Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Interesting Legal Case In New York
Old 05-31-2011, 12:57 PM   #1
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,322
Interesting Legal Case In New York

A man in New York is suing his ex-wife to have their divorce agreement revised due to money lost in the Madoff Ponzi scheme. If he wins, this could potentially have far-reaching effects on other contracts.
__________________

__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-31-2011, 02:16 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,037
Quote:
Originally Posted by FIRE'd@51 View Post
A man in New York is suing his ex-wife to have their divorce agreement revised due to money lost in the Madoff Ponzi scheme. If he wins, this could potentially have far-reaching effects on other contracts.

After I finished laughing I would pack up & move to a remote location .
__________________

__________________
Moemg is offline   Reply With Quote
Old 05-31-2011, 03:11 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,649
This one is insane. Why is it even in court? It isn't like the settlement itself forced him to use Madoff. He chose to stay with Madoff, she chose to go her own way. He lost, she won -- live with it. I could see the argument if this was an alimony situation. E.g. if the guy had to pay his wife $1M/year and then lost all his money. But these two split the dough and went their own ways.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 05-31-2011, 03:15 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,290
Very interesting.....


One of the issues that I have is that the trust lawyer is going after people who did pull out their money... so let's say that at the time of the divorce all the money was pulled out and distributed to each..

Now, the lawyer sues to get the money over and above what they had put into the account... (not sure if he has won any lawsuits, but I think some people has paid him alread)... who would he go after? Or would he go after both of them...

IOW, I would think that there is a 'fairness' issue here that is hard to decide...
__________________
Texas Proud is offline   Reply With Quote
Old 05-31-2011, 03:46 PM   #5
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,322
Quote:
Originally Posted by donheff View Post
It isn't like the settlement itself forced him to use Madoff. He chose to stay with Madoff, she chose to go her own way. He lost, she won
Simkin is arguing that the value of the Madoff account when they split it at the time of the divorce was not what they thought, so she got half of an incorrectly valued asset. From the article:

But once the Madoff empire collapsed, Mr. Simkin began arguing that he and Ms. Blank were mistaken about the existence of the account. "There was in fact no account and no securities or other assets," wrote Mr. Simkin's lawyers in a recent filing. "There was only a Ponzi scheme of unprecedented size and duration."
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline   Reply With Quote
Old 05-31-2011, 06:01 PM   #6
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,163
As I read the article, they split the real property. She got the apartment in the City and he got the house in Scarsdale. Suppose she sold the apartment as soon as the decree was final and got out at the peak of the market, while he held on to the house and saw it decrease drastically in value. Does he get to reopen the divorce decree for that? I don't see much difference.
__________________
Living an analog life in the Digital Age.
Gumby is online now   Reply With Quote
Old 05-31-2011, 06:27 PM   #7
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,322
Quote:
Originally Posted by Gumby View Post
As I read the article, they split the real property. She got the apartment in the City and he got the house in Scarsdale. Suppose she sold the apartment as soon as the decree was final and got out at the peak of the market, while he held on to the house and saw it decrease drastically in value. Does he get to reopen the divorce decree for that? I don't see much difference.
I'm not a lawyer, but it seems to me that the difference between Simkin's argument and the one you are making is that Simkin is claiming that the Madoff portfolio was, in reality, worthless at the time the divorce settlement was reached (although no one knew it at that time). That is different from holding on to a valuable asset and watching its value decline going forward due to normal market forces.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline   Reply With Quote
Old 05-31-2011, 06:30 PM   #8
Thinks s/he gets paid by the post
SteveR's Avatar
 
Join Date: Jul 2005
Posts: 2,803
I'm not an attorney and don't play one on TV but even I can see this is a crock of legal toro crappo.

The key paragraph for me from the article is:
"Just as she would not have benefited from any increase in the value of the account, she should not have to bear the burden of its loss," she wrote. "Steven received exactly what he bargained for. He alone took on the risk that he might not be able to recoup his investment."

Having been through a divorce myself I can see the need for closure at the time of the divorce. Future value of assets should not enter into the calculations at the time of the divorce just as future earnings or losses should not be considered because they did not exist at the time of the divorce.

The fact that his law firm is doing the litigation gratis is the icing on the cake. This is litigation for the sake of it and should not tie up the legal system one second longer but being NY I can see this going on for a long long time.
__________________
Work? I don't have time to work....I'm retired.
SteveR is offline   Reply With Quote
Old 05-31-2011, 06:53 PM   #9
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,492
This case is not about the law, it is about the lawyers.
__________________
MichaelB is offline   Reply With Quote
Old 05-31-2011, 08:37 PM   #10
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,163
Quote:
Originally Posted by FIRE'd@51 View Post
I'm not a lawyer, but it seems to me that the difference between Simkin's argument and the one you are making is that Simkin is claiming that the Madoff portfolio was, in reality, worthless at the time the divorce settlement was reached (although no one knew it at that time). That is different from holding on to a valuable asset and watching its value decline going forward due to normal market forces.
But the Madoff portfolio was not worthless at the time. In fact, its value was established when Mr. Simkin sold off a portion of that investment to pay cash proceeds to his ex-wife. He could have sold the rest of it at the same time and gained cash for himself, but he held on instead. Indeed, he could have taken cash and turned around the next day and invested with Sir Alan "whatever in the hell his name was" or some other scoundrel. We wouldn't feel sorry for him then, would we?

To be fair to Mr. Simkin, it is my understanding that the trustee of the Madoff bankruptcy estate sued those who had cashed out for a portion of the amount they took in order to redistributed some money to those who were later investors or who had never sold. The equities of the situation may require that the former Mrs. Simkin return the same proportion of her proceeds that she would have been required to return if she had cashed out directly, instead of indirectly through Mr. Simkin.

