The home sits on a secluded stretch of Lakehurst Avenue, in one of the most desirable neighborhoods in Dallas, the Lakes of Preston Hollow.
It has a casual French design with a slate roof, a three-car garage, vaulted ceilings over the great room, and a dining room view of gardens and a waterfall that cascades into the pool. A gourmet kitchen is de rigueur for any upscale home on the market these days, but the master suite with a wood-burning fireplace in the sitting area and the handsome library with custom bookshelves are nice touches. The interior was once featured in a D Home spread, decked for the holidays in Mont Blanc amaryllis, crystals, and creamware. Now the owners are asking $1.75 million for this 5,000-square-foot edifice of the American dream – a bit much for a waning market, and it isn’t clear they are motivated to bargain.
Eleanor Mowery Sheets shares the home, for now, with her husband and business associate Nicky Sheets and their two fluffy golden retrievers. It’s like many luxury homes she helped her clients buy and sell over the past 24 years, as the slender blonde with the billboard-ready smile built her realty empire. Eleanor was the agent Dallas Star Mike Modano turned to when he was looking for the perfect Highland Park bachelor pad, and later when he was ready to swap his rustic Italianate manse for a home with more privacy. The family of Lamar Hunt, cofounder of the American Football League and son of legendary wildcatter H.L. Hunt, chose Eleanor to sell his Turtle Creek plot. Asking price: about $15 million.
In November, the Wall Street Journal released its list of top real estate producers. Eleanor and her team ranked No. 17 in the nation, with sales of $171 million. She has been Coldwell Banker’s top Texas agent for 12 straight years, and she has led all 126,000 Coldwell Banker associates more than once as the company’s highest-producing agent worldwide.
Eleanor and Nicky appeared unstoppable – right until the day the feds sued to foreclose on their home for unpaid income and payroll taxes. In the lawsuit filed July 30, 2008, a U.S. Department of Justice tax attorney alleged that the couple and their companies owe $2.1 million in unpaid taxes, a number that swelled to more than $3 million after additional IRS audits and calculations. What’s more, the civil complaint accused the Sheetses of fraud for placing their home in what was described in the lawsuit as a “sham trust” to avoid paying the taxman.
Nicky claimed the trust was nothing more than estate planning. But he and Eleanor were forced to put their Lakehurst home on the market – 10 years after moving in, with all equity tapped – to appease the IRS during the ongoing court battle.
News of the Sheets lawsuit hit Dallas real estate circles like a bomb. It sent competitors scrambling not just for Eleanor’s Park Cities and North Dallas listings but for her agents, too. As her business teetered, she and Nicky parted ways with their longtime public relations man, who was powerless to stop the blowback. Fear and despair, abandonment and disloyalty – it nearly drowned Eleanor in the wake of the crisis.
How did such a real estate titan – she and Ebby are the only giants of the profession in Dallas who are known by one name – sink so low that now, at the age of 60, she faces foreclosure? How have Eleanor and Nicky, a couple who regularly generated more than $100 million in annual sales, a couple with billionaires speed-dialing their private lines, come so close to losing it all?
The federal lawsuit offers some answers. While the Sheetses ascended the Dallas real estate ladder during the past 20 years, they were dogged nonstop by creditors. According to a review of more than 1,000 pages of public documents filed in county, state, and federal courts, the couple’s financial problems began long before the meltdown in the national real estate market finally hit Dallas. Those problems worsened as the Sheetses began living a lavish lifestyle perhaps better suited to the wealthy clients they served.
The most striking detail about Eleanor’s current plight: it has brought her full circle. More than 20 years ago, she had to sell her house to keep the taxman at bay. In fact, that’s when she got into the real estate game, to settle IRS debts left by her first husband. Now, after all her success, after sticking with Nicky even as he betrayed her, Eleanor finds herself right back where she began.
Up From the Bootstraps
Eleanor’s rise to luxury real estate diva began in the ashes of her first marriage. She and Nicky have recounted the story, polishing it until it’s smooth, in various real estate publications. Eleanor Fisher grew up in the small town of Salisbury, North Carolina, wed the president of the fraternity she represented as “sweetheart,” and moved with him to Dallas.
