Los Angeles Times - 13.08.2019

C2 TUESDAY, AUGUST 13, 2019 WSCE LATIMES.COM/BUSINESS

BUSINESS BEAT

With opulent homes, a
Caribbean island and a pri-
vate jet to Jeffrey Epstein’s
name, the battle to claim his
assets is on.
Even as questions swirl
around the former asset
manager’s death while in
federal custody, attention
will shift this week to the
next drama: identifying
what’s in his estate, who can
claim his assets and which
jurisdiction takes up the
case. Lawyers seeking com-
pensation for victims of his
alleged sex crimes are call-
ing for a freeze on the estate,
raising the prospect of a le-
gal process that could drag

out for years.

It’s unclear whether Ep-

stein, who wasn’t married

and has no known children,

left a will. What is known is

that his wealth included a

$77-million, 40-room man-

sion on New York’s Upper

East Side, the island of Little

St. James in the U.S. Virgin

Islands, a ranch in New

Mexico and homes in Paris

and Palm Beach, Fla. His

business was registered in

the Virgin Islands.

“It’s going to be incred-

ibly complicated,” said

David Ring, an L.A. attorney

who has represented victims

of sexual abuse and assault.

“It’s going to be a lot of differ-

ent folks who are going to be

battling over this estate and

these assets, and I hope the

victims come out on top. I

think they deserve it. But I

don’t think the estate is just

going to hand it over to

them.”

Epstein’s known relatives

include his brother, Mark, a

niece and a nephew, who live

in New York.

Mark Epstein and a

friend had offered to guaran-

tee a bond as part of his

brother’s bail request, which

was denied.

Jeffrey Epstein was

awaiting trial on federal

charges of sexually traffick-

ing girls when he died Sat-

urday at 66 in an apparent

suicide. Atty. Gen. William

Barr vowed Monday to pur-

sue justice for Epstein’s ac-

cusers and said the federal

prison where Epstein died

had “serious irregularities.”

Although the criminal

case against Epstein closed

with his death, lawyers have

said that any victims may

pursue civil lawsuits against

his estate, a process that

could take years and run up

against laws barring claims

that are too old. A decade

ago, more than two dozen

women reached confidential

settlements with Epstein in

Florida.

Investigators in the cur-

rent case gathered more evi-

dence when they searched

Epstein’s New York town

house after his July arrest,

including photographs of

what appeared to be naked

underage girls.

Attorney Lisa Bloom,

who represents several

women who say Epstein

abused them, called on his

estate’s administrators to

freeze all of his assets.

“Give his entire estate to

his victims,” Bloom said on

Twitter. “It is the only justice

they can get. And they de-

serve it. And on behalf of the

Epstein victims I represent,

I intend to fight for it.”

That will involve trying to

establish the full scope of

what prosecutors called Ep-

stein’s “vast fortune,” which

is more difficult now that

he’s dead. Based on limited

financial records, prose-

cutors estimated he made

$10 million a year and had a

net worth of at least $

million. But details of his as-

sets remained “largely con-

cealed” from the New York

court, according to prose-

cutors, and the judge

scolded Epstein’s lawyers for

providing only a “cursory”

one-page summary of his as-

sets.

Where estate proceed-

ings might play out depends

partly on which of Epstein’s

homes is considered his

main one.

Documents submitted by

his lawyers in a bail request

after his arrest indicated his

primary residence was his

compound on Little St.

James. But New York or

Florida also appears to be

good possibilities.

In New York, primary res-

idence is defined as “the

county where the decedent

lived and considered their

primary home address be-

fore they died.” If a person

had more than one home,

it would be the place

where they “intended to re-

turn.”

Wherever any will is filed,

it would first go through the

probate process, where a

judge determines whether

it’s a valid statement of what

Epstein wanted to happen

with his property after his

death. Once the will is deter-

mined to be valid, the execu-

tor named by the decedent

would be officially ap-

pointed to divide up their es-

tate. It’s unclear whom Ep-

stein designated.

The process would be

overseen by the Superior

Court in the Virgin Islands

and the Surrogate’s Court in

New York. In Florida, the will

would have to be filed by the

executor of the estate within

10 days of receiving notice of

adeath in a court in the

county where the person

lived.

To file the will, the execu-

tor would need the death

certificate from New York

City, which is filed by the

chief medical examiner. Or-

ders for death certificates

can take as long as a month

to process.

Prosecutors moved to

seize Epstein’s assets in-

cluding his New York man-

sion after his arrest, but they

can no longer pursue that

through criminal proceed-

ings because the case

against him has ended.

But they could still seek

to seize individual assets

through a civil forfeiture pro-

ceeding if they determine

that the property was used

to facilitate a crime or was

the proceeds of criminal ac-

tivity, said Sharon Cohen

Levin, a former federal pros-

ecutor who headed the

Southern District of New

York’s money laundering

and asset forfeiture unit.

They would have to file a

complaint against an indi-

vidual asset, such as the New

York house, lay out the basis

for the underlying crime and

the evidence showing it was

committed — similar to the

indictment — and prove how

that asset was used to facili-

tate the crime, Levin said.

Unlike in a criminal case,

prosecutors would have to

prove only that the crime

more than likely occurred,

not that it was beyond a rea-

sonable doubt.

“It could literally be the

same case,” Levin said.

“Maybe there are other peo-

ple they might be charging.

