In the 

United States Court of Appeals 

For the Seventh Circuit ____________________ 

Nos. 13-3847, 14-2214, 14-2215, 14-3533 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee / Cross-Appellant, 

v.

MICHAEL SEGAL, 

Defendant-Appellant / Cross-Appellee. 

____________________ 

Appeals from the United States District Court for the 

Northern District of Illinois, Eastern Division. 

No. 02 CR 112-1 — Rubén Castillo, Chief Judge. 

____________________ 

ARGUED OCTOBER 30, 2015 — DECIDED JANUARY 21, 2016 

____________________ 

Before POSNER, RIPPLE, and HAMILTON, Circuit Judges. 

POSNER, Circuit Judge. Some years ago Michael Segal—

lawyer, certified public accountant, insurance broker—was 

indicted along with Near North Insurance Brokerage 

(NNIB), a company he owned, for multiple violations of federal law. He was charged with racketeering, mail and wire 

fraud, making false statements, embezzlement, and conspir-
2 Nos. 13-3847, 14-2214, 14-2215, 14-3533 

ing to interfere with operations of the Internal Revenue Service. NNIB was charged with mail fraud, making false 

statements, and embezzlement. Both defendants were convicted in 2004, and the following year Segal was sentenced 

to 121 months in prison. United States v. Segal, 495 F.3d 826, 

830 (7th Cir. 2007). After further proceedings, see 644 F.3d 

364 (7th Cir. 2011), he was resentenced to time served and 

ordered to pay $842,000 in restitution and to forfeit to the 

government his interest in the company and $15 million.

To resolve a series of disputes that arose over the forfeiture judgment and had not been resolved either by the district court or in either of the decisions (cited above) by this 

court, the parties in 2013 agreed to a binding settlement that 

specified the final ownership and disposition of certain of 

Segal’s assets. Segal, by then released from prison, participated actively, indeed aggressively, in the negotiation of the 

settlement. But after the district judge approved the settlement the parties clashed over three issues concerning the 

disposition of Segal’s assets and returned to the district court 

for a resolution of those issues. The judge resolved two of 

them against Segal and the third in his favor, giving rise to 

three appeals—two by Segal, one by the government—that 

we have consolidated for briefing, argument, and decision. 

(They were separate appeals, rather than a single appeal, because the orders giving rise to them had been issued by the 

district court at different times.) The fourth appeal, No. 14-

2215, related to a writ of mandamus filed by Segal that he 

has now abandoned; we ignore it. 

The first of Segal’s two appeals relates to insurance policies on his life. The settlement agreement gave him two of 

the eight policies outright and an option to purchase all or 
Nos. 13-3847, 14-2214, 14-2215, 14-3533 3 

some of the others, but required that he exercise the option 

within six months of the district court’s approval of the settlement; otherwise the option would be forfeited. He opted 

to purchase one of the remaining six policies before the 

deadline and asked the court to extend the deadline for the 

others. He said he needed time to raise money to buy them 

because the government hadn’t promptly released money 

owed to him. He also complained that the government had 

delayed his efforts to obtain information from the insurance 

companies. 

The judge refused to extend the deadline, pointing out 

that paragraph 9(e) of the settlement agreement “sets up a 

very precise timeframe that doesn’t condition [the deadline 

for exercising the right to purchase the insurance policies] on 

the release of other moneys.” The paragraph gives Segal 

a right to exercise an option to purchase all remaining insurance policies held by Near North Insurance Brokerage as listed on Exhibit A at the cash 

surrender value computed when, and if, the option 

is exercised. The option to purchase these insurance 

policies must be exercised no later than six months 

from the date the Settlement Stipulation is approved by this Court. Segal shall exercise this option by sending a letter to the United States Attorney for the Northern District of Illinois, to the attention of the undersigned Assistant United States 

Attorney, which identifies the policy or policies he 

intends to purchase. Within thirty days of receipt of 

the letter, the cash surrender values of the policy or 

policies shall be provided to Michael Segal. Fifteen 

days after receipt of the cash surrender information, defendant Segal shall pay good funds for 

the purchase of the policy or policies. If the option 
4 Nos. 13-3847, 14-2214, 14-2215, 14-3533 

is not exercised or the funds are not received as required, the government shall liquidate the policy or 

policies.