Mrs. Mowery played the good Southern housewife as she raised two children in University Park and volunteered for charities in her spare time. But her husband had a drinking problem, and he wasn’t paying his income taxes. The feds threatened to foreclose on the Mowerys’ home, so they sold it in 1983 to meet their obligations. But more money was needed. The couple would divorce in 1987, after 20 years of marriage (he got the Buick, she got the Mercedes), but three years before that split, Eleanor knew she was on her own.
She was 36 years old, unemployed and in the red, with herself and two teenage children to support. She’d always had an entrepreneurial streak. When she was 6, she peddled groceries stolen from her mother’s pantry to buy a horse, and as an adult she decorated sweaters for sale. To keep the roof over her head, literally, Eleanor turned to residential real estate, a profession that welcomes hard luck stories. Dallas has Ebby Halliday, the legendary broker who got her start in business selling Cloverine Salve on pony-back as a child. There’s Dave Perry-Miller, a top performer in the luxury bracket, who once had to leave his watch behind to pay for gas. Eleanor appealed for a job to Ellen Terry, a petite fireball in heels who divorced and turned to real estate after the repo man towed her Mercedes while she was hosting a Junior League meeting. The stories might be apocryphal, but that doesn’t diminish their effectiveness as a sales tool.
Eleanor flunked Ellen Terry’s sales aptitude review. But her new boss was convinced she had potential. “I knew she was going to be a superstar, you could just see it,” Terry says now. Her new protege had the looks, the people skills, and the marketing instincts to thrive in the luxury residential field. And she had a listing in hand: the estate of a friend’s deceased parent, worth more than $1 million. Eleanor crammed the two-month training program into a few days and went to work. She took home $40,000 on that initial sale, closed $7 million worth of homes in the first six months, and went on to be rookie of the year.
The ’80s weren’t easy years to get started in Texas, which was weathering falling oil prices and a banking bust. But Eleanor’s fortunes rose as the Texas economy recovered. She worked nights and weekends, available to her clients around the clock. Two weeks after she was struck with a life-threatening bout of pneumonia, she climbed out of bed against doctor’s orders and started showing houses again.
Her job kept her from her children, but she did what she could to let them know the work was all for them. “She always made things extra special, even when she couldn’t be there all the time,” her 36-year-old daughter Dorrie Mowery recalls, curled into an overstuffed couch in her mother’s den. Eleanor coated the dog’s paws in powder to leave a trail of prints from the Easter Bunny. She organized a treasure hunt with notes tucked inside of walnuts. She surprised her daughter with a birthday party at the mall. “There was a huge pink ape skating around,” Dorrie says. “All my friends were there.”
Enter the Young Ostrich Farmer From Odessa
Eleanor was a successful businesswoman when she met John Nicholas Sheets in 1985, but everything changed when they eventually joined forces. Nicky, the son of an internationally renowned eye surgeon and Odessa rancher, had come to Dallas to house hunt. Eleanor showed him 100 homes, but he never picked one.
Nicky charmed her with his twinkling aquamarine eyes and firm grip. On their first date, he pulled up to Eleanor’s house in a white limo, dressed in a white tux. The young man from the Yellow Rose Ranch sent yellow roses to Eleanor at work. When their relationship grew more serious, Nicky sent yellow roses to her colleagues, too, lobbying them to convince her to marry him.
They dated long distance for five years and seemed an unlikely fit. He rode a motorcycle and was 10 years her junior. He sported a ponytail and Wranglers. She shopped at Barneys and Neiman Marcus. When she visited him at the Yellow Rose Ranch, where Nicky had taken over his father’s ostrich operations, she found the tumbleweeds and treeless landscape bleak. Nicky brought out the softer side of her personality. “He brought fun into our lives,” Dorrie says. “Mom, she worries so much. Nicky has a way of showing you the other side of life.” He was the kind of step-dad who tossed Dorrie into the kiddie pool fully clothed.
