Williamsburg Yorktown Daily news website.

“As far as Carter’s Grove is concerned, it’s entering a new phase … and we hope that the right buyers come along,” said Ivor N. Hume, a Williamsburg archaeologist.

Charlottesville Mayor Satyendra Huja said on Wednesday that he expects Atlanta firm Dewberry Capital to begin work on the unfinished Landmark hotel project next year.

"It was a disappointment," he said, of the plan's initial failure, "but it is in the past."

"I'm confident that it will get done."

Minor, 48, has also been active in philanthropy, supporting the San Francisco-based nonprofit Kids’ Turn, an organization dedicated to helping children and families navigate parental separation, according to the group's website.

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