However, I side with those who say a contract is settled and should not be disturbed due to subsequent events, absent truly extraordinary circumstances. If you want to return to my real property hypothetical, what would you say if a tornado wiped out the Scarsdale home two years after the divorce? Would that change your analysis? That event probably would not have been within the contemplation of the Simkins when they split the assets.
__________________
Living an analog life in the Digital Age.
Gumby is online now   Reply With Quote
Old 05-31-2011, 09:43 PM   #11
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Quote:
Originally Posted by MichaelB View Post
This case is not about the law, it is about the lawyers.
There's no such thing as bad publicity, especially for lawyers. Everyone loves to talk trash about a vicious litigator while secretly keeping their phone numbers in their "in case of emergency" bailout directory.

It's my understanding that the lawyer(s) will be able to collect on their invoices whether they win or lose...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 05-31-2011, 10:39 PM   #12
Thinks s/he gets paid by the post
GregLee's Avatar
 
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
Quote:
Originally Posted by Gumby View Post
But the Madoff portfolio was not worthless at the time.
Maybe it would clarify to consider a hypothetical analogous situation where there was a lockbox purported and assumed by all to contain 200 pounds of pure gold, which is later shown to be mere pyrite. Before the box was opened, it was used to settle a large debt. When the box is opened and the fraud revealed, do we count the debt as, nonetheless, still settled? Similarly, suppose a debt was settled using money assumed genuine, but later shown to be counterfeit.
__________________
Greg (retired in 2010 at age 68, state pension)
GregLee is offline   Reply With Quote
Old 06-01-2011, 05:52 AM   #13
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,163
Quote:
Originally Posted by GregLee View Post
Maybe it would clarify to consider a hypothetical analogous situation where there was a lockbox purported and assumed by all to contain 200 pounds of pure gold, which is later shown to be mere pyrite. Before the box was opened, it was used to settle a large debt. When the box is opened and the fraud revealed, do we count the debt as, nonetheless, still settled? Similarly, suppose a debt was settled using money assumed genuine, but later shown to be counterfeit.
Standard mutual mistake of fact scenarios. But in either of these cases, he could not have cashed out on the day of the divorce. With the Madoff investment, he could (and did, partially)
__________________
Living an analog life in the Digital Age.
Gumby is online now   Reply With Quote
Old 06-01-2011, 09:59 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,290
Quote:
Originally Posted by Gumby View Post
Standard mutual mistake of fact scenarios. But in either of these cases, he could not have cashed out on the day of the divorce. With the Madoff investment, he could (and did, partially)
But as you said, the Madoff trustee is suing people who got more out of the estate than they put in...

You did not answer the question that I posted... what if he DID take all of the money out and split it with his wife... but now the trustee comes along and asks for the 'gains' back... who should pay

IMO, both should pay... because it is a debt that was not known at the time of divorce and it was not addressed in the divorce....


The difficulty would be on the amount... how much of her money should she have to pay?
__________________
Texas Proud is offline   Reply With Quote
Old 06-01-2011, 10:16 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Quote:
Originally Posted by Texas Proud View Post
But as you said, the Madoff trustee is suing people who got more out of the estate than they put in...

You did not answer the question that I posted... what if he DID take all of the money out and split it with his wife... but now the trustee comes along and asks for the 'gains' back... who should pay

IMO, both should pay... because it is a debt that was not known at the time of divorce and it was not addressed in the divorce....


The difficulty would be on the amount... how much of her money should she have to pay?
Speaking as a man, all of it!

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 06-01-2011, 11:28 AM   #16
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,492
Quote:
Originally Posted by Nords View Post
There's no such thing as bad publicity, especially for lawyers. Everyone loves to talk trash about a vicious litigator while secretly keeping their phone numbers in their "in case of emergency" bailout directory.
Thatís for sure

Quote:
Originally Posted by Nords View Post
It's my understanding that the lawyer(s) will be able to collect on their invoices whether they win or lose...
Yes. Like stock brokers, financial advisors, mutual fund and hedge fund managers. Itís no wonder theyíre so popular and well respected.
__________________
MichaelB is offline   Reply With Quote
Old 06-01-2011, 05:32 PM   #17
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,163
Quote:
Originally Posted by Texas Proud View Post
You did not answer the question that I posted... what if he DID take all of the money out and split it with his wife... but now the trustee comes along and asks for the 'gains' back... who should pay

I think I did address your question, at least obliquely. See post #10, second paragraph.

Ultimately, this is what horse races and lawsuits are all about. We know the issues and the arguments on each side. We won't know the outcome until the Court of Appeals rules.
__________________
Living an analog life in the Digital Age.
Gumby is online now   Reply With Quote
Old 06-01-2011, 10:48 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,290
Quote:
Originally Posted by Gumby View Post
I think I did address your question, at least obliquely. See post #10, second paragraph.

Ultimately, this is what horse races and lawsuits are all about. We know the issues and the arguments on each side. We won't know the outcome until the Court of Appeals rules.
Sorry... missed that part..

But that is exactly why I said it was not an easy call to make... I would lean to the return of gain aspect... but then again, there is nothing mentioned about returning money to the Madoff trust... if there is not, then I do think it is to bad for Mr. what's his name....
__________________

__________________
Texas Proud is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Photo op over New York FinallyRetired Other topics 34 04-30-2009 07:23 PM
Hi From Upstate New York Mickey Hi, I am... 33 10-10-2008 07:01 PM
Hello from New York popowich Hi, I am... 10 06-22-2008 06:27 PM
Interesting Job Market-Interesting Blog greg Other topics 1 12-18-2005 01:42 PM
Interesting article in New York Times Traveler Other topics 17 05-19-2004 05:21 AM

 

 
All times are GMT -6. The time now is 09:41 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.