The method of exercising the option was thus clearly stated: 

the dispatch of a letter to the prosecuting assistant U.S. Attorney within six months of the court’s approval of the settlement. If the letter was dispatched by the deadline, Segal 

would have up to 45 days to pay for the policies, depending 

on when the government told him what their cash surrender 

values were. 

He argues that it was unreasonable to expect him to raise 

the money before the six-month deadline. Maybe so; but that 

was not the deadline for raising the funds—it was the deadline for notifying the government that he was exercising the 

option. He would have had an additional 15 days at least, 

and 45 at most, after the six-month deadline to raise the 

money, but only if he exercised the option before the deadline. 

He argues that the government withheld from him both 

information that he needed in order to determine the value 

of the policies that he was considering trying to buy and also 

cash that the government was obligated to return to him after he satisfied the forfeiture judgment. These arguments 

have no merit. The government helped Segal obtain information about the policies (namely their cash surrender values) prior to the option deadline by writing the insurance 

companies. Although one of the companies was slow to 

supply the information, that was not the government’s fault. 

In any event paragraph 9(e) required only that the government inform Segal of the cash surrender values of the policies after he had exercised his option to purchase them. 
Nos. 13-3847, 14-2214, 14-2215, 14-3533 5 

As for his annoyance that the government failed to 

promptly release funds to which he was entitled—funds he 

might have used to buy the policies—the option to buy them 

was not conditioned on the government’s release of other 

assets to him. Nor was the government the only potential 

source of money with which to buy the policies. They had 

value and so a bank might have been willing to lend money 

against them. The loan would have enabled Segal to buy the 

policies and repay the loan once the government released 

the funds owed him.

He had only himself to blame for much of the delay in 

the government’s release of funds to him. For example, the 

settlement agreement required him to transfer to the government his ownership interest valued at $750,000 in Sheridan House Associates, a real estate limited partnership. He 

refused on the ground that he’d conveyed half his ownership interest to his former wife back in 2003. But she had executed a release of her interest in all assets that the government had restrained, thus clearing away any obstacle to the 

transfer of the entire ownership interest to the government. 

Paragraph 11 of the settlement agreement states that if any 

property that was to be transferred to the government “is 

not available to satisfy the forfeiture judgment because it has 

been otherwise transferred, encumbered or alienated, indirectly or directly by defendant Segal, he shall owe the United States the appraised value of the asset.” 

Had Segal transferred the ownership interests promptly, 

he would have received $750,000 that he could have invested 

in the purchase of the insurance policies. But he refused to 

execute a release of his interest. Six months of litigation ensued, in which the ex-wife intervened seeking a share of the 
6 Nos. 13-3847, 14-2214, 14-2215, 14-3533 

ownership interest. The dispute was finally resolved when 

the district judge ordered that the entire interest be transferred and that the government release the $750,000 to Segal. 

But by then the deadline for the exercise of the option to buy 

the insurance policies had expired; the fault was Segal’s and 

his ex-wife’s. 

Segal’s second objection to the administration of the settlement agreement relates to the Chicago Bulls basketball 

team. As part of the settlement, the government retained half 

of Segal’s ownership interest in the Bulls, an interest consisting of a 1.7 percent limited partnership interest in the Chicago Bulls basketball franchise, a 1.1 percent interest in its stadium (the United Center), and a 1.1 percent interest in its 

broadcasting company (Bulls Media)—for simplicity we’ll 

call the entire package the Bulls investment, the value of 

which the government estimated at $4.175 million. The settlement agreement gave a half interest back to Segal plus a 

right of first refusal of any offer made to the government for 

its half interest—but with conditions, as explained in paragraph 9(f) of the settlement agreement: 

