Divorcing A Tycoon: You Win Some, You Win Some
When multi-millionaire fund manager Brian Myerson negotiated his divorce, he gave cash and assets to his wife and just took shares in his company as his portion of the joint assets. Cute, right? Well, this is one risk that didn't pay off for the edgy activist investor: his company's shares subsequently plummeted 90%, leaving the ex-wife walking off with what basically amounts to 105% of the divorce assets.
Myerson appealed his case in court — and lost. Unfair? Perhaps. Perhaps not. But either way, divorce lawyers have already noticed "a large increase in the number of high earners applying to reduce their maintenance payments, either because they have failed to receive bonuses or because their salaries have been slashed." Aww, diddums.
City tycoon hit by credit crunch fails to renegotiate divorce settlement [The Guardian]
(Photo: guano)
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Comments:
Gambling on the market is a poor decision. It's how some house flippers and investment property owners are in trouble now, because they felt the market didn't have anywhere to go but up.
And how does this relate to the average consumerist reader? I would expect to see this over @ jezebel...
@rbb: Hey I'm planning to be a Billion Dollar Tycoon and take over the world, so this info is good to know.
How about the billionaire who tried to get his wife to sign divorce papers written in German?
This one made me LOL in public. And then my office-mates all LOLed as well when I shared.
I've never understood why getting married as a woman is akin to winning the lottery. "I'm just glad to finally have something to look forward to in retirement, even if I get divorced...woohoo alimony payments!" I especially don't understand alimony if the man and woman are about equal going into the marriage. So her quality of life should be increased, at the expense of his...and...why? (not talking kids at all).
Divorce is such bullshit in this country. Every man that gets divorced get fucked. Unless the man initiates the divorce or gets caught cheating, he shouldn't owe shit.
Well, I don't have any sympathy for this guy (he gambled and lost; too bad), but I could feel for the guy that takes a pay cut asking for a reduction in Alimony.
@rbb: It's teaching you to be wise in how you make your decisions, and to not fall to the folly of thinking the market will always go up.
He should've just given her a drawing of a spider.
@pecan 3.14159265: I disagree. Gambling on the market isn't a bad idea, but not divesrfying is. This guy had all his assets invested in one basket. And in this case it was doubly bad cause he had all his assets invested in his company.
@TheFuzz53:
Some women get the shaft too, its just not as common for woman to be the primary breadwinners. I got the shaft in my divorce and got stuck with all of my ex's accumulated debt. Least I didn't get stuck with alimony.
@TheFuzz53: that's not true. if the women gives up the option of a career to stay home and raise kids, then she's entitled to money and child support. If she had nothing, married a wealthy guy, lived a great easy life for a couple years and then divorces him, she shouldn't get anything. The Paul Mccartney divorce shows the system at it's worst(although i guess that was england)
@B: I should have clarified my statements...gambling on the market isn't a bad idea, because obviously that's how the stock market works. But depending entirely on the market to fulfill your financial means (not diversifying) is a very bad idea.
@wgrune: Spousal support is largely limited to those situations wherein that was the situation within the marriage, and it's by no means limited to men. It's just that there more marriages based on the man as sole wage earner than the woman.
my only question is whether or not the law would view this the same way if the tycoon kept the cash/assets and gave away the stocks.
I personally have seen far too many instance of men getting the short straw when it comes to divorce proceedings actually making it to court.
@undefined: @rbb: In all fairness, this is the first time I've seen posts by Lucy Bayly, and this is happening in other posts as well. Maybe it takes some time to "break in" to the Consumerist mode or something. I'm giving the benefit of the doubt here. Kotaku added then quickly dropped a new writer after a lot of negative feedback within the article(s) and most of the time the editors take fair criticism. So I don't know. I can say that I personally don't think these posts fit in with the site but that's my opinion.
@TheFuzz53: A man's standard of living generally rises with divorce while a woman's falls. (Not as much as that problematic study a few years ago suggests, but the direction it indicates is still pretty sound.) So men do pretty well after divorce, actually.
Of course, there's always the pre-nup for people who are really concerned about protecting their assets.
Excellent picture choice.
Both my parents worked all their lives and made similar amounts of money (probably withing ~$10k of eachother anually). They got divorced and my dad is now required to pay my mom alimony.
