Readers in St. Charles will be interested to hear that a court recently threw out a man's appeal to change his divorce settlement six years after the agreement was signed. The case has made headlines mainly because of its connection to the Bernie Madoff scandal but also for the sizable amounts of money involved. Missouri residents who are going through a divorce and have significant monetary assets may want to take note.
In accordance with the divorce settlement, the man's former wife received $6.25 million as part of an equitable distribution of property. However, the ex-husband argued that he and his former wife made a mutual mistake in being defrauded by Madoff for $5.4 million. In other words, the ex-husband argued that he was entitled to half of the $5.4 million which Madoff had taken but never invested properly. In fact, the investment fund didn't even exist.
The ex-husband argued that his half of the $5.4 million should come from the $6.25 million his ex-wife received in the divorce settlement. But the appeals court disagreed, noting that the former couple's division of property was decided upon two years prior to the discovery of Madoff's Ponzi scheme in 2008.
Since the ex-husband could have redeemed the $5.4 million investment before 2008, he wasn't entitled to any portion of the ex-wife's half of the divorce settlement. Moreover, he admitted that he could have withdrawn funds from the $5.4 million in order to pay his former wife her half of the divorce settlement.
The appeals court essentially ruled that the couple did not make a mutual financial mistake and that the case was not an "exceptional situation." The court reversed a lower court ruling that reinstated the man's request to have the divorce settlement re-determined.
According to the ex-wife's attorney (not affiliated with this firm), her former husband was trying to complicate matters with litigation in an effort to cut in on part of the divorce settlement that didn't belong to him.
While these court proceedings took place in New York, Missouri residents who are involved in high asset divorce may have similar concerns. To prevent or deal with this kind of conflict, divorcing couples will want an accurate valuation of marital property and a fluent interpretation of Missouri divorce law.
Source: Auburn Pub, "NY's top court refuses to undo divorce settlement," April 3, 2012