Defendant Michael Segal shall retain the right of 

first refusal on a commercially reasonable, responsible cash offer made to the United States for the 

purchase of the government’s ownership interest 

within six months of the approval of the Settlement 

Stipulation. Within seven days of receipt of an acceptable offer, the United States shall notify Michael Segal of the offer. To exercise his right of first 

refusal to purchase the interest of the United States, 

Michael Segal must notify the United States Attorney for the Northern District of Illinois, within seven days of receiving said notice from the United 
Nos. 13-3847, 14-2214, 14-2215, 14-3533 7 

States[,] of his intent to purchase the government’s 

interest in the partnership at the cash offer received, and within ten days of serving notice shall 

provide good funds in that amount for the purchase of the government’s interest. If no acceptable 

offer is received by the United States within six 

months from the date the Settlement Stipulation is 

approved by this Court, defendant Segal shall have 

the option to purchase the government’s partnership interests with good funds at the appraised 

value set forth on Exhibit A within thirty days after 

the expiration of the six month period. No later 

than seven days prior to the expiration of the six 

month option period, defendant Segal shall notify 

the government of his intention to purchase the 

partnership interest, and shall provide good funds 

for the purchase of the government’s interest in the 

partnership interest within ten days of the date of 

the notification. 

The key sentence is the first: the grant to Segal of a “right of 

first refusal on a commercially reasonable, responsible cash 

offer made to the United States for the purchase of the government’s ownership interest within six months of the approval of the [settlement].” 

Within the six-month period the government received a 

$2.9 million offer for the Bulls investment from Peter Huizenga, a lawyer and wealthy investor who had been a founder of Waste Management Company. Segal didn’t match 

Huizenga’s offer, so he didn’t get to repossess the other half 

of his original investment in the Bulls. He contends that the 

offer the government received from Huizenga was not a 

“commercially reasonable, responsible cash offer ... [to] purchase” because it allowed the offeror to withdraw his offer 
8 Nos. 13-3847, 14-2214, 14-2215, 14-3533 

for any reason after the completion of due diligence. The 

government argued, and the district judge ruled, that the offer was commercially reasonable; but neither the district 

judge, nor the government either in the district court or in 

our court, gave more than perfunctory consideration to the 

issue of reasonableness. 

A contract is a commitment, which if violated gives rise 

to a right to sue. An unconditional offer becomes a contract 

as soon as it’s accepted. Many offers, however, are conditional. One might for example make an offer to buy a house 

conditional on being able to obtain a mortgage for a certain 

duration at a certain interest rate, to have the house inspected for termites, to inspect for liens, to have the sturdiness of 

the construction checked, and so forth. That offer, with all its 

conditions, would if made in good faith nevertheless be 

“commercially reasonable,” as the offeree would understand 

that he’d have a deal were the conditions fulfilled. Huizenga’s offer, however, did not have a finite number of conditions; it preserved his “sole and absolute discretion” to 

withdraw the offer for any reason. 

Segal hints that in requiring that the offer be “acceptable,” paragraph 9(f) of the settlement agreement required 

that the offer had to be capable of being accepted by the 

government, thus forming a contract. But the natural meaning of “acceptable” in this context is that the offer, since it 

did not bind the offeror, would have to be an acceptable basis for negotiations—for example by specifying a reasonable 

price that the government would have to consider as the 

parties began to negotiate the terms of the contract. Huizenga’s offer was acceptable in that limited sense even though 
Nos. 13-3847, 14-2214, 14-2215, 14-3533 9 

it did not commit him to purchase the investment in the 

Bulls.

What casts the offer’s commercial reasonableness into serious question begins with the fact that the Bulls are privately owned and that before the purchase could be completed a 

prospective purchaser of an investment in the Bulls (the offeror, in other words—Huizenga) would need both to dig for 

information about the franchise and to obtain the approval 

of both Jerry Reinsdorf (the Bulls’ majority owner and managing partner) and the National Basketball Association, to 

become a partner in the Bulls enterprise (which Huizenga 

wanted to become). The government had only six months 

after the approval of the settlement agreement within which 

to obtain a commercially reasonable offer. Huizenga could 

have made his offer conditional on receiving the approvals 

he wanted rather than reserving the right to withdraw the 

offer for any (or for that matter for no) reason. Such an offer 

would have been commercially reasonable. But he refused to 

commit himself.