Nicky adored Eleanor – and still does, friends and relatives say. But he had walked out on his first wife, his former high school sweetheart, and left her with a 9-month-old baby and two other young children to support. Soon afterward, in 1986, he declared bankruptcy in the face of a $560,000 debt. His ex-wife, Cynthia Denise Jones, fought for years to recover the court-ordered child support. In 2002 he owed her more than $130,000. Court records show Nicky is still in arrears to her for $25,000 in attorney fees. Jones declined to comment for this story about the child support, citing advice from her lawyer. Few people, friend or foe, will speak on the record about the Sheetses. Either they feel the couple has had enough bad publicity over the federal lawsuit, or they’re afraid of being sued or stiffed.
Nicky brought more baggage to his relationship with Eleanor than just the obligations from his previous marriage. Above all, it was the ostriches that continued to chase the couple throughout their marriage. During the late-’80s ostrich craze, it seemed everyone in West Texas who wasn’t pumping oil was speculating on the 9-foot-tall flightless birds. A pair could fetch as much as $80,000, and at one time the Sheets family had more than 250 at their ranch. In 1990, Nicky convinced another young man named Michael Singleton to buy in. Singleton hit up his grandmother and parents – a mechanic and a JCPenney saleslady – to loan them more than $94,000. As the ostrich industry struggled to take off, it began to look more and more like a pyramid scheme, with profits dependent on convincing ever more people to buy birds. Eventually the avian well proved to be a dry hole for many small-timers. Ostrich skin boots remain popular, but the 3-pound eggs never became an omelet staple, and Texans never developed a taste for the bird’s low-cholesterol meat.
“Nicky is slick as a dollar bill. He’s very smooth,” says Lorna Jean Singleton, Michael’s mother, who, 18 years later, is still fighting Nicky in court. “My son was young, and he believed everything he said. He sold him some bad, diseased birds. Then he conned Michael into borrowing money.” Her son, she says, “went belly up. He was pretty much ruined as a young man.” Michael Singleton’s attorney, Gerald Fugit, won’t let his client speak to the media while Nicky still owes him money.
Nicky got out of the ostrich business while the birds were still fetching a good price, but he couldn’t escape his ostrich debt. In 1994, two years after Nicky and Eleanor wed, the West Texas creditors sued him, his father, and the ranch – and won. In court, Nicky claimed that the terms of the loan had been modified when he took out insurance on the birds, but a jury unanimously ruled against him and found him liable for fraud and additional damages.
The trial was horrible, Lorna says. “We’re not used to things like that,” she says. “We don’t like drama. The things they said – ” She stops herself, unable to express her anger.
A Power Couple on the Rise
Eleanor convinced Nicky to move to Dallas, and the duo formed a lucrative real estate collaboration. The couple was driven. Rather than honeymoon, they spent the day after they married in October 1992 negotiating a sales contract. Nicky, a licensed Realtor, served as the business manager for Eleanor Mowery Sheets and Associates, but the two were featured in ads together and attended listings in tandem. Nicky pushed Eleanor to remake her one-woman operation into something grander, with a support staff freeing her to concentrate on coddling her uber-rich clients.
The job wasn’t easy. The workday of any successful real estate agent is peripatetic, exhausting. Especially in the rarefied realm where homes cost $5 million and up, clients demand a level of service – “I want this. Fix that. Do this.” – that would break a weaker woman. To pull ahead of her competitors, Eleanor spent hours each morning listening to inspirational tapes by national real estate guru Howard Brinton. She and her staff trained with an industrial psychologist. She and Nicky traveled the country shadowing top agents and attending seminars, staying abreast of trends. For instance, a listing could fall short unless it featured an outdoor pizza oven.
Eleanor was an early adopter of Web technology and the first Dallas agent to brand herself by appearing in ads showcasing homes for sale. The company kept a moving van on hand to loan to clients and charities, a chef to cater a buyer’s first dinner in a new home, a carpenter ready for quick repairs, and a decorator to stage furniture. On Earth Day, they handed out little trees.
Anything to ensure a seamless transaction and keep the referrals coming. Eleanor went from about $12 million in annual sales before Nicky came onboard to about $20 million in 1993. The sales numbers kept growing – but so did their team and their overhead.
