Unfortunately, when a divorce becomes contentious, particularly a high-asset divorce, it is not uncommon for a spouse to hide assets. Many Marietta residents think that their soon-to-be exes would never do such a thing, but divorce can bring out the worst in people. In order for the property and asset division process to be fair, it is critical for all assets to be accounted for and properly valuated.
A woman has recently filed a lawsuit against her ex-husband, accusing him of purposely providing an undervaluation of business assets during their divorce. In addition to this, she claims that her ex paid her divorce attorney to settle the divorce quickly, in order for the asset division to fall greatly in his favor.
The couple, an interior designer and a multimillionaire commodities trader, divorced in 2011 after 16 years of marriage. One of the assets at stake in the divorce was the husband’s majority ownership of an ethanol company. The man’s divorce attorney reportedly had a recent law school graduate valuate the business asset; he came up with $15 million.
The woman has claimed that her attorney–whom she hired at the recommendation of her then husband–did not recommend an independent valuation, and she ultimately accepted $6.8 million of the company in the divorce.
Less than one year after the divorce became official, however, her ex-husband sold his share of the company for $100 million.
She is now accusing him of fraud, and her attorney of legal malpractice, for bilking her out of millions of dollars by purposely under valuing the asset.
According to her lawsuit, her now ex-husband pushed to have the divorce finalized days before a U.S. import tariff was going to expire. Industry analysts had estimated that ethanol exports would increase substantially upon the tariff’s expiration. This, of course, would mean the worth of the man’s ethanol business would increase.
The allegations in this lawsuit illustrate several very important lessons. First, it is important that each party to a contentious divorce obtains legal counsel. In order to avoid a potential conflict of interest, it is wise for each person to select his or her own attorney. Second, accurate appraisals of assets are essential in order to secure a fair divorce settlement. In high-asset divorces, skilled attorneys may bring in forensic accountants and other specialists during this process. Finally, while obtaining a divorce quickly is preferable for a number of reasons, it is important not to take shortcuts. Spend time now ensuring that your interests will be protected into the future.
Source: The Tennessean, “Williamson woman says ex sped up divorce, then sold $100M company,” Bobby Allyn, July 31, 2013