Tony Hsieh’s estate sued over $6.8M contract

Tony Hsieh’s longtime friend and financial manager has sued the late tech mogul’s estate, seeking nearly $7 million from a breached contract.

Lawyers for Tony Lee filed the lawsuit Monday in Clark County District Court, alleging that Hsieh, the former chief executive of Las Vegas-based online shoe retailer Zappos, had agreed to pay him $1.5 million a year for five years.

The contract specifically outlined that Hsieh must buy out of his contract if Lee were ever to be terminated without cause, the lawsuit states.

After Hsieh died from injuries suffered in a November house fire in Connecticut at age 46, his father, Richard Hsieh, and brother Andrew Hsieh were appointed co-special administrators of his estate. They issued a notice in late January suspending the contract, the complaint alleges.

Another longtime friend of Tony Hsieh, Jennifer “Mimi” Pham, filed a lawsuit in February over contracts she said are not being honored. Representatives for Hsieh’s estate were not available for comment Tuesday night.

The newly filed lawsuit states that Lee and Tony Hsieh had been friends since 2003 and that Lee had even been the best man at Andrew Hsieh’s wedding.

Since the beginning of their friendship, Tony Hsieh would recruit Lee to work for him, according to the complaint. Lee would repeatedly decline the offers to work for him exclusively, but provided him with assistance.

While working for Wells Fargo Capital Finance, Lee provided a loan to Zappos in 2003 that prevented it from filing for bankruptcy.

“Tony Hsieh was always appreciative of that fact and would introduce Mr. Lee to his friends and colleagues as ‘the person who saved Zappos,’ ” the lawsuit states.

On July 24, Lee visited Tony Hsieh in Park City, Utah, where he explained that his goal and vision was to develop another community like downtown Las Vegas, according to the court document.

He offered Lee the opportunity to handle all finances related to the venture and proposed paying Lee two times more than Lee was making. They drafted a contract that would guarantee Lee’s salary for five years and that he could only be terminated with cause.

“Ultimately, Mr. Lee left a position that had a secure future so that he could, among other things, assist his friend, Tony Hsieh, achieve his wishes and vision,” the lawsuit states.

According to the document, Lee also worked informally with Andrew Hsieh to help prevent others from taking advantage of his brother.

“Lee was also keeping an eye on Tony Hsieh the best he could, even personally cooking him meals from time to time,” Lee’s attorneys wrote in the complaint. “At no time during Tony Hsieh’s life did Andy Hsieh or Richard Hsieh ever challenge or question the validity of the Guaranteed Contract.”

After Tony Hsieh’s death, Lee continued to perform under the contract until receiving a letter dated Jan. 21 notifying him that the contract was terminated “due to a variety of reasons and changed circumstances, including the death of Tony Hsieh.”

The termination took effect immediately.

Contact Briana Erickson at berickson@reviewjournal.com or 702-387-5244. Follow @ByBrianaE on Twitter.