All is Not What it Seems: Wealth and Divorce

You may be surprised to learn that many of your seemingly wealthy neighbours are not wealthy at all. They are simply part of a burgeoning group of North American families who live beyond their means. They may have all the outward signs of success: expensive cars, designer wardrobes, extravagant vacations, and upscale homes, but the reality is they owe money to everyone and live in a state of perpetual angst.

When they face an unexpected event, such as the loss of employment, the collapse of a business, a devastating illness, or a divorce their house of cards collapses. What I have seen in almost three decades of working with families in crisis is how often spouses are unaware of mounting debt and overspending, until it is too late. Most frequently the debt is consumer credit loans and unpaid personal and corporate income taxes, together with punishing interest payments and in respect of taxes, penalties and fines owed.

It can be a terrible shock to live in a splashy area of town in a million dollar home only to realize that your husband or wife has remortgaged the property multiple times to support a heavily leveraged lifestyle, and the boat, ATV’s and snowmobiles are owned by the bank!

A recent case in Britain is emblematic of court hearings across the country where apparently prosperous husbands and wives split up, agree to sell assets, pay debt, and share the proceeds, but the sinking economy negates all the good intentions.

A businessman in London made a fortune in the mining industry and was obliged to pay his wife $2 million dollars. He immediately paid her $1.375 million in 1999 and the balance was to be paid over time. But he never did pay her the remaining amount. After several futile court appearances, she asked the judge to order her ex-husband to pay what he owed together with interest for the past 17 years or be sent to prison. The man lived in an expensive rented apartment but insisted he was penniless, deeply in debt, and was relying on housing benefits for the poor, and the charity of his friends and his synagogue.

His ex-wife, of course, argued that her ex-spouse’s alleged circumstances were an elaborate façade meant to deprive her of her rightful entitlement and that he should pay or be sent to jail. The judge sympathized with her, particularly acknowledging that without the funds she may lose her home, but pointed out that there was no evidence that he had any hidden assets or secret funds. The Court declined to order a jail sentence finding that he had no current ability to pay her.

How can a spouse protect herself from a scenario like the one above? Clearly, it would have been best if this lady had received all she was entitled to upfront, but often that is not possible. If the remaining monies had been secured by an asset retained by the former husband that would also have assisted, but again circumstances do not always permit that and judges in British Columbia have been reluctant to encumber a spouse’s share of the property to protect the other spouse. A life insurance policy on the husband only helps if he dies, while still owing monies.

Most frequently this problem of collecting monies after the divorce arises in cases where a spouse has a long-term obligation to pay spousal support. Many spouses fail to realize that if they agree or are ordered to pay support, it will be most difficult to escape the obligation and unfortunately, there are spouses who create situations where they appear to be impecunious. Lump-sum support is one solution but again, judges are loath to order a spouse to give up their capital to pay spousal support.

The lesson to be learned is that spouses must insist on being aware of how family finances are handled during the marriage and that upon divorce a “bird in the hand may be worth two in the bush.”

Lawdiva aka Georgialee Lang

Watch What You Say Online or Be Sued

A  divorce  lawyer in Florida was awarded $350,000 in punitive damages for false statements made by a former client who was unhappy with the services she received from her lawyer.

Both the client and her ex-husband  posted comments on multiple websites which read:

“This lawyer represented me in my divorce. She was combative and explosive and took my divorce to a level of anger which caused major suffering of my minor children. She insisted I was an emotionally abused wife who couldn’t make rational decisions which caused my case to drag on in the system for a year and a half so her FEES would continue to multiply!! She misrepresented her fees with regards to the contract I initially signed. The contract she submitted to the courts for her fees were 4 times her original quote and pages of the original had been exchanged to support her claims, only the signature page was the same. Shame on me that I did not have an original copy, but like an idiot . . . I trusted my lawyer. Don’t mistake sincerity for honesty because I assure you, that in this attorney’s case, they are NOT the same thing. She absolutely perpetuates the horrible image of attorneys who are only out for the money and themselves. Although I know this isn’t the case and there are some very good honest lawyers out there, Mrs. G.  is simply not one of the “good ones. Horrible horrible experience. Use anyone else, it would have to be a better result.”