When the offer was made, the government sent a copy to 

Reinsdorf, and that kicked off negotiations with Huizenga. 

But after extensive negotiations involving the NBA, 

Reinsdorf decided not to allow Huizenga, despite the investment in the Bulls that he would be making, to become a 

full partner. As a result, Huizenga withdrew his offer. 

As we said in Architectural Metal Systems, Inc. v. Consolidated Systems, Inc., 58 F.3d 1227, 1229 (7th Cir. 1995), “the recipient of a hopelessly vague offer should know that it was 

not intended to be an offer that could be made legally enforceable by being accepted.” That doesn’t make such an offer commercially unreasonable; our home-buying example 
10 Nos. 13-3847, 14-2214, 14-2215, 14-3533 

shows that contingent offers can be commercially reasonable. The problem in this case is the impact of Huizenga’s 

highly tentative offer on Segal’s legitimate interests. According to the government and the district judge, to repossess his 

original half-interest in his Bulls investment pursuant to 

paragraph 9(f) of the settlement agreement Segal had to 

meet Huizenga’s offer without knowing whether it was realistic. Huizenga was offering $2.9 million for an investment 

that had been appraised at only $2.09 million, and Segal argues that because Huizenga’s offer had been withdrawn he 

(that is, Segal) should have been allowed to purchase the investment at the appraised value. For he had notified the 

government of his intent to purchase it before the government had received Huizenga’s offer and more than seven 

days before the expiration of the six-month option granted 

Segal by the settlement. 

True, Segal could purchase the investment at the appraised value only if no acceptable offer had been received 

by the government within six months, and Huizenga’s offer 

made the deadline. But what was acceptable to the government could be unreasonable because of the impact on another party, namely Segal. Because Huizenga’s offer was not 

binding and might therefore have been inflated—intended 

as a gambit for opening negotiations and in any event dependent on what his review of the Bulls’ financial information might reveal—Segal could have no confidence that 

$2.9 million was a realistic valuation; if it was excessive, then 

by exercising his right of first refusal Segal would have 

found himself having overpaid for the investment. The form 

of Huizenga’s offer forced Segal, the holder of the right of 

first refusal, to choose between paying what might be way 

too much and giving up his right of first refusal. He had no 
Nos. 13-3847, 14-2214, 14-2215, 14-3533 11 

firm ground on which to stand, given that Huizenga was 

free at any time to renege on his offer, as it was “intended as 

a statement of the intent of the parties and is not intended to 

be binding on any party. Any binding agreement with respect to this matter is subject to the negotiation of a mutually 

acceptable Definitive Agreement as set forth herein.” Segal 

may also have reasonably interpreted paragraph 9(f) of the 

settlement agreement to conform to the usual practice, in the 

sale of professional sports teams, of prospective buyer and 

prospective seller to make a binding agreement conditional 

on approval by the league (the NFL in the case of football, 

the NBA in the case of basketball). See Beacon on the Hill 

Sports Marketing, “Investment Proposal Summary: Process 

for Buying an NFL Team, General Partnership or Limited 

Partnership Investment,” www.beacononthehillsportsmark

eting.com/pages/leaguesfranchises_nflinvestmentproposal.h

tm; Constitution and By-Laws of The National Basketball Association, Article 5, pp. 8–9, May 29, 2012, http:mediacent

ral.nba.com/media/mediacentral/NBA-Constitution-and-ByLaws.pdf (both websites visited January 20, 2016). 

Segal was authorized to purchase the Bulls investment at 

the appraised value “if no acceptable offer [wa]s received by 

the United States within six months,” and that appears to 

have been the case. The offer was acceptable to the government, but to be acceptable to Segal, an interested party, it 

would have had to be a firm offer—a reliable estimate of the 

market price of the Bulls investment formerly owned by 

Segal that would enable him to determine whether to pay 

that price. The expectation was disrupted by Huizenga’s offer, which the district court should therefore have rejected. 