In 1996, when Eleanor and Nicky switched from Allie Beth Allman’s old firm to Coldwell Banker, Eleanor was accused in a lawsuit of improperly transferring her listings to the new company. The couple counter-sued, and the matter was settled in court, but the rivalry between Eleanor and her former boss grew to legendary proportions. Other agents claim that Allie Beth Allman refused to let the landscapers trim the spiraling juniper in front of her Uptown office just so she wouldn’t have to look at Eleanor’s face plastered on the nearby billboard.
But Eleanor’s name brand couldn’t be stopped by one juniper. To keep the business churning, Nicky made an 8-foot chart showing their listings and income goals and propped it two feet from Eleanor’s desk, “where she couldn’t miss it,” he told RealtyTimes in 1997. If she was in the office, it was tense, he said, “because that means we’re not selling anything.”
Each A-list client led to another: former Cowboys quarterback Drew Bledsoe, eye center founder Dr. Harvey Carter, former Ranger Mark Teixeira. And their high profile business led them into other arenas. Eleanor and Nicky co-hosted a fundraiser in 2007 for Tom Leppert when he was running for mayor.
“I wouldn’t buy or sell a residential property in the Park Cities without consulting Eleanor or Nicky first,” says Bill Hutchinson, a commercial real estate investor dealing primarily in shopping centers. “They are extremely knowledgeable. Some people just know how to give it a personal touch.”
Not everyone on the receiving end of that personal touch speaks glowingly of Eleanor. “She will do anything for a sale,” says one Highland Park socialite caught on the wrong side of Eleanor’s hyperdrive client concierge service. The woman, who asked not to be named because her ex owes her a bundle, says she found Eleanor’s “sold” sign in the garage of a home her husband secretly purchased before they had divorced. When she confronted Eleanor about it, she says Eleanor said, “I thought you knew.” The socialite was livid, but she was able to write the home into the divorce papers.
A Wreck Beneath the Surface
While Eleanor and Nicky were making a good living, especially for residential real estate agents – court records show they earned more than $9 million in gross commissions between 1997 and 2003 – their financial problems worsened. For years Gerald Fugit, the West Texas lawyer, had pursued Nicky. No matter how much money he and his wife earned, Nicky’s liabilities always appeared to exceed his assets. But Fugit and others – including Nicky’s bankruptcy trustee and now the Department of Justice – claim in court filings that Nicky and Eleanor cooked their financial books to thwart Nicky’s creditors. (Both Eleanor and Nicky have denied wrongdoing.)
For instance, in 1997 Nicky earned $402,066 on a land deal through his company JNS Investments, but the cash was paid directly to Eleanor on Nicky’s instructions, according to bankruptcy trustee Steven Turoff. In court documents, Turoff claims that Eleanor spent the entire sum in about 30 days. Among other things, she bought a $41,000 Acura for her son, a $45,000 Lexus for herself, and hangers full of clothes from Neiman Marcus, Lilly Dodson, and Stanley Korshak. Turoff claims that in a month the Sheetses’ joint checking account was overdrawn.
In filings, bankruptcy trustree Turoff wrote: “In seeking to preserve their lavish lifestyle against the claims of these creditors, the debtor and Mowery-Sheets, with the assistance of their professional advisors, appear to have committed acts that are, at best, ethically questionable and, at worst, plainly criminal.”
Turoff detailed what he considered the “most notorious” example of a pattern of shifting assets to avoid payment: Nicky flew his lawyer in a twin engine plane owned by Nicky’s JNS Investments to Odessa for a hearing, where he argued that he was just Eleanor’s penniless underling. When Fugit heard about it, he tried to levy the plane, but by the time he had tracked it from a recently vacated hangar at Dallas Love Field to the Addison airfield, it had been repossessed. “Someone beat me to it! I was furious,” Fugit says, chuckling.
Nicky filed his second bankruptcy in 1994, the year Eleanor also declared an individual bankruptcy. Then he went back to the trough for a third bankruptcy in 2001, in a case that dragged on until last year. But the ostrich debt could not be written off because it involved fraud, a judge had ruled. In 2002, after having spent far more on lawyers than he initially owed the West Texas ostrich investors, Nicky agreed to a payment plan to satisfy the 1994 judgments – with Eleanor as a guarantor. By then, Nicky’s debts had ballooned, with interest, to more than $516,000. A building Nicky had purchased for a downtown office was seized by his creditors, to the detriment of the agents who had bought into the investment. Which left Nicky at last count having paid about $400,000 toward the Odessa judgments but still behind on his debts.