“I accepted an initial VERY fair offer from my ex. Mrs. G. convinced me to “crush” him and that I could have permanent etc. Spent over a year (and 4 times her original estimate) to arrive at the same place we started at. Caused unnecessary chaos and fear with my kids, convinced me that my ex cheated (which he didn’t), that he was hiding money (which he wasn’t), and was mad at ME when I realized her fee circus had gone on long enough and finally said “stop”.  Altered her fee structures, actually replaced original documents with others to support her charges and generally gave the kind of poor service you only hear about. I’m not a disgruntled ex-wife. I’m just the foolish person who believes that a person’s word should be backed by integrity. Not even remotely true in this case. I’ve had 2 prior attorneys and never ever have I seen ego and monies be so blatantly out of control.”

Both the client and her ex-husband appealed the damage award, however, just before the appeal was to be heard the ex-husband withdrew his appeal saying that he had settled the matter with the attorney.


His ex-wife however, did not abandon her appeal and the appellate court remarked that even if she had, they would not have dismissed the appeal, because it raised an important issue with respect to free speech protections vis a vis reviews of professional services posted on the internet. The court said the issue merited discussion as it presented a scenario that would likely occur again.

At trial, both defendants admitted they had posted the online reviews. The evidence at trial included a written retainer agreement signed by the attorney’s client which proved that the lawyer had not charged her four times more than what was quoted in the agreement, a fact both defendants later admitted.

If a statement is true it will not be defamatory, but in this case the alleged overcharging was a falsehood. It simply wasn’t true. The appeal court rejected the defendant’s suggestion that their rights of free speech protected them from voicing their “opinion” online.


The court disagreed saying:

“An action for libel will lie for a ‘false and unprivileged publication by letter, or otherwise, which exposes a person to distrust, hatred, contempt, ridicule or obloquy or which causes such person to be avoided, or which has a tendency to injure such person in [their] office, occupation,  or business….”


The lesson here is to think twice before you publicly criticize a service provider, but if you feel compelled to do so, you better be sure you can prove your comments are true.

Lawdiva aka Georgialee



Pooches Need Protection in Divorce Too


phoenixThe State of Alaska is joining several other States in introducing new legislation to protect dogs that are caught in the midst of their owners’ divorce or domestic violence incidents.

Family law lawyer and Democratic House Representative Max Gruenberg sponsored the bill with unanimous support from both sides of the aisle. Its provisions include expanding the definition of “essential personal items” to include pets and permit victims of domestic violence to retrieve their pets as they would any other personal items.

It would also require owners to pay for the cost of animals seized in cases of neglect; allow courts to include pets in domestic violence protection orders; and provide authority for custody arrangement for pets during divorce cases.

In 2007 California and Illinois passed laws to protect pets after concluding that spouses and partners in abusive situations were often reluctant to leave their abuser, fearing their pet would become their abuser’s next victim in retaliation for their departure. When victims of abuse leave their abusive situation and go to safe houses they are rarely able to take their pets with them. Thus, this law authorizes animal shelters to care for these pets during this time.

In California, even before the law was passed, courts were permitting applicants for domestic restraining orders to include family members in the order, which included pets. I have not seen such terms in protection orders in British Columbia, but I am aware of orders awarding the care of a pet to one of the parties pending a final decision in a divorce case.

As a pooch owner, I understand why separating couples fight as hard over their pets as they do the financial aspects of a case. Our pets are beloved family members and as any dog-owner will attest: our pets know when there is trouble in the home.GAL & PAL #2jpgGAL & PAL #2jpg

Lawdiva aka Georgialee Lang

The Lighter Side of Divorce

GeorgiaLeeLang032We all need a few laughs once in while, so today’s post is intended to focus on the lighter side of divorce, which, believe me, does not exist when you are in the middle of it. It is always amusing to see what Hollywood has to say about the subject, given their residents are abundant among the divorce statistics.

For those who have survived divorce and those who watch from a distance (and are grateful for that), consider the following sound bites and barbs.

