'American Sniper': Chris Kyle's Widow at Center of Quiet Furor Over Profits

Taya Kyle, wife of the film's hero, hasn't paid two families of soldiers her late husband promised to support.

This story first appeared in the Feb. 27 issue of The Hollywood Reporter magazine.

When he was alive, Chris Kyle told friends and business associates that he viewed any profits from his memoir American Sniper as "blood money." The legendary Navy SEAL, whose account of his four tours of duty in Iraq was adapted into the Clint Eastwood movie that is now up for six Oscars including best picture, maintained that he wanted the money to go to support struggling military families. After Kyle and a friend were shot and killed in 2013 by a veteran Kyle was helping, The New York Times retold this widely known point of view: "Though his book became a best-seller, he never collected money from it, friends said, donating the proceeds to the families of two friends and fallen SEAL members, Ryan Job and Marc Lee."

Yet today, with more than $6 million banked from the American Sniper franchise (boosted by the sale of more than 2 million books) and millions more on the way as the Warner Bros. film nears $400 million worldwide, a quiet dispute festers over who is entitled to that windfall. At the center of the discord is Kyle's widow, Taya, 40, who is alleged to have ignored her late husband's wishes and withheld money from the bereaved families he publicly had promised to support. Neither Lee's family nor Kelly Job, the widow of Ryan Job, have filed lawsuits, and none is expected. Legal experts say that because Kyle's promise was verbal and he died without a will, prevailing in a court case would be unlikely. Sources also say Kelly Job, who lives in California with a daughter, and Lee's mother and two siblings are unwilling to be seen taking legal action against a celebrated widow. (Both families declined comment.) But the Lees and Jobs are said to be upset that they haven't received even a small share of the proceeds from Sniper after Kyle died. They maintain, according to sources close to the families, that Kyle's wishes are not being fulfilled. In fact, before he was killed, Kyle donated about $56,000 to the Lee and Job families as well as to a charity supporting veterans. At a memorial service for Kyle in Dallas footage of which is shown at the end of Sniper), Lee's mother, Debbie, president of the nonprofit America's Mighty Warriors — whom Kyle describes in the book as "almost a surrogate mother to the other members of our platoon"— recalled the moment she learned of Kyle's largesse. "I was speechless, overwhelmed and in tears," Lee told the audience of 7,000 mourners. "Chris didn't publish that book for an income or to be famous. He hated the spotlight. Chris did that for his teammates."

Taya Kyle hasn't spoken publicly about proceeds from the book and movie, but she was pressed about her willingness to pay the Jobs and Lees in a separate business dispute. In August, Taya sued Christopher Kirkpatrick, a Dallas lawyer who had represented both her and her husband in connection with several business deals, including a company called Craft International that Chris Kyle had co-founded.

In that suit, Taya claimed that Kirkpatrick was inappropriately making statements that Taya had not honored her late husband's oral promises and was withholding money from the Jobs and Lees. Taya responded strongly in a court filing that she owed no such obligation and was in possession of an undisclosed document that made clear her husband's plan: "Chris Kyle specifically detailed his wishes as to the proceeds of American Sniper in the event of his death," the language of the court filing reads. "And such wishes are IN FACT being carried out as set forth by Mr. Kyle." She maintained that another adviser had drafted a written document that spelled out "his wishes as to the distribution of profits after his death," which suggests it did not include the Lee or Job families. Taya has not shared that document in the case, which is ongoing. Requests by THR to Taya's current attorney, Ed Huddleston, to see that document or speak with Taya were denied, with Huddleston saying she was too overwhelmed by current events.

Indeed, it is easy to understand why Taya would feel that way. Even as she has become perhaps the most famous widow in America, feted by veterans groups and with her own memoir, American Wife, coming in May, she faced the agony of testifying Feb. 11 about her husband's last day alive at the murder trial of his alleged killer, Eddie Ray Routh. She is raising two young children alone and has become embroiled in the public debate over the meaning of her husband's life story. Critics, politicians and pundits have joined Michael Moore, Seth Rogen and Blake Shelton in a national conversation about the war in Iraq, Kyle's heroism and even the use of snipers.

At the same time, she is appealing a judgment that Jesse Ventura won against the Kyle estate in July for $1.845 million after the former Minnesota governor successfully argued he was defamed by a passage in American Sniper. The book claimed Kyle had punched out a man he later identified as Ventura in a bar in 2006 after the man had said that the SEALs "deserved to lose a few" in the war. Publisher HarperCollins then agreed to remove the passage in question from the book.

