Tony Hsieh’s brother accused of paying himself millions from estate

Recent court documents filed in the legal fight over Tony Hsieh’s estate allege that after the Zappos CEO died, his brother paid himself “several million” dollars from the estate’s money.

The court filing came from attorneys for Tony Lee, Hsieh’s longtime friend and financial manager. Lee sued Hsieh’s estate in April 2021, seeking nearly $7 million over an alleged breached contract, although Lee’s lawyers wrote in court documents filed Monday that the creditor’s claim from Lee’s company could value at more than $16.8 million.

Hsieh was 46 when he died on Nov. 26, 2020, from injuries suffered in a Connecticut house fire. Court documents filed in the legal battle over his estate have alleged that Hsieh spent his final years malnourished, barely sleeping, and hallucinating from ketamine and nitrous oxide use, while making erratic purchases to develop Park City, Utah.

According to court records, Hsieh’s line of credit reached $250 million before his death as he planned elaborate projects in Park City, including a cashless theme park dubbed Country Zero.

Hsieh’s family and his business associates have accused each side of taking advantage of Hsieh financially before his death.

Andrew Hsieh was overseeing his brother’s estate with their father, Richard Hsieh, until a judge granted an order in July allowing Andrew Hsieh to resign as a co-administrator.

During a court hearing on Thursday, District Judge Gloria Sturman granted a motion from Lee to amend the prior order allowing Andrew Hsieh to resign as a co-administrator. The amended order will specify that under Nevada law, resigning as an estate administrator does not absolve him of potential liability in other legal matters involving the estate.

Attorneys previously have alleged that following Tony Hsieh’s death, his brother used money from the estate for personal expenses, including $200,000 for a new Mercedes Sprinter and $100,000 for a “personal nutritionist and training plan.”

In court documents filed Monday, lawyers for Lee wrote that Connie Yeh, Tony Hsieh’s cousin and “longtime designated agent over his financial affairs,” testified in a deposition that Andrew Hsieh submitted invoices to the estate for “several million” dollars from December 2020 to January 2021.

The invoices were for “his claimed management fee concerning the operations in Park City,” according to court records. Andrew Hsieh then approved the invoices on behalf of the estate, Lee’s attorneys wrote.

An attorney for Tony Hsieh’s estate did not reply to a request for comment.

The Hsieh family previously has accused Yeh of doubling her salary during the summer of 2020, when Tony Hsieh was allegedly having a “breakdown” during a trip to Montana.

Lee also alleged in Monday’s filing that there was no indication that Andrew Hsieh believed his brother “lacked the requisite capacity” to approve contracts before his death. Lee alleged that Andrew Hsieh was instrumental in recruiting him to work for Tony Hsieh, and that Andrew Hsieh was negotiating his own $1 million contract with his brother and attempting to increase his compensation through October 2020.

Andrew Hsieh has claimed in court documents that as his brother’s behavior worsened, he planned “quiet trips” for Tony Hsieh to leave Park City and get away from “the people who were exploiting him and enabling his continued decline.” One of those trips was to Connecticut, where Tony Hsieh was able to “significantly curb” his nitrous oxide use in the weeks before the house fire that led to his death, his brother claimed.

Contact Katelyn Newberg at knewberg@reviewjournal.com or 702-383-0240. Follow @k_newberg on Twitter.