Tony Hsieh’s family, lawyers make millions overseeing his probate case

Tony Hsieh died with a massive fortune, having sold Zappos to Amazon in a $1 billion-plus deal and assembled a sprawling real estate portfolio.

Managing the assets he left behind has also proved lucrative.

Hsieh’s family and its legal team have billed more than $18 million combined to run the Las Vegas tech mogul’s estate since his death more than four years ago, according to filings in his probate case in Clark County District Court.

Their payments were approved by a judge and are drawn from the estate, which was previously valued at more than $520 million, records show.

A recent court filing, however, could upend the probate case that Hsieh’s family and its lawyers have been overseeing.

Attorneys who aren’t working for the family filed court papers April 17 with Hsieh’s will and a letter stating it was recently found in the personal belongings of a man who died after suffering from Alzheimer’s disease and was not aware that Hsieh had died.

District Judge Gloria Sturman is scheduled to hold a hearing in the case on June 5.

Court records show that Robert Armstrong and Mark Ferrario, who were named executors in the will, asked for a hearing in part to address the “potential service” of the co-executors and the administration of the estate.

All told, it’s been a surprising and bizarre turn of events in the yearslong effort to handle Hsieh’s estate — a legal drama that has already involved lawsuits, creditors’ claims and detailed accounts of Hsieh’s drug use and erratic behavior in his final year alive.

Big estate, big fees

Hsieh, the former CEO of online shoe seller Zappos and face of downtown Las Vegas’ economic revival, died on Nov. 27, 2020, at age 46 from injuries suffered in a Connecticut house fire.

He was unmarried and died as one of downtown’s biggest property owners, having amassed a portfolio of apartment complexes, office buildings, empty lots and other sites through a $350 million side venture originally called Downtown Project.

As seen in a court filing in late 2021, a preliminary inventory valued his estate at “no less than” $523 million and noted assets were still being identified and evaluated.

Hsieh’s father, Richard Hsieh, has been managing his son’s estate, and the dad’s legal team has stated multiple times in court filings that the younger Hsieh died without a will.

Attorneys Dara Goldsmith and Vivian Thoreen, who represent Hsieh’s father in the probate case, did not respond to a request for comment for this story.

As seen in four petititions for payment in the case from 2021 through 2024, Goldsmith’s firm, Goldsmith & Guymon, billed more than $1.3 million in fees and nearly $34,000 in costs, and Thoreen’s firm, Holland & Knight, billed almost $8.4 million in fees and more than $270,000 in costs.

Hsieh’s father and brother also billed $8 million in fees to serve as administrators of the estate, according to the petitions. His brother resigned from the role in summer 2022.

‘I’m not approving that rate’

Sturman has approved payments for the family and its legal team, though she criticized hourly billing rates in the case at a hearing in late 2023.

Attorneys for Hsieh’s father had filed court papers that fall saying Goldsmith’s rate was $600 per hour and other lawyers at her small Las Vegas firm charged between $350 to $425 per hour.

At Holland & Knight — a big firm with offices around the country — Thoreen’s hourly billing rates in the period covered by the filing were $1,075 and $1,175.

The court filing also indicated that several other lawyers at Holland & Knight were working on the case, with hourly rates listed between $700 and $1,275.

“I know this is a huge estate. … But the concern I have here is approving these fees. … This is not what’s reasonable in this community,” Sturman said at the Dec. 7, 2023, hearing, according to a transcript filed in court.

“I have no problem with $600 an hour,” the judge said. “I have a problem with $1,250. I’m not approving that rate.”

Complex case

The legal team for Hsieh’s father subsequently filed court papers stating that the prevailing market rate in a community is “only one way” for a court to determine whether attorneys’ fees are reasonable, and that there were several cases in Nevada with billing rates at or above $1,000 when adjusted for inflation.

They also noted that Hsieh’s estate consists of a broad portfolio of assets and business interests and requires specialists in estate taxes, real estate, corporate law and securities, labor and employment, complex litigation and probate.

The value that Holland & Knight offers by having wide-ranging services in one firm “cannot be overstated,” the attorneys wrote, noting the estate has faced multiple active lawsuits and other issues simultaneously.

The estate could theoretically “employ multiple firms with lower billing rates to address the complex issues” it faces, but the “associated transaction costs and risks of doing so are far too great,” the attorneys argued.

Sturman, who had approved Goldsmith & Guymon’s fees for the period covered by the filing, subsequently approved Holland & Knight’s fees as well, court records show.

She had declined to enter a finding that individual rates charged by certain Holland & Knight attorneys were reasonable in Las Vegas.

But she analyzed billing statements and rates of various lawyers who worked on different tasks and determined the “blended rate” was “not unreasonable in the local community,” Sturman wrote in her order.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.