1. “Ah yes divorce, the Latin word meaning to rip out a man’s genitals through his wallet.”
ROBIN WILLIAMS, divorced twice

2. “I’m an excellent housekeeper. Every time I divorce, I keep the house.”
ZSA ZSA GABOR, divorced seven times, one anulment

3. “The difference between a legal separation and a divorce is that a legal separation gives the husband a chance to hide his money.” JOHNNY CARSON, divorced three times

4. “Today Pamela and Tommy Lee announced they are getting back together. You know what that means? There’s still hope for Ike and Tina Turner.”JAY LENO, married for 30 years

5. “I’ve given my memoirs more thought than my marriages. You can’t divorce a book.”
GLORIA SWANSON, divorced four times

6. “The secret of a happy marriage remains a secret.”
HENNY YOUNGMAN, married for 60 years

The literary world also has something to say on the topic of divorce:

6. “A divorce is like an amputation, you survive it, but there’s less of you.”
MARGARET ATWOOD, divorced once

7. “The worst reconciliation is better than the best divorce.”
MIGUEL DE CERVANTES, married for 32 years

8. “When two people get a divorce, it isn’t a sign that they “don’t understand” one another,
but a sign that they have at last, begun to.”
HELEN ROWLAND, marital status unknown

As Billy Joel once said “I’d rather laugh with the sinners than cry with the saints.”

Lawdiva aka Georgialee Lang, happily married for 27 years!

Will Wife’s Shoe Collection Determine Court’s Jurisdiction?

GeorgiaLeeLang057We often hear politicians speak of our “global community” to describe the people or nations of the world being closely connected by modern telecommunications and being socially, economically, and politically interdependent.

One area where the phenomena of global connectedness is ever more apparent is  in the area of family law. Only a few decades ago cases in family court typically involved a divorcing couple who lived in the same city or town and they usually remained there after their divorce was finalized.

Now it is commonplace for family law cases to involve several jurisdictions. The scenarios are varied. It may occur where a couple own real estate outside of their country of residence, or one of them wishes to move away with the children to another country. Child abduction is on the increase world-wide as couples separate and engage in high conflict litigation, sometimes marked by one parent’s non-consensual departure from the home country.

Couples that have  domestic situations involving multiple jurisdictions now also analyze where the law is most favourable to them and seek to bring their court cases to that jurisdiction. It’s called forum-shopping.

Great Britain is seen as a very friendly jurisdiction for women in large property cases and there have been many recent cases where one party sought to persuade a British court to take authority over their case, while the other stridently resisted. In middle eastern countries where sharia law governs, women have few legal rights and even with the limited rights they have, they often find themselves waiting years to obtain justice, if it ever arrives. If another jurisdiction is available they will go there.

There is no doubt that family law has become more complex as a result of the global community that is now our world. In a recent case in New York City, Swiss businessman, Maurice Alain Amon and his wife, Tracey Hejailan, had homes in Manhattan and in Monte Carlo. Mr. Amon argued the Monte Carlo court was the proper jurisdiction to hear their case. Not surprisingly, Mr. Amon had received advice that the family law system in Monaco did not include a division of property based on the fact of marriage. In Monaco ownership of property is conclusive. In other words, if you own it, you keep it.

In support of his argument that the couple’s primary residence was in Monaco, Mr. Amon submitted evidence of the size of his wife’s shoe collection, along with her walk-in closet in Monte Carlo, suggesting that where she stored most of her extensive shoe collection and designer fashions is where they lived.

Mr. Amon was no doubt motivated to make his jurisdictional argument when he learned his wife was going after his valuable art collection on the walls of their New York home, property she would have no interest in under Monacan law.

Somehow I think it’s going to take more than Jimmy Choo’s and Manolo Blahnik’s for Mr. Amon to succeed.


Lawdiva aka Georgialee Lang




Jared Fogle, Subway Spokesman, Had Secret Life as a Pedophile

10950859361151CDPJared Fogle was a clean-cut college kid from a good family in Indiana who weighed 425 pounds and decided he needed to lose some weight. He gave up his craving for fast food and began eating exclusively at Subway. Along the way he lost 235 pounds on what he called the “Subway diet”.Subway’s head office heard about Jared’s success and presto! he became the well-paid spokesperson for Subway Restaurants. By 2013 he had filmed over 300 commercials for Subway and travelled around the country touting the health benefits of Subway’s fare.

In 2001 Jared married his first wife, a union that ended in divorce in 2007. In 2010 he remarried and fathered two children. His life, it seemed, was charmed. He was famous, affluent, and had a loving family.

But all that changed when Jared Fogle’s home was raided by FBI and Indiana State Police last month, an investigation that followed the arrest of Fogle’s colleague, Russell Taylor, who was the director of the Jared Foundation, a non-profit that was geared to programs and education for obese children. Taylor was charged with child exploitation, possession of child pornography and voyeurism. He apparently shared videotaped kiddie porn with Jared, obtained through hidden cameras in his home.

After his arrest he attempted suicide in the Marion County Jail and was placed on life support for a time. He is now back in jail.

