After her husband Russell committed suicide last year, Taylor Armstrong inherited the financial mess he left behind, which included a major lawsuit from a company from which he allegedly defrauded $1.5 million. Taylor has finally settled the case out of court and, having little liquid assets, was required to turn over "valuable" personal property, like her engagement ring and her Hermès Birkin handbags—which turned out to be knockoffs.
Russell Armstrong, who had a long history of shady dealings, had been raising capitol for a startup called MyMedicalRecords.com, which he allegedly pocketed with Taylor's help. Russell was forced out of the company and paid MMR $250,000. A legal settlement—signed by both Taylor and Russell—required the Armstrongs to list every investor from whom they'd received money. When MMR discovered that the Armstrongs had withheld the names of three different investors who'd contributed a substantial amount of money, the company filed a lawsuit for $1.5 million. Two weeks later, Russell hanged himself.
Just a few weeks ago, Taylor finally settled that lawsuit out of court. Details of the settlement reveal how false the persona—of a wealthy trophy wife who could afford to throw lavish $60,000 birthday parties for her four-year-old daughter—that she created for her reality television role on The Real Housewives of Beverly Hills really is.
The Armstrongs have no real estate (they rent the large home seen on the show) and few liquid assets, so Taylor was forced to hand over personal property. Her engagement ring, worth about $250,000, made the most news, since MMR had put it up for auction on eBay, hoping to earn a few extra bucks by cashing in on Taylor's fame.
Part of the settlement required "representation" from Taylor that she has no endorsements, deals, or business plans in the works that would earn her any income outside of her fee for participating on Housewives. That means that, although she's in dire straights, financially, Taylor cannot monetize her fame for a specified period of time.
Most interestingly, the Birkin bags that she's seen carrying around the show were also included in the settlement. They can range in value from $9,000 to $150,000. Taylor's Hermès bags turned out to be as real as the facade she had been living.