Lisa Marie Presley legal battle tells of wild spending, broken promises

Lisa Marie Presley and her former business manager tried to resolve their differences over her depleted fortune privately before she broke a confidentiality agreement and went public, according to a lawsuit filed against her.

The suit, filed last Wednesday in Los Angeles County Superior Court, is one side of a bitter legal dispute between Elvis Presley's only child and her former business manager, Barry Siegel.

As reported previously, Presley also has sued and claims her $100 million fortune is down to $14,000 because Siegel acted in his own best interests in making business decisions about how to spend her money. She claims "reckless and negligent mismanagement" in losing tens of millions of dollars and wants repayment.

More:Lisa Marie Presley says she's broke and her former business manager is to blame

The counter suit on behalf Provident FM LLC, through which Siegel managed Presley's interests, paints a different picture. The suit says Presley was kept informed of how her money was being spent but twice lost a fortune because of out-of-control spending she now wants to blame on others. 

A closer look at the Provident lawsuit describes years of wild spending and a failure to heed warnings, while at the same time ignoring an agreement to resolve the feud out of the public eye.

The ugly and high stakes dispute was supposed to be discussed privately under a confidentiality agreement, according to the Provident suit. It says the two sides agreed to hold off on legal action pending an attempt to work things out, and that the agreement was extended until last week, Feb. 21. 

Sometime around Feb. 14, however, the suit claims Presley and her representatives breached the agreement by a public filing that Provident says made the false allegations against the firm contained in her lawsuit.

"Subsequently, she refused to privately arbitrate the disputes, as she had previously agreed," the suit charges. 

At that point, the claims and counter claims began flying in public. 

Presley charged that Siegel sold 85 percent of her interest in Elvis Presley Enterprises so he could align himself with a famous investor with ties to the holding company of the "American Idol" TV show. She claims that after that venture didn't work out, he began liquidating assets to supplement the trust without telling her. 

She also claims Siegel bought a $9 million English home with money from her trust fund and pledged the trust as collateral when he couldn't make a $6.7 million balloon payment.

The Provident suit says the Trust established for Presley was receiving millions of dollars in annual income when it was established, but excessive spending and reliance on credit by Presley "far exceeded" what the trust could pay her from the income stream alone.

"To meet her demands for cash, the co-trustee (an officer of National Bank of Commerce) obtained a series of loans secured by EPE's assets. This still was not enough, and Lisa's spendthrift habits soon put the Trust into millions of dollars of debt."

The former Memphis-based NBC bank and Presley's mother, Priscilla Presley, became co-trustees of Lisa Marie's trust fund after Elvis' father, Vernon Presley, and his grandmother, Minnie Mae Presley, died.

By 2003, the lawsuit says, the trust fund was underwater to the tune of millions or dollars. It says Lisa Marie asked at that point for Provident to help her find more cash. The only solution that appealed to her was selling EPE stock. Consequently, 85 percent was sold, as both sides agree.

"This transaction yielded a fantastic outcome for the Trust," the lawsuit says. The sale netted $40 million in cash after taxes and stock valued at more than $20 million with a guaranteed 8 percent dividend, plus another $500,000 of preferred stock.

The result, according to the suit, was to return EPE from insolvency, give Lisa Marie the cash she needed and a yearly cash flow of millions without touching the principal in the trust fund.

But after the deal closed, the suit says Lisa Marie "immediately resumed her spendthrift ways, spending tens of millions of dollars, far more than she was receiving in annual income, in the first few years alone."

"Over time," the suit says, "Lisa spent not only her income from the Trust, but most of its principal, and, to the extent she didn't spend the assets, she encumbered them."

Finally, the suit adds, Presley "knew exactly what she was doing and the effect it had on the remaining Trust principal. At a minimum, each year she met personally with her Provident business managers to review and discuss her finances in detail."

Leon Gladstone, the attorney representing Provident and Siegel, said last week it was "clear Lisa Marie is going through a difficult time" and she was responding by blaming others.

"My clients, Barry Siegel and Provident Financial Management, stuck by her and in return, Lisa Marie stopped paying them and is now blaming them for her uncontrollable spending habits."