Lorna Singleton, the Odessa mother, says her family refuses to give up because Nicky “was such a scoundrel, to use a nice word. We didn’t want him to get away with it.”
Another person who knew Nicky well as a young man (but was not involved in the ostrich venture) says Nicky’s father was regarded in Odessa as a great humanitarian. But Nicky, raised with his siblings in affluence, “had a very greedy” side. “He’s a con man,” the person says. “He has a way of just being able to suck people in.”
However effective Nicky’s legal machinations may have been, they took their toll on Eleanor. In 1999 she had her third life-threatening bout with pneumonia while vacationing in Mexico. Nicky bribed and cajoled to get her airlifted home, possibly saving her life, but she was out of the real estate business for months.
However effective Nicky’s legal machinations may have been, they took their toll on Eleanor. In 1999 she had her third life-threatening bout with pneumonia while vacationing in Mexico. Nicky bribed and cajoled to get her airlifted home, possibly saving her life, but she was out of the real estate business for months.
Then came a truly personal blow to Eleanor. In September 2000, Nicky was arrested for soliciting prostitution. According to a police report of the incident, he had been trolling for some extracurricular companionship and settled the details via AOL: $800 for two girls. After parking a new black Mercedes S430 just before midnight at the Hotel Crescent Court, Nicky knocked on the door of room 219.
“Hello, I am mistress Brook,” the woman said. “It’s nice to meet you. This is my slave mistress Dawn.” Nicky laid the cash on the table. “What do you want your mistress to do to you today?” mistress Brook asked.
“I thought you’d have a few things in mind,” Nicky said.
Mistress Brook replied, “I just want you to f— me.”
“Yes, mistress,” Nicky said.
After 15 minutes of making out, mistress Dawn asked, “Will you eat my p—-?”
“Yes, mistress,” Nicky said.
Then the “prostitutes” identified themselves as Dallas Police Officers and placed Nicky under arrest. They impounded his car and held him in jail until 8 the next morning.
The misdemeanor charges were eventually dismissed with no finding of guilt. Even more remarkable, Eleanor forgave him. It wasn’t easy, but they had already climbed so many hills together. That Christmas Eve, Eleanor and Nicky gathered their combined family of five grown children in their home. “Our family gathering is not so much about strolling down memory lane as it is about looking ahead together,” Eleanor said. “The idea is to maintain the magic and grow the love.”
But the future only brought more trouble for the Sheetses. On September 11, 2001, Nicky was held in civil contempt of court for not complying with an order to file his 2000 federal tax returns. The court threatened to throw him in jail if he did not comply.
In 2003 Eleanor started complaining of migraines and jaw pain so severe that some days she couldn’t work or eat. That year, both Dallas County and the federal government sought to foreclose on the Sheetses’ Lakehurst home for unpaid taxes. The couple resolved both situations, but after scrutinizing their past tax returns, the IRS assessed them with a new tax bill—the subject of the current lawsuit to foreclose.
As their creditors were closing in, the previously stable luxury real estate market in Dallas began to sour. According to MLS data, the number of houses sold in the Park Cities in 2008 with an asking price of $2 million to $3 million was down 45 percent as of mid-September compared to the previous year. Preston Hollow, North Dallas, Lakewood—they were all sagging, too. In August, it became clear that national home prices had plummeted by the steepest annual rate ever, according to the Standard & Poor’s/Case-Shiller 20-city housing index. The luxury housing market in Dallas stopped.
As the real estate slowdown squeezed the Sheetses and their debts loomed, their smaller vendors with outstretched palms were pushed to the back of the line. Verve Communications Group designed ads for Eleanor and Nicky that were published in the real estate magazine Enclave, but more than a year later the Sheetses haven’t paid the $2,500 bill, Verve reps say. The Sheetses were apparently so broke that they couldn’t afford cheeseburgers. Nicky’s check for $308 to The Hamburger Man for a recent home showing bounced. When Maurio Sulit, the operations manager for the catering company, tried to collect, he says Nicky told him, “I don’t have any money.” Sulit says the amount was about “the price of a doorknob on Lakehurst.”