The district court must allow Segal to exercise with all delib-
12 Nos. 13-3847, 14-2214, 14-2215, 14-3533 

erate speed his option to repurchase the remaining half of 

his interest in the Bulls for the appraised value. 

So much for Segal’s appeals. The government’s appeal 

relates to another asset that the government retained as part 

of Segal’s criminal punishment—stock, worth about 

$467,000, in the Rush Oak Corporation, a bank holding company. The government claims that the parties agreed as part 

of the settlement that the United States would keep the stock 

in order to satisfy the forfeiture judgment. Paragraph 12 of 

the settlement agreement states: 

All parties agree that upon approval of the Settlement Stipulation by the Court, the personal judgment in the amount of $15 million entered against 

defendant Segal shall be satisfied and the United 

States shall have no further claim against defendant 

Segal relating to the entry of the forfeiture judgment against him personally. Upon entry of a final 

order of forfeiture against the remaining property 

identified on Exhibit A, but not listed on Exhibit B, 

all right, title, and ownership interest in that remaining property shall vest in the United States 

and no one, including defendant Michael Segal, 

shall have any further claim to the property. 

Thus the government would keep the assets that were listed 

on Exhibit A but not those listed on Exhibit B; those Segal 

would keep. But there’s a problem: the Rush Oak stock is not 

listed on either exhibit. 

Upon approval of the settlement agreement the $15 million forfeiture judgment against Segal was satisfied and 

Segal moved to have the Rush Oak stock released to him on 

that ground. But the government presented evidence that in 

the negotiations leading up to the settlement agreement the 
Nos. 13-3847, 14-2214, 14-2215, 14-3533 13 

early versions of Exhibit A listed Rush Oak, but Exhibit B 

never listed it. The assistant U.S. attorney who was handling 

this part of the government’s case handed Segal’s lawyer a 

draft he had prepared of Exhibit B—and it did not include 

the Rush Oak stock. Subsequent drafts excluded the stock 

from both lists. 

While there was no discussion of the Rush Oak stock 

during the settlement negotiations, there were explicit negotiations about the Oak Bank stock, and Segal claims that the 

government’s agreement to release the Oak Bank stock also 

covered the stock of Rush Oak, the holding company for 

Oak Bank. But the government presented evidence that the 

two types of stock had always been mentioned separately on 

the asset schedules. And the government had said it was 

agreeing to release the Oak Bank stock because it was worth 

only about $20,000; this estimate could not have included the 

Rush Oak stock, valued at $467,000.

The district judge held a hearing on whether to release 

the Rush Oak stock to Segal, and noting the absence of the 

stock from Exhibit A ruled that Segal was entitled to it. But 

in so ruling he overlooked the possibility that the asset had 

been inadvertently omitted from both lists. 

The government asked that Segal’s lawyer be called as a 

witness. The judge refused lest that “start getting into attorney-client privilege matters.” No it wouldn’t. The government wasn’t asking to question the lawyer about confidential discussions with his client but only about whether the 

lawyer had seen the Rush Oak stock on the first version of 

Exhibit A, signifying that the government would retain it, 

and had noticed the omission on later versions but had not 

brought that to the court’s attention. 
14 Nos. 13-3847, 14-2214, 14-2215, 14-3533 

The evidence points to a mutual mistake of fact—both 

parties assumed the stock would be retained by the government but in the rush of drafting and redrafting of the settlement agreement had failed to mention it. The fact that the 

stock was left off both exhibits suggests that that particular 

asset (hardly a giant) was simply forgotten. There is no evidence that it was meant to be on Exhibit B, the list of assets 

to be returned to Segal. But the government properly argues 

that an evidentiary hearing, which the district judge did not 

hold, is necessary to resolve the issue. 

To summarize, we affirm the district judge’s ruling with 

respect to the insurance policies, but reverse his ruling with 

respect both to the Bulls investment and the Rush Oak stock 

and remand with directions to allow Segal to buy the Bulls 

investment at its appraised value and to conduct an evidentiary hearing of the government’s appeal regarding Rush 

Oak. The judgment entered by the district court is therefore 

AFFIRMED in part and REVERSED in part, and the case 

REMANDED with instructions.