clock menu more-arrow no yes

Filed under:

Court clears convicted powerbroker to reclaim interest in Bulls

Former insurance mogul Michael Segal (left) is shown leaving federal court during his fraud and racketeering trial in 2004. | AP file photo

Chicago’s chief federal judge said Monday he will enforce an appeals court ruling that clears the way for former powerbroker Michael Segal to recover part of his interest in the Chicago Bulls.

U.S. Chief District Judge Ruben Castillo made the ruling at Segal’s request. The U.S. 7th Circuit Court of Appeals ruled in January that Segal should be allowed to recover his interest after serving prison time on a racketeering conviction. He spent nearly eight years behind bars for looting millions of dollars out of his company, Near North Insurance, to pay in part for a lavish lifestyle.

Segal was also ordered to pay $842,000 and forfeit to the government his interest in his company and $15 million. And as part of a 2013 settlement, the government kept half of Segal’s $4.175 million interest in the Bulls — made up of a 1.7-percent limited partnership in the franchise, a 1.1-percent interest in the United Center and a 1.1-percent interest in the team’s broadcasting company.

Segal also had a right of first refusal of any offer made to the government within six months for its half of Segal’s interest. Lawyer Peter Huizenga, a founder of Waste Management, wound up making a $2.9 million offer, but the appeals court found it was not a firm offer because Huizenga retained his right to back out of the deal for any reason after due diligence. He eventually did so after Bulls majority owner Jerry Reinsdorf declined to let Huizenga become a full partner, records show.

Therefore, the appeals court found Segal should be allowed to buy back his investment in the Bulls at its appraised value, and Castillo granted Segal’s motion to let the sale go forward Monday. That document indicates the Bulls have distributed $851,600 to the government as the owner of Segal’s interest, meaning Segal still has $1,235,899 left to pay.

Michael Segal (left) in 2012 with his attorney, Marc Martin, after Segal’s early release. | Sun-Times files
Michael Segal (left) in 2012 with his attorney, Marc Martin, after Segal’s early release. | Sun-Times files