Divorce Lawyers Misunderstand Effects of Minority Shareholdings

GeorgiaLeeLang025The division of business assets between spouses in a divorce can be complicated and tricky. Elizabeth Berardi of New York found this out the hard way. She retained seventy-member law firm, Philps Nizer , in 2000 to draft a marriage agreement for  her, a document that would take effect if her marriage to Eugene Berardi failed to survive.

The negotiations led to an agreement that would give her 49% of her husband’s  interests in  several bus companies, while Mr. Berardi would retain 51%. It seemed like a very good deal.

Five years later the Berardis’ marriage collapsed and divorce proceedings were commenced. Mr. Berardi’s first tactic was to  challenge the marriage agreement, attempting to set it aside. Ms. Berardi reengaged Philips Nizer, who put 23 attorneys and 16 other professionals to work on her case,  appointing lawyer Helen Davis Chaitman as lead counsel.  After a trial in 2006, the court handed down their Reasons in 2009 upholding the agreement. Philips Nizer had achieved success for Ms. Berardi , despite Ms. Chaitman’s inexperience in family law, and after charging  legal fees of $1.4 million.

But all was not what it seemed. When Ms. Berardi attempted to liquidate her share of the bus companies, she found she had little power as a minority shareholder, particularly in the face of shareholder’s agreements  executed before 2000 that limited her ability to freely sell her interests. Her minority position also diminished the value of her shares in the company.

Ms. Berardi sued Philips Nizer for malpractice and professional negligence, asserting they either knew or should have known, and told her of the effects of her minority interest and the shareholders’ agreements. In particular, when her husband sought to overturn the agreement, they should not have opposed his application. Had the agreement been set aside, by consent of the parties, she could have negotiated a bargain that would see her receive liquid assets.

She also argued that Philips Nizer were in a conflict of interest by agreeing to act for her while seeking to uphold the agreement they had drafted. In a separate claim Ms. Berardi alleged she was grossly overcharged by Philips Nizer, as her ex-husband paid his lawyers only $395,000 in legal fees.

Naturally Philips Nizer sought to have Ms. Berardi’s lawsuits dismissed, suggesting she was simply attempting to escape payment of the funds she still owed the law firm, an amount over $700,000. However, this week Justice Nancy Bannon disagreed with Philips Nizer, refusing to dismiss the court action, paving the way for the litigation to continue.

Ms. Berardi’s new lawyers, Pollock & Maguire, believe that Philips Nizer pursued and obtained minority shareholder status for Ms. Berardi, never realizing the ramifications of their successful defence, until it was too late. Lead counsel, Helen Davis Chaitman is no longer with the firm and is not a defendant in the lawsuit.

Lawdiva aka Georgialee Lang





To Sign or Not to Sign: The Prenup Dilemma

DSC01152_2 (2)_2Pre-nuptial agreements are so commonplace today that no one gives them a second thought.  They are considered de rigueur in second marriages, particularly where there are children from a first marriage, who panic at the first sign that good ol’ dad has a girlfriend. They are also regularly used when a 50-year old wealthy bachelor moves his 25-year old girlfriend into his home. Ah…young love…

Their purpose is to protect a spouse’s assets from attack by their new partner if the relationship breaks down, and often they provide that upon separation, the wealthy spouse will not pay spousal support to the other.

But do they offer the protection the monied spouse is seeking, and what happens if your partner refuses to sign one?

Prenups are, of course, simply contracts, but unlike commercial contracts, courts look at prenups differently. When a couple begin living together or get married, there should be no expectation that each of them automatically has an interest in the other’s property or can expect to be supported by their new partner.

However, there comes a time when a couples’ lives are so intertwined that the law recognizes and provides for the sharing of property and in many cases, spousal support. Some of the factors include the birth of children, the sharing of childcare, the pooling of financial resources, the length of the relationship, and the many  non-financial contributions  each makes based on their abilities and skills.

In the usual prenup scenarios, if dad’s second marriage lasts as long or longer than his first, the prenup signed at the outset may be difficult to enforce. Our bachelor with the young girlfriend may find that after she has two children and is no longer participating in the job force, the contract they signed is simply unfair to her.