The Sheetses’ legal troubles remained largely unknown in Dallas until the Department of Justice filed its lawsuit last summer to foreclose on their home. In an amended complaint, U.S. attorneys said, “The United States detailed the Sheetses’ history of over 20 years of not timely paying their federal taxes, as evidenced by the Government’s filing of over 20 federal tax liens against them in Dallas and Ector counties since 1982.” The complaint said that for most of the past two decades the Sheetses had failed to pay their income taxes, and they took “evasive action” to avoid doing so. “People tend to repeat their history,” the feds wrote.
It was just a lawsuit, not a criminal indictment, but the effect was devastating to Eleanor’s business. Stories circulated that her clients received copies of news stories and court papers detailing her financial meltdown. Clients defected to rival real estate agencies, along with several of Eleanor’s key agents. Less than a week after the lawsuit was filed, Linda Shore bolted to Eleanor’s nemesis, Allie Beth Allman. Later that month, Kevin Laszlo and Gianna Cerullo were gone. Laura Michelle followed them out the door in October, taking her leave in tears as the Eleanor Mowery Sheets realty empire faltered.
Eleanor, who had once represented 200 homes at a time, saw her advertised listings shrink from about 70 just before the lawsuit was filed, then down to 17 by November. For several days, her website’s welcome page displayed a typo-ridden notice that it was “unergoing rennovation” as agents and listings kept evaporating.
One agent who stood by her through the tumult was Eleanor’s longtime sales associate Holly Kincaid, who got her start as Eleanor’s personal assistant. “She taught me everything I know,” Kincaid says, choking with tears. “She means a lot to me. She’s the best negotiator out there.”
To keep the business afloat, Eleanor and Nicky turned to Commission Express Dallas, aka Langbert Financial, to borrow hundreds of thousands of dollars in advances on their commissions. But the IRS issued levies against Eleanor and Nicky’s income, sending notices out to all the builders and title agencies and other companies who might send the Sheetses checks.
As some rival real estate agents sniped about the misfortunes of “Agent Orange” (so called for her orange advertising circulars) and feasted on the carrion of her fleeing listings, others were sympathetic. One executive from a rival firm says, “Regardless of their guilt or innocence, way too many people have reveled in their fall.” Others in the real estate community sent flowers, food, and cards. Relatives and friends say that during this period Eleanor was so distraught by her turn of fortunes that she could hardly get out of bed or answer the phone.
In early September, a group of real estate agents, including some of her former not-so-friendly competitors, went to Eleanor and Nicky’s Lakehurst house with kind words. Eleanor was moved to tears. Later that month, another group, mostly members of the elite invitation-only Masters of Residential Real Estate networking association, met for two hours at Eleanor’s home with the Sheetses, their accountant, their lawyer, and their publicist. They vowed to take out an ad pledging their support for the Sheetses, but Eleanor asked them not to. When they were out of Eleanor’s earshot, several agreed that they did not want to get the IRS mad at them, too, according to one agent who attended.
Another prominent local real estate agent had called D Magazine unsolicited to gush about Eleanor. She said she’d always been fond of her. “We are just sick about all this,” the agent said. “She killed herself working like a fiend.” But the woman later called back and begged not to be named in this story.
Dave Perry-Miller, who worked with Eleanor when she was getting started, says, “I admired her so much for her work effort.” He says he couldn’t help but think of Eleanor with sadness when he recently stuffed his quarterly tax payment in the mail, two days early. “This business is a very seductive business that attracts people that are very ambitious. It can also be your undoing,” he says. “It’s easy for agents to start to try to look like their clients buying $3 million or $4 million homes, when in reality we’re like their accountants.”
Nicky Sheets declined to be interviewed for this story, even after reviewing a list of possible questions in advance. In response to his own set of questions, he wrote: “During the course of these ongoing audits, we have paid approximately $1,000,000, including some huge penalties, to try and cure the problem. We have paid thousands and thousands of dollars to tax professionals to resolve these issues.” The statement issued through his publicist added, “Our returns have always been prepared by CPAs and we signed based on their advice.”