Taya Kyle has said that she will struggle to pay more than $1 million of that verdict herself. Forged.com, a clothing company that sells officially licensed American Sniper merchandise, raised more than $1 million in donations in a week to cover part of what the Kyle family might owe Ventura. It is continuing to give a portion of sales on the site to the Chris Kyle Frog Foundation, which Taya oversees. She also has received other donations intended to help her pay whatever part of the Ventura judgment, if it stands, that HarperCollins' insurance does not cover.

Despite the acrimony, legal experts say Taya almost certainly owes no legal obligation to pay the families of her husband's comrades. Laura Zwicker, a Los Angeles attorney who specializes in trusts and estates, says that in the absence of a binding contract like a will, the Lee and Job families would have "no claim." But, continues Zwicker, "Whether [Taya] has a moral obligation is a whole different story. Legally, all of the assets of the estate, including his intellectual property, would pass to [Taya] as his beneficiary."

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'Divorce Was a Very Real Possibility'

After a nasty battle, Taya Kyle and the bankrupt company her husband founded that helped negotiate contracts with HarperCollins and Warner Bros. finally are ready to settle.

While American Sniper has been playing on movie screens, a messy sequence of accusations and litigation has played out between key players in the company that Chris Kyle co-founded, Craft International LLC, and his widow, Taya. Final approval on a settlement in bankruptcy court was expected Feb. 17 in an action Taya initiated against Dallas hedge fund manager J. Kyle Bass and other investors in Craft as well as Bass' attorney, Christopher Kirkpatrick.

Chris Kyle and Bass met at a fortuitous moment in the soldier's life. After retiring as a Navy SEAL in 2009, Kyle found the transition to civilian life rough. "I started drinking a lot, pounding back beers," he wrote in American Sniper. "I'd say I went into a depression."

Kyle had an idea to use his SEAL training to start a company that would provide training to police, military and security personnel, but he lacked funds. That changed in 2010, when he met Bass, who had made millions by shorting subprime mortgage bonds in the run-up to the 2008 financial crisis.

Bass had attended a program in California run by former SEALs to help him lose weight. When it ended, he told organizers that he hoped he could help SEALs make the transition to civilian life. Within weeks, he got a call about Chris Kyle. Bass flew Kyle to Dallas, and they became friends. When Bass heard that Kyle wanted to start a company, he put together investors — including New York hedge fund manager Daniel Loeb and legendary Dallas Cowboys quarterback Roger Staubach — who provided Kyle funds to live and eventually raised a total of about $2.6 million to form what became Craft International.

Bass, who declined comment, could have extracted a big share of the equity in Craft. Instead, he and investors structured the deal as a series of convertible loans so that if Craft was successful, Kyle would end up owning about 85 percent.

Bass gave Kyle and Craft the use of a 41,000-square-foot ranch outside Dallas to stage training sessions and meetings; free office space; and made his own attorney, Kirkpatrick, available to act on behalf of the Kyles and Craft. Kirkpatrick assisted Kyle in renegotiating contracts signed before the book was published and helped clear the way for the Warner Bros. movie. Bass, through his company, also bought the Kyles a house and allowed the family to live in it rent-free.

Shortly after Kyle's funeral in February 2013, Bass visited Taya and promised to give her ownership of the home. She details that promise in her legal filing and notes he did not follow through. But other sources claim Bass conditioned his gift of the home on Taya giving proceeds from the book and movie to the Lee and Job families.

After Kyle's death, Taya sought access to the records of Craft. She said in her suit that her husband owned 85 percent and alleged the partners were mishandling company funds.

The Craft partners responded that the agreement they made with her husband specifically "excludes" his wife (and the wives of other partners). In a legal filing, the partners wrote: "Chris Kyle insisted that such a provision be inserted due to the discord in his marriage and his belief that divorce was a very real possibility. In the event of divorce or his death, Chris did not want Taya to have any involvement in Craft aside from being cashed out at fair market value." To that end, the Craft partners hired an independent accountant who offered Taya $12,500 for her husband's stake, which she refused.

Taya also demanded that Craft give her the right to use her husband's name and image and the use of a company logo he had helped design. The partners responded that Taya knew her demands would leave Craft's ability to stay in business "severely hampered."

In February 2014, Craft filed for bankruptcy protection and the partners lost their investments, but Taya claimed it was done in bad faith to wipe out the estate's equity interest. At the time, Craft reported assets of $129,540 and liabilities of $2.96 million. In late 2014, Taya, Bass and others reached a deal. The partners agreed to stop using Kyle's name and image, which now belong to Taya.

She received no money from Craft, but Bass agreed to let her continue to live in the home until Oct. 30, after which she can buy the house for $314,612 or pay rent to remain.

CORRECTION: 2/19 10:15 a.m. The publication date of the book American Sniper was incorrectly stated in an earlier version. It was published in January 2012.