Subway immediately suspended its relationship with Jared and with the news this week that Jared will plead guilty to charges of possessing child pornography and traveling to pay for sex with minors, Subway has now terminated his contract.  It is reported the charges involve 14 minors, both male and female, and that as part of his plea bargain he will serve a minimum of five years in prison, although he could be sentenced to as long as 12 years. He has also agreed to compensate each of the 14 victims the sum of $100,000.

His parents, a doctor and a teacher, released the following statement today:

“Our family is shocked and profoundly disappointed in Jared’s abhorrent criminal behavior and we are very concerned for the well-being of those affected by his conduct. At the same time, we are gratified that Jared is accepting responsibility for what he has done by agreeing to plea guilty to the charges filed today and by volunteering to make restitution to the victims.

We are also gratified that he is seeking medical treatment. We hope that he will become healthy again and are confident that after he serves his sentence, he will continue to make amends. We look forward to the day that he rejoins our family and society.”

Jared’s wife also filed for divorce this week and will now raise two children under the age of five without their father. Further, as a registered sex offender, when Jared is released from prison he may not have any contact with his children.

The American Psychiatric Association characterizes pedophilia as a mental disorder, while other experts working with sex offenders say it is a sexual orientation and compare it to the once held view that homosexuality was a mental illness, a position that has now been abandoned.

Jared’s lawyer advised media outlets that Jared will avail himself of psychiatric treatment and has already begun therapy.

Lawdiva aka Georgialee Lang

Big Law Partner Bears the Brunt of Madoff Fraud During Divorce

10950859361151CDPIn 2011 I wrote a story about Steve Simkin, a prominent real estate lawyer at New York mega-firm Paul, Weiss. An unwitting victim of Bernie Madoff’s ponzi scheme, Mr. Simkin signed an agreement with his wife, lawyer Laura Blank in 2006, before Madoff’s massive fraud unravelled, dividing their family assets between the two of them. Part of the deal saw Ms. Blank receive compensation for her one-half interest in Mr. Simkin’s investment portfolio valued at $5.4 million dollars and held by Bernie Madoff.

In 2008 Mr. Simkin realized he was a victim of Madoff’s criminal scheme. The truth was there was no account with Madoff’s company and the monthly statements were forgeries. Simkin filed a lawsuit against his ex-wife seeking to recover the funds he paid her for her share of the portfolio. Simkin’s lawyer argued that Ms. Blank had received a “windfall” on the basis of a “mutual mistake”. He sought a variation of the agreement and reimbursement from his ex-wife.

A Manhattan trial judge didn’t see it that way and tossed out Simkin’s lawsuit. She ruled there had been no mistake, because at the date of the separation agreement the account held funds. The fact the account was later worth nothing was not a “mutual mistake”.

Mr. Simkin immediately appealed and in a 3-2 decision in his favour, the Appeal Court ruled that Simkin’s claim was legitimate and ought to proceed in the lower court.

In a stinging dissent Justice Karla Moskowitz held that the majority decision trampled on years of well-settled law that “a deal is a deal”. She opined that when the agreement was signed the account had value and to adjust the division of assets because one asset had declined in value was “divorced from reality”.

The legal concepts set out in the dissenting opinion, mirror the laws in British Columbia with respect to a Court’s hesitancy to overrule or set aside a separation agreement negotiated by the parties in good faith and with independent legal advice.

The reason why separation agreements should not be easily varied is exemplified by the Simkin case. Another example? If a couple divorced, with the wife retaining the family home and the husband retaining other assets of equal value, it would be ridiculous for the wife to come back two years later and say, “The real estate market has dropped and my home is now only worth half the value it was at the date of the separation agreement, please pay me more money to account for this change in value.”

Of course, Ms. Blank appealed the Court of Appeal decision and in 2011 I made the following prediction:

“I believe at the end of the day, which could be years away, the pain caused by Madoff’s swindle will be suffered only by Mr. Simkin. Do I believe that is fair? Not really, but the law set out in the fourteen page dissent is compelling.”

Sure enough, with all appeals now completed, Mr. Simkin alone bears the burden of Madoff’s fraud, while Ms. Blank is permitted to retain the “overpayment” of $2.7 million.

It is likely that Steve Simkin’s plight will attract little sympathy, given the enormous salaries earned by “biglaw” partners in New York City. Website suggests a salary range of $600,000 to $900,000 per annum. Nice work if you can get it!