On a more personal note, in an e-mail sent late at night and not through his publicist, he said all of Eleanor’s actions have been positive for other people and the industry. “Other than that, she DID NOTHING and only I would be to blame,” he said. Even after all these years of marriage, he is still in awe of the “grace, elegance, love, compassion and empathy for others” exhibited by his “bride,” as he still calls her.
The couple’s longtime publicist, Keith Nix, had encouraged the Sheetses to share their side of the story with the media in the wake of the IRS lawsuit. But his own relationship with the Sheetses disintegrated after the suit was filed. Nix, a former vice president of corporate public relations for Neiman Marcus, was quoted in a Dallas Morning News story that suggested it was business as usual for the Sheetses as they discreetly marketed John Amend’s Mount Vernon estate on White Rock Lake that formerly belonged to H.L. Hunt. Rumors put the asking price at $50 million. The News story seemed to put a sweet counter-spin on the bad news a week after the lawsuit, all thanks to Nix. Only it wasn’t true. The six-month listing contract had expired, and the paper printed a retraction that left Nix squirming.
Nix turned to fellow heavy-hitting “communications strategist” Lisa LeMaster for advice. The impact on his career was “deadly,” she told him. After the Sheetses stopped paying Nix’s retainer, he resigned. LeMaster, who was lobbied from several corners to help the Sheetses navigate the public relations mushroom cloud rising in the wake of the lawsuit, took them on before even reading the filings, she says.
In September, Eleanor and her attorney struck back in court. Her company, now called E-Residential LLC, sought a temporary restraining order against the tax levies, which could unfairly force it out of business, along with 11 employees, they argued. The request was denied, and the attorney who crafted it, William Roberts, resigned soon afterward, citing “mutual disagreement over how to proceed as well as payment issues.”
The next month, Nicky played what might be his trump card. On October 8, he declared bankruptcy again, less than a year after emerging from his last bankruptcy. It was his fourth.
The immediate impact of the filing, which was hastily submitted without the proper schedules, was to freeze the foreclosure proceedings in federal district court until a judge could review the matter. If the bankruptcy is declared in bad faith or Nicky’s tax debts are proved to involve fraud, as the feds allege, then the original lawsuit to foreclose can proceed.
Later that month, the Sheetses turned to Ellen Terry to list their home for sale. It must have been a difficult decision. The Sheetses didn’t stick a for-sale sign out front at first. An open house was scheduled the last week of October, a week before Nicky was set to appear for a preliminary hearing. But the event was canceled.
On November 6, U.S. Department of Justice tax attorney Ramona Notinger rolled three boxes labeled “Sheets” strapped to a luggage cart into bankruptcy Judge Stacey Jernigan’s Dallas courtroom. She stacked thick black binders over every inch of a table. Fugit, the lawyer representing one faction of the West Texans, sat at her side.
On the other end of the room, Nicky and his lawyer, Martin Thomas, prepared to face off against them. Nicky, now 50, looked calm and alert. He wore a pinstripe suit and aqua tie that set off his eyes and ruddy face. His hair was graying, and he’s grown portly.
Eleanor had not planned to attend, but she decided Nicky needed her support. She arrived after her husband, dressed in pinstripes like Nicky. She wore sunglasses even inside and looked frail—but she clearly had some fight in her.
As Eleanor tossed her Louis Vuitton bag on the security conveyor belt, she spotted Mary Candace Evans, the D Home real estate editor who had for months chronicled Eleanor and Nicky’s legal troubles on her blog, DallasDirt. “What are you doing here?” Eleanor demanded. Then turning to the security guard: “I want her out of here!”
Evans was there to keep tabs on the feds’ threat made in recent court documents to sue Coldwell Banker for wrongful failure to honor levies on the Sheetses. She stood her ground. The guard returned from chambers and told her, “Ma’am, you’re free to go in there. This is a public hearing.”
Evans walked into the courtroom while the judge was in session on another matter and sat in the middle of the second row. Eleanor followed close behind, appearing both fragile and menacing. Eleanor stood over the seated Evans and pressed her hip into her, furiously whispering in a voice loud enough to make U.S. attorney Notinger’s head turn. “You need to leave,” Eleanor said. “Don’t you have some dirt to write somewhere else?”