A similar situation happened to a friend of mine. Two incomes; the man now pays the woman alimony.
"Ok, here's how we'll do it - you can have the car, the house, and the bank accounts; I'll keep this pile of lottery tickets. Mwa ha ha!"
Brilliant legal strategy there, Clarence Darrow.
@Sarcasmo - now with 21% more Roman content: Yeah, a lot of the commenters here don't seem to understand the other ramifications involved with selling or transferring stocks.
@Sarcasmo - now with 21% more Roman content:
I recall a case recently where the woman received some kind of ungodly amount (something like 20 million, a bunch of investment shares, home, cars, etc), and squandered it all. She refiled 20 years after the divorce to get more money, and the court awarded it to her...
@pecan 3.14159265: The market did go up. And up. And up. And up. There's just a certain point where it has to go back down again. A lot of people made a lot of money in the upswing. The savvy investors just knew when it was time to take their toys and go home.
@rbb:
there's a solution when you don't like articles the editors choose to publish: don't fucking read them
This is why Prostitutes make sense from an economic perspective.
@Sarcasmo - now with 21% more Roman content: I just did some checking, and it's an interesting picture. Spousal support occurs in only 10%-15% of divorces, and most of that is short-term, "rehabilitative" support. It's disproportionately an issue for divorces that get litigated--as you say, the ones you're seeing in court--but those are a considerable minority of divorces.
He gambled. He lost. He thought he was sticking it to her by taking stock and was VERY wrong. Lesson learned.
Maybe the fund should fire the husband and hire the wife instead.
@rbb: Don't you have a teabagging ceremony to attend or something? Whining trolls we don't really need...
@Saboth: lol! Woman pay alimony too, it just depends on who makes more. To say "getting married as a woman is akin to winning the lottery" is ridiculous. It wouldn't be fair to say that the divorce happens in the first place because the man cheated...would it. lmao. How sexist.
@Saboth: Because usually the types of guys in this situation are such flaming jerks to be around day-to-day that the woman earns the equivalent of combat pay. Satisfied?
@wgrune: My husband and I make around the same (he makes about 12,000 more per year) But I put much more effort into our home and the day to day operation of our lives. In a situation like this (especially when children are involved) I don't think it would be unreasonable for someone to seek to be "paid" for all they did
@wgrune: It's nonetheless the exception rather than the norm--as I note below, the considerable majority of divorces involve no spousal support at all, and most that do involve only short-term.
And I wonder what would have happened if the stock had doubled in value? What would he have done if his ex-wife tried to renegotiate the divorce settlement so she could get more money. Methinks he would have been singing a different tune.
@courtneywoah: It is extremely rare to find a woman paying alimony.
And even rarer still is a judge awarding custody to a Father.
The reverse sexism in this country is horrible.
Equal rights my ass.
@rbb: I would expect that a fair number of Consumerist readers own some stock even it we're not all multi-millionaires.
@Skankingmike: It's pretty rare because on average men still make less than men, even for doing the same job
@TheFuzz53: I spent my prime earning years raising our children and working part time. I handled doctor's visits, school events and volunteering, pet care, household care, car care, money management and investments, along with every other thing related to the maintenance of a family and household. That's a decision we made together -- and we felt LUCKY that it was an option we had, and neither of us is now complaining about our choices. But I missed out on career advancements and the opportunity for resume building, as well as retirement and pension benefits. Now that my kids are grown, I am employed at a pay rate far below my education level and skill set. If my husband and I ever got divorced -- which thankfully isn't likely -- I'd hope that my contributions and career sacrifices would be taken into account and that I wouldn't be left at my age with very little, while he would get the benefit of an upper-level income and his retirement options that I helped him to both earn and manage.
Number one, the government has no business codifying a "marriage contract". All contracts of this nature should be entered into as any other partnership, and everything spelled out in advance. I don't think because you decide to get married means you deserve special privledges. Number two, gay men and women are not allowed by FEDERAL law to be married anywhere in this country. I am all for equality in that NOBODy should be married, there should be partnership agreements signed and entered into all the time. Every 2 years the contract should be looked at and renewed for changing circumstances (say a baby, new house, lost job, caring for sick relatives).
This one's on him. He obviously thought he was getting the better end of the bargain at the time. I want to say he shouldn't have gambled like that, but he's a hedge fund chief. That's what they do.