Sorting Out Tony Hsieh’s Estate, From LLCs to Thousands of Sticky Notes

Among the other matters the Hsieh family is tackling: about $70 million worth of real estate he recently purchased in Park City and surrounding areas, much of it spread across about a dozen limited-liability companies; friends of Mr. Hsieh’s who continue to live in some of those houses and condominiums; and a $30 million “angel” fund planned for tech startups and other businesses in Park City, according to the records and people close to Mr. Hsieh.

The complexity of the estate—both in what he owned as well as what he owed to others through various commitments—is compounded by what his friends have said were struggles during his final months with alcohol and drug abuse, particularly heavy usage of nitrous oxide.

Some of those people said they don’t believe Mr. Hsieh was of sound mind when he made some of his recent investment decisions or employment agreements.

Still, his plans marched forward. About a month before he died, property records show, a company affiliated with Mr. Hsieh bought parcels connected to a resort near St. George, Utah, known as the Holmstead Ranch, which includes cabins, a lake and an amphitheater.

Property records don’t show the purchase price and the previous owner, Monte Holm, didn’t respond to a request for comment.

Mr. Hsieh, 46 years old, died from injuries sustained in a house fire in November in New London, Conn., where he was staying while making plans to check into rehab in Hawaii, the Journal has reported. The Connecticut medical examiner ruled the death an accident. 

The fire is still under investigation, according to New London Fire Chief Thomas Curcio.

Mr. Hsieh was an early investor and the longtime leader of Zappos, the online shoe-retailer that he sold to Amazon.com Inc. in 2009 for more than $1 billion. He continued to serve as its chief executive until he retired in August.

Mr. Hsieh is also well-known for his bestselling book on company culture, “Delivering Happiness,” and for his yearslong revitalization of downtown Las Vegas, where he plowed $350 million into development projects.

Mr. Hsieh was worth hundreds of millions of dollars around the time of his death, according to close friends and an estimate by the business magazine Forbes. Family members last month filed court records saying he apparently died without an estate plan.

In July, Mr. Hsieh’s cousin, Connie Yeh, who worked with him in Las Vegas and played a role in his property development in Park City, was granted power of attorney, giving her the ability to act on his behalf, court records show.

After he was removed from the fire, Mr. Hsieh was eventually transported to and died in a burn center. Two days before his Nov. 27 death, and again about a week after the fire, Ms. Yeh petitioned a Las Vegas court to be named guardian of Mr. Hsieh and his estate, saying he was incapacitated, court records show. The judge didn’t rule on the request before Mr. Hsieh died. Ms. Yeh declined to comment.

In early December, a separate judge in Las Vegas appointed Mr. Hsieh’s father, Richard, and brother Andrew as special administrators and legal representatives of the estate.

The judge found that Mr. Hsieh’s personal and business affairs “require immediate attention to prevent loss to the estate,” the court records show.

Richard and Andrew Hsieh traveled to Park City this week to begin unwinding the estate, according to people familiar with the matter.

Already, several people who were staying in Mr. Hsieh’s properties were asked to leave, according to people familiar with the matter.

The Hsieh family said in a written statement that “no decisions on the future of the estate have been made since Tony Hsieh’s recent, sudden and unexpected death.” As co-administrators of the estate, Richard and Andrew Hsieh are charged with “duties to gather information and to garner and protect the assets of the estate, and these next stages will take time to run their course,” it said.

The entirety of Mr. Hsieh’s estate appears to be a “mess,” said Justin H. Brown, a partner at the law firm Troutman Pepper Hamilton Sanders LLP who is focused on estate planning. The sticky notes Mr. Hsieh left behind could present an unusual and difficult challenge, he said.

“You’re going to have to look at each specific sticky note and decide if it’s a contract—is it binding?” said Mr. Brown, who isn’t involved in the matter. “Was he in the correct state of mind—did he have the capacity to even enter a contract?”

While Mr. Hsieh also retained property in Las Vegas, the focus of the Hsieh family is currently in Park City, a mountain community of about 8,500 residents in Utah. Mr. Hsieh fell in love with the town after attending its annual Sundance Film Festival in January and after attending rehab there, according to close friends.

The centerpiece of his property there is a 17,350-square-foot mansion with a private lake that he bought for about $16 million, and which he and people around him called “The Ranch.”

Unlike Las Vegas, where areas of downtown were rundown when Mr. Hsieh began his revitalization around 2013, Park City is an affluent ski area with a thriving main street, said Dana Williams, a 43-year resident and the town’s former mayor. Some residents met Mr. Hsieh’s interest with skepticism.

“He was going to bring art and culture and food to Park City,” said Mr. Williams. “There were a substantial number of locals who said, ‘Maybe you should learn something about us first.’”

Mr. Hsieh didn’t articulate a broader vision for Park City as he had in Las Vegas, where he tried to create an arts and tech scene that could diversify the local economy, friends and local business owners said. Instead, in Park City he primarily bought properties and helped local entrepreneurs, often based on his friends’ and acquaintances’ recommendations, said those people and area residents who dealt with him.

Mr. Hsieh promised some of his friends commissions of up to 20% for bringing in musicians, service workers and developers to support Mr. Hsieh’s investments in Park City and parties at The Ranch, agreements that were often only reflected in the sticky notes, the people said.

He offered several friends access to his credit cards, and set up open tabs at restaurants including Fletcher’s Park City and The Eating Establishment, according to people familiar with the matter. Representatives for the restaurants didn’t respond to requests for comment.

He propped up a local car service hard hit by the coronavirus pandemic, Four Seasons Concierge Transportation, and used its drivers to ferry guests and friends around town, one of those people said. Four Seasons declined to comment.

Another friend, Suzie Baleson, managed upward of 20 contracts for businesses and vendors funded by Mr. Hsieh through her own company, The Wellth Collective, according to people familiar with the contracts.

The company describes itself on its website as creating “wellness focused events” around the world. Ms. Baleson didn’t respond to requests for comment.

Alex Campbell, who owns a wine bar and RTT Concierge personal services in Park City, said his company brought wine and charcuterie to The Ranch three or four days a week, depending on how many guests were visiting.

Mr. Campbell said Mr. Hsieh took an interest in him and made a point of bringing him business. At one event, people pitched ideas for businesses and got feedback from others in the room. Mr. Campbell said Mr. Hsieh was “very creative” and tried to make ideas better.

Mr. Hsieh’s real-estate portfolio in Park City was spread across a number of LLCs with names such as Pickled Investments and Utah TH. He also bought homes and condos that comprise almost an entire block of Empire Avenue in Park City, property records show.

While it isn’t unusual for wealthy investors to purchase properties through an LLC to protect their privacy, close friends say his Las Vegas investments weren’t structured in the same way.

— Kate King contributed to this article.

Write to Kirsten Grind at [email protected] and Katherine Sayre at [email protected]