Often clients will make an appointment to discuss their desire for a prenup, but frequently it is a subject they have not yet raised with their partner. While prenups are not terribly expensive, to instruct a lawyer to draft one is rather foolish unless one has broached the issue with one’s sweetheart.

Case in point: New York executive,  Yiri Sun, is a Princeton graduate and vice-president of a large insurance company. She was very excited about her wedding day. She had booked a beautiful venue, the catering was top-notch, her bridal gown was exquisite, and the invitations sent.

At the last minute she was forced to call off the wedding as she refused to sign the prenup that was presented to her. Instead of losing her $8,000  reception deposit, she decided to turn her wedding into a party for 60 needy children and their families, referred to her by  the Salvation Army. She hosted the event wearing her wedding gown.

Ms. Sun’s professional status clearly gave her the confidence to call off the wedding when she saw the terms of the contract. Most women presented with prenups simply sign them. The good news for them is that if their relationship is not short, and they have made life choices that prejudice their financial well-being, they may be able to convince a judge to overrule the prenup.

As I tell my clients, prenups are a short-term solution, that in the long-run may not meet their expectations.

Lawdiva aka Georgialee Lang

Missouri Politicians Vote in Favour of Equal Parenting

GeorgiaLeeLang025The State of Missouri can truly boast of their “enlightened” political representation as state legislators took a bold step this week and passed legislation to engrain the concept of shared parenting into their family laws. The next step is for Governor Jay Nixon to sign the bill into law.

You may ask: Is this another one of those “watered-down” efforts we have seen before, where the change does not remedy the age-old “dad can’t be an equal participant in parenting” philosophy?  Not at all.

The changes contemplated in the new law are exciting for Missouri fathers who have for too long been marginalized by antiquated twentieth century traditions of stay-at-home moms and working dads, operating to advance a maternal preference for parenting after separation. The old way of parenting was shored up by untested psychological theories about mothers and fathers that unwittingly led to a template of a “visiting” parent, usually relegated to every second weekend for a total of four nights of access per month.

The primary caregiver model became the default position without consideration of the quality of parenting, the psychological functioning of each parent, or the history and nature of the parent/child relationship.

Good parents were lumped together with dysfunctional parents because judges relied on precedent, a straightjacket that we now know has hurt generations of children and needlessly disempowered parents, usually fathers.

The proposed Missouri law challenges those outdated assumptions by injecting language that directly addresses the inequality that has reigned for decades in North America.

For example, the definition of joint custody will read:

” Joint physical custody means an order awarding each of the parents approximate and reasonably equal periods of time during which a child resides with or is under the care and supervision of each of the parents. Joint physical custody shall be shared by the parents in such a way as to assure the child of substantial, frequent, continuing, and meaningful contact with both parents;”

The bill also includes the following passage:

” In determining the allocation of periods of physical custody, the court shall presume that a parenting plan that equalizes to the highest degree the amount of time the child may spend with each parent is in the best interest of the child. The state courts administrator shall modify the Form 68-A Parenting Plan, also known as “Schedule J”, to reflect the provisions of this subdivision and to include that the default parenting plan shall include alternating weeks with each parent, unless the parents submit an alternative parenting plan.”

It is encouraging to see politicians embrace the most up-to-date research which overwhelmingly supports parents as equal partners in parenting after separation. Hopefully, other jurisdictions will wake up and recognize that conflict during divorce should not be used to eliminate what hundreds of social scientists say is the best outcome for children. Shared parenting. It’s good for kids and parents.

