HighTower Founder Argues That He Is Illiquid
A Chicago judge has issued a contempt order against Elliot Weissbluth, the founder and chief executive of HighTower Advisors, for failing to make a $75,000 payment to his ex-wife after he testified that he has cash-flow problems, according to a copy of the order reviewed by AdvisorHub.
Cook County family court judge Regina A. Scannicchio ordered Weissbluth to be taken into custody if he does not make the late payment, plus $5,035 of interest, by the end of the day on Wednesday, December 6. The payment was due in March as part of his December 2014 divorce settlement.
Weissbluth, who earlier this year negotiated an equity recapitalization and new credit line for the Chicago-based firm, made the payment today, said John Coladarci, the lawyer who represented the executive at a hearing on the missed payment last Wednesday.
Since the divorce, Weissbluth has pledged his HighTower stock to receive personal bank loans of $1.3 million to pay off divorce-related debts, bought a home in Chicago for about $3.7 million with a $14,000 monthly mortgage and a parcel of land in Montana for about $600,000, according to a transcript of the hearing commissioned by the plaintiffs.
Testifying that despite a base salary of about $650,000 and a bonus for his 2016 performance of more than $200,000, he is illiquid, or “negative cash flow,” Weissbluth said he spends 100% of his monthly income on household expenses for himself, his second wife and their blended family of five children.
The executive, who was profiled in a CNBC story last week on how parents should teach children to manage money, attempted to negotiate an installment schedule on the missed payment but his former wife, Simone Singer Weissbluth, rebuffed those attempts, according to her lawyer, Glen Kaufman.
Expressing little patience for his delayed payment, Judge Scannicchio said Weissbluth presented “not one item of testimony” that a check was written and refused, and no “credible testimony” to support his profession of a cash-flow problem.
“Six hundred fifty thousand base salary, multiple investments between the entry of the [divorce] Judgment and the payment, and then subsequent to the payment that was due in March of 2017. This Court finds Mr. Weissbluth’s testimony to not be credible,” she said, according to the transcript.
In a later statement, she said that Weissbluth, who earlier in HighTower’s evolution had hoped to take the company public, had shown contempt throughout the divorce proceedings.
“[H]e continues to have disdain for the process, for the attorneys, for the Court, as if somehow he should be held to a different standard than every other litigant in my courtroom,” she said, according to the transcript. “He fails to realize that he’s treated the same way that the gentleman or woman who doesn’t have a $650,000 a-year base salary is treated; the firefighter, the carpenter, the nurse, the school teacher, the person who has no job at all.”
Weissbluth and his former wife are involved in a custody battle, which may have played a role in his withholding of the March payment after previous years of being current with the divorce terms, according to sources who declined to be named.
HighTower, which has about 190 independent advisers managing about $50 billion in client assets, declined to make executives available to comment.
“Dissemination of information in this case is prohibited by strict orders of the court, which have clearly been violated and breached by this selective disclosure,” said Christian Kemnitz, a partner at the law firm of KattenMuchinRosenman that represents HighTower, in an e-mailed statement.