There might be other theo-

ries. But this is something I

would assume they would be

seriously considering.”

Dolmetsch writes for

Bloomberg.

THE ESTATE of Jeffrey Epstein, the financier accused of sex crimes, is said to include this $77-million, 40-
room mansion on New York’s Upper East Side. He apparently killed himself Saturday in a jail in New York.

Kevin HagenGetty Images

Untangling Epstein’s estate

‘incredibly complicated’

Lawyers for his

accusers want his

assets to be frozen,

potentially dragging

out the legal process.

By Chris Dolmetsch

Subscription box start-up Loot Crate Inc. filed for

Chapter 11 bankruptcy with plans to sell itself after run-

ning low on cash.

The Los Angeles company ships curated fan boxes

filled with “geek and gamer products” to subscribers each

month, Chief Restructuring Officer Stuart Kaufman said

in a court declaration filed in Wilmington, Del. The con-

tents include figurines, shirts, gear, gadgets and limited-

edition collectibles tied to science fiction, gaming, sports

and pop culture. They’re shipped to more than 250,000 re-

curring subscribers, court papers show.

But the company is in dire financial straits. Its credit

card processor is withholding customer billings, Loot

Crate hasn’t shipped goods tied to $20 million in sales,

and the company owes more than $30 million in trade

debt, Kaufman said. It’s also behind on more than

$5.87 million in sales taxes.

The company dismissed about 50 people last week and

now has about 60 full-time employees. It’s seeking to sell

itself quickly during bankruptcy.

Loot Crate is one of many subscription box services

that have gained popularity in recent years, including

food box seller Blue Apron Holdings Inc. and fashion

service Stitch Fix Inc.

Loot Crate was co-founded in 2012 by Christopher

Davis, who owns a stake of just over 50%. Within a few

years it was ballyhooed as the nation’s fastest-growing

start-up, but soon serious cracks began to show.

The firm defaulted on a loan from Breakwater Man-

agement in 2017 but was able to refinance it with a $21-mil-

lion term loan from an Atalaya Capital affiliate in August

2018. Another entity, Money Chest, has bought that loan
      and agreed to provide a $10-million bankruptcy loan to
      Loot Crate.
      A firm tied to Money Chest and “one of the largest and
      best-run collectible manufacturers and distributors in
      the world” has agreed to act as the stalking horse bidder
      for Loot Crate, Kaufman said. Terms of the deal will be
      submitted to the court this week, the company said in a
      statement.

Geek gear seller

Loot Crate files

for Chapter 11

bloomberg

Verizon Communications Inc. agreed to sell the blog-

ging platform Tumblr to Automattic Inc., the latest sign

the wireless giant is dismantling its online empire.

Terms of the transaction weren’t material, Verizon

said, suggesting Tumblr sold for a tiny fraction of the $1.

billion it fetched in 2013. A report by Axios put the price at

“well below” $20 million. Verizon acquired the site as part

of its 2017 purchase of Yahoo.

Automattic already owns a group of publishing sites,

including WordPress and Longreads, and sees Tumblr as

a good fit. The Wall Street Journal previously reported on

the sale, saying that Automattic would take on about 200

staffers.

For Verizon, the sale marks a further retrenchment. It

has been cutting staff at its online media division, which

was previously called Oath.

“Today’s announcement is the culmination of a

thoughtful, thorough and strategic process,” Guru

Gowrappan, Verizon Media’s chief executive, said in a

statement Monday.

Verizon had originally set out to turn a patchwork of

dot-com brands into a thriving online advertising busi-

ness, but the strategy never caught fire. And the carrier’s

new CEO is refocusing on what the company does best:

wireless service.

Last year, it wrote down the online business by $4.6 bil-

lion. That erased almost half the value of the entity, which

is also home to AOL and the Huffington Post.

Tumblr was founded in 2007 and gained popularity

with teens and young adults. By the time Yahoo bought it

in 2013, it had grown to more than 100 million users and

was something of an open frontier for content, from por-

nography to poetry — but its revenue stream was far from

robust. Founder David Karp had hesitated to run conven-

tional online ads, telling the Los Angeles Times in 2010

that he was “pretty opposed to advertising. It really turns

our stomachs.”

Under Yahoo, even as ad revenue rose and the user

base grew, the platform struggled to make money. In re-

cent years, users have complained that not enough has

been done to limit hateful posts or swarms of porn bots.

Moritz writes for Bloomberg.

Tumblr is sold as

Verizon regroups

By Scott Moritz

Small-satellite launch firm Vector Launch Inc. has

paused operations because of a “major change in financ-

ing,” it said.

Vector said Friday that its chief executive, Jim

Cantrell, was no longer part of the company. The presi-

dent of launch services, John Garvey, assumed the role of

CEO, Vector said.

Vector did not respond to questions about whether the

pause in operations resulted in layoffs. In addition to its

Tucson headquarters, the company has an engineering

facility in Huntington Beach.

Founded in 2016, Vector is one of several launch

companies whose business plan centers on launching

small satellites. It is developing a rocket called the Vec-

tor-R, designed to carry satellites weighing 132 pounds or

less.

The company recently won a launch contract with the

U.S. Air Force. Vector said in a statement Friday that a

“core team is now evaluating options” to complete devel-

opment of the Vector-R while supporting the Air Force

and other government agencies.

Satellite launch

firm halts business

By Samantha Masunaga

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