Lawdiva aka Georgialee Lang

Victims of Family Justice System Mount Legal Challenge on Parents’ Day

BarristerAn American group who call themselves “Constitutional Association of Parental Rights Activists” (CAPRA) intend to take steps this summer to publicize and take action regarding the plight of parents who have been denied a full parental role in their children’s upbringing. The basic principles underlying their campaign stem from the United States Federal Code (36 US Code 135) that provides for Parents’ Day. The law reads:

“(a) The fourth Sunday in July is Parents’ Day.
 (b) All private citizens, organizations, and Federal, State, and local governmental and legislative entities are encouraged to recognize Parents’ Day through proclamations, activities, and educational efforts in furtherance of recognizing, uplifting, and supporting the role of parents in bringing up their children.”
Planning is well underway to launch a class action lawsuit against all 50 states of the union on Parents’ Day 2016.  Their strategy is to leverage this official federal holiday as a starting point and take advantage of both the Republican and Democratic Presidential Conventions to bring pressure on both political parties to recognize the importance of both parents in raising children. The GOP convention is one week before Parents’ Day, while the Democrats will meet a week after the holiday.
Their primary goal is to shutdown and radically reform America’s family court system


Commencing July 4th, 2016, some 50,000 CAPRA Members will begin exploiting a variety of media forums to spread the word.  They reason that based on the language of the Parents’ Day law every candidate must support the official Parents Day law, and therefore, must support their class action suit. For more information go to parentalrightsclassaction.com.

Lawdiva aka Georgialee Lang


BC Judge Allows 11-Year Old Girl to Continue Treatment to Transition to a Boy

GeorgiaLeeLang025A British Columbia  Supreme Court judge has appointed a lawyer for an 11-year old Prince George girl who is undergoing hormonal treatment to transition to a boy, a process encouraged by the girl’s mother, but opposed by her father. The child’s parents are separated.

Children diagnosed with gender dysphoria are no longer staying in the shadows, as we read about child gender transitions around the world, including the United Kingdom and Australia. Below is an article I wrote in January 2011 entitled “Children Born in the Wrong Body”.

A Family Court Judge in Australia has approved sexual reassignment surgery for a 16 year-old schoolboy who suffers from a mild form of autism. Justice Linda Dessau heard evidence of the boy’s desperation to escape his gender prison and start his life over as a girl. The Court listened to testimony of significant distress, anxiety and depression, including at least one suicide attempt.

The boy’s family, six specialists and his independent lawyer all confirmed the boy’s maturity to make this life-changing decision. The Court also heard that the boy’s father enjoyed dressing in female attire while he was a young man, but had abandoned this practice as he matured.

The protocol for sexual reassignment treatment of children is to give them hormonal drugs which arrests their journey into puberty, thus delaying the development of breasts in girls and the growth of hair and a deeper voice in boys.

Experts believe this initial treatment gives a child the opportunity to decide if they wish to move forward with further hormonal treatment and later surgery. In this case the Court also ordered that the boy’s sperm be collected and stored in the event the female hormones impeded his ability to have children.

Sex change surgery is highly controversial, particularly for children, but it is not without precedent. Six years ago an Australian Court’s decision to permit a 12 year-old girl to begin hormonal treatment was met by public anger. At the age of 17 the Court also approved a double mastectomy as the girl moved through her reassignment treatment.

While it is reported that most people who complete the surgery are happy with their new lives, for others the surgery is anything but positive. The director of Australia’s only sex change clinic has been under fire for several years as a result of former patients suing her, the Clinic, and the Clinic’s other doctors, alleging negligence and errors in diagnosis.

After allegations were made in 2009, psychiatrist Dr. Trudy Kennedy of the Monash Gender Dysphoria Clinic in Melbourne, was forced to close the clinic for a time. It is reported that eight former patients have complaints against Dr. Kennedy and three lawsuits have been commenced.

One former patient who had surgery when he was 21, maintains that he was misdiagnosed as a transexual by Dr. Kennedy. He underwent surgery to reverse the original procedure and says he now lives as a “mutilated freak”. He received a damage award.

Another 66 year-old man settled out-of-court. He had been sexually abused by his mother for seven years and received the sex change surgery in Dr. Kennedy’s Clinic, despite an opinion from a psychiatrist that the surgery would not help him.

Dr. Kennedy believes that the desire to change gender is biologically based and thus, surgery is the only cure. Other experts say that child abuse and psychiatric ailments may cause gender confusion, which should be treated with psychotherapy, not surgery.