The bailiff called, “All rise,” as the judge broke for a recess, but Eleanor continued, oblivious, until Nicky led her away by the elbow. Evans fled.
After the commotion ended and court resumed, Notinger told the judge she thought it was obvious that Nicky had filed this bankruptcy in bad faith. “It’s ludicrous,” she said, referring to Nicky’s statement of assets somewhere close to zero. “They start up a company, run up a bunch of taxes, shut that down, and start all over again,” Notinger said.
Nicky, in his affidavit in opposition to the U.S. government’s attempt to override his bankruptcy, says he would “propose paying all of his creditors in full with interest” and stated he has sufficient earning capacity to do so.
In court, Thomas insisted that Eleanor owned the house, not Nicky, and that his client filed for Chapter 11 bankruptcy to free his real estate commissions from tax levies so he could pay his creditors. “The Sheetses have had no money in the last 90 days as a result of the levies. The IRS has taken every penny. There’s no living allowance,” he said. “The Sheetses don’t have food. They can’t pay their utilities. They can’t operate their business. If the IRS wants to be paid, Mr. Sheets has to go back to work. … I had to loan him $800 to get him into bankruptcy,” Thomas said.
Toward the end of the proceedings, Judge Jernigan put her head in her hands and rubbed her eyes. Then she set a hearing date in December.
It’s difficult to understand how Eleanor went wrong. The reams of court documents, the claims and counterclaims, the docket sheets with dates marching through the decades can only reveal so much. They can’t explain whether it was ignorance, greed, bad luck, or even love that led Eleanor so high, before dragging her so low.
Now Eleanor might be poised for a Martha Stewart-like comeback, sans prison garb, predicts Brinton, the real estate guru. He has known the Sheetses for more than 15 years and was shocked to hear about their financial troubles. “But I’ve seen everybody at every success level fall into things like this, from Colonel Sanders to Donald Trump,” he says. “The key is not what you do when you’re down. It’s your next step.”
Ellen Terry agrees. “She will pull out of this, I have every confidence,” she says. Eleanor is a fighter, and “when she gets her health back, she will deal with the IRS and get that settled as quickly as possible and begin rebuilding her career, whether it’s in real estate or anything else.
“Two things I learned growing up,” Terry says. “Death and the IRS, you can’t avoid them. You just can’t roll up into a ball and hope it’s all going away.”
Nicky, the eternal optimist, remains confident about their legal prospects and life in general. “I have always said that to fall victim is to believe the story,” Nicky wrote in an e-mail to D. “The best way to turn the corner is with a positive attitude, one built on the faith that we do have a God to carry us through regardless of what the world says. For he has carried me so many times. … Faith is real! Dreams can be reached and miracles happen every day.”
Fugit, the West Texas lawyer, has a more cynical view of his longtime legal foe. “He’s like a cat,” Fugit says. “You throw him up in the air and he lands on his feet. He has a capacity.”
As for Eleanor, after months of negotiations through her PR representatives, and after backing out of one interview, she finally agreed to answer questions for this story in mid-November, just as D was headed to press.
She is not reminiscing these days about her career milestones and awards, the numbers she hit, or the biggest client she landed. “I really haven’t lived my life,” she says. “I’ve been so totally focused on work, and family.” Running around the private lake near her home, watching the children and dogs play, and just being at peace—those are the moments she says she’s cherishing now.
Eleanor is taking each day as it comes, gathering her strength, methodically mapping her way forward as she prepares to rebuild her life doing what she does best: helping people buy and sell houses. It will be different this time. She won’t blindly rely on others to take care of the details.
She says, “I am so dreadfully sorry so many people have had to go through this mess, because of me, because of decisions I made.” Her friends and family, her clients, and the agents who worked under her—so many were affected, she realizes. She was deeply touched by those who stayed with her, she says, and she does not begrudge those who moved on.
After so many years at the top, a woman with her work ethic and talent should be preparing for a well-earned retirement. But there’s no time for that now. Eleanor got her start in real estate propelled by desperation. “Nothing has come easy for me,” she says. Twenty-five years later, she finds herself back at square one.
Gretel C. Kovach is a contributing editor to D Magazine and freelance writer for the New York Times and others. Write to [email protected].