Transexualism is generally misunderstood and public education is lacking. Vancouver human rights lawyer barbara findlay Q.C. remarks:

“Transgendered people-both transexuals who are born in
the wrong body and other people who identify as neither,
or both, male and/or female, continue to suffer
horrendous discrimination.”

Lawdiva aka Georgialee Lang

$500,000 Custody Case Garners Harsh Criticism


Another day…another courtroom, but the same insanity…. a custody battle that has cost two parents $500,000 in legal fees. This time it’s an exasperated Ontario Superior Court judge from Hamilton who asks the question, “How does this keep happening? What will it take to convince angry parents that nasty and aggressive litigation never turns out well?”

Mr. Justice Alex Pazaratz presided over a 36-day trial, awarding sole custody of an 8-year-old child to her father, a Toronto police officer. The Court’s Reasons for Judgment begin with the recitation of an email sent by the husband to his wife, a year after their separation, and before litigation commenced:

“We are both reasonable people and I really think we can work this out without spending $40,000 to $50,000 a piece in lawyer fees only to have a judge tell us something we could arrange ourselves. Please I’m begging you to be reasonable.”

It only takes one parent to turn a family law case into a hellish nightmare, and according to Judge Pazaratz that’s what an angry, foolish woman did. Consider the optics: Father wants generous parenting time, and mother refuses, turning the child against her father. In these situations, fathers will get nowhere unless they ask a court to intervene. At this point, most right-thinking parents would instruct their lawyers to negotiate a parenting plan, or attend mediation, with the goal of maximizing each parent’s time with the children, focusing always on the child’s best interests.  Sound so simple, doesn’t it?

In this case, dad spent $300,000, while mom spent $200,000. Judge Pazaratz said:

“Pause for a moment to consider the overwhelming tragedy of this case,…These are nice, average people. Of modest means (now considerably more modest). They drive old cars and probably pinch pennies shopping at Costco.”

The harshest criticism was leveled at the child’s mother, who the Court found had manipulated and falsified evidence, engaged in provocative and dangerous behaviour, and poisoned the child against her father. Judge Pazaratz described her conduct as “emotional child abuse… with their only child caught in the cross-fire”. Her deviant behaviour was triggered when her estranged husband began to move on with his life and began a new relationship.

The Court ordered the mother to pay costs to the father in the amount of $192,000, wryly concluding:

“In retrospect, (the father’s) sombre warning about ‘spending $40 – $50,000 a piece in lawyer fees’ now amounts to wishful thinking.”

Lawdiva aka Georgialee Lang





















Bill O’Reilly Loses Custody Appeal

GeorgiaLeeLang025The founder of the “No Spin Zone” may think that New York judges are “pinheads”, and that’s because they ruled against him this week in his bid to have his teenage children live with him, rather than his ex-wife.

Last year the Nassau County Supreme Court awarded his ex, Maureen McPhilmy, age 49, full residential custody of 13-year-old Spencer and 17-year-old Madeleine, although O’Reilly, age 66, has full visiting rights and shares legal custody.

As is typical in custody cases involving teenagers, both teens expressed their views, which given their ages, were highly persuasive to the judges hearing the case. The children wanted to remain living with their mother.

The Appellate court, however, spoke in favour of continued joint legal custody saying:

“…the record supports the court’s finding that if either parent were awarded sole decision-making authority, there would be a danger that it would be used to exclude the other parent from meaningful participation in the children’s lives.”

An unfortunate finding that suggests this custody battle has been high-conflict and that the once-married O’Reilly’s can no longer say anything positive about the other. It has also been reported that O’Reilly’s daughter advised a child custody assessor that she had witnessed domestic violence in the home, a charge that O’Reilly has adamantly denied.

What is not so unusual about this case is that the name O’Reilly does not appear in the court registry or in court documents, undoubtedly to protect the children.

The case is listed as Anonymous 2011-1 v Anonymous 2011-2 which indicates their fight has raged on for 5 years.

Lawdiva aka Georgialee Lang