pepper112765
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Post by pepper112765 on May 31, 2011 13:13:08 GMT -5
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8 Bit WWBG
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Post by 8 Bit WWBG on May 31, 2011 15:04:20 GMT -5
Wow... very good points made by all. I am leaning towards the agreement being final though.
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Deleted
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Post by Deleted on May 31, 2011 15:11:22 GMT -5
I saw this link elsewhere and I hope the wife wins. Sounds like X-Hubby has all his friends at the law firm working on this (although she's a lawyer as well, so better-equipped than most to fight back). The strongest argument I saw was the one about how they each took different risks, he staying with Madoff, she taking cash. Why should she reimburse him for the impact of his bad decision?
My Ex and I each came out of the divorce with about $100K. He never got a job and spent it on cheap hotels and booze. I put mine down on a house and sold the house 7 years later at a profit of $200K. Should I have given him part of that? Well, I didn't.
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thyme4change
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Post by thyme4change on May 31, 2011 15:15:54 GMT -5
Could anyone go back and say that the equity in the house at the top of the bubble was also a mirage and renegotiate? If so, just about every divorce in 2002 - 2005 would be open for renegotiation.
I agree that the settlement should be left as final. The guy could have pulled his money out of Madoff and put it elsewhere. I agree that if that account had doubled in size he wouldn't have sent her a check for a couple million out of the goodness of his heart.
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Deleted
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Post by Deleted on May 31, 2011 15:23:09 GMT -5
I also think it should be final. Tons of people have made poor decisions with money after a settlement, divorce, or insurance payouts. Can you imagine the havoc if you could go back and revise things? ![>:(](//storage.proboards.com/forum/images/smiley/angry.png)
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Deleted
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Post by Deleted on May 31, 2011 15:24:18 GMT -5
It's an interesting argument about the existence of value.
I think he's going to lose. Two years passed before the divorce settlement and Madoff going bust. If he had taken his money at the time he would have been fine. Otherwise a spouse could make the same argument about a house value. Free and clear house was worth $1M at the time of settlement-one spouse takes out a loan for $500k to buy out the other spouse. House declines in value to $500k and now spouse is effectively upside down if s/he wants to sell (would have to put in cash to pay commissions and other closing costs). Other spouse parked the money in a mm acct and rode out the crash.
You pays your money and you takes your chances...
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muttleynfelix
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Post by muttleynfelix on May 31, 2011 15:24:55 GMT -5
Yikes .. I thought you were going to have an article about how the New York Mets were forced to sell a portion off because of the money lost in the Madoff scheme, but this is nuts.
I think the Divorce agreement should stand. If not, it opens the door for so many contracts to come back before the courts.
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Deleted
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Post by Deleted on May 31, 2011 15:38:43 GMT -5
Otherwise a spouse could make the same argument about a house value. Free and clear house was worth $1M at the time of settlement-one spouse takes out a loan for $500k to buy out the other spouse. House declines in value to $500k and now spouse is effectively upside down if s/he wants to sell (would have to put in cash to pay commissions and other closing costs) My friend was looking at a house recently that has been on the market several years. The woman doesn't want to go down further in price because it was her divorce settlement. ![:(](//storage.proboards.com/forum/images/smiley/sad.png) It was worth 1.5 million at the time of the divorce and is now on the market for 900k.
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thyme4change
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Post by thyme4change on May 31, 2011 16:00:10 GMT -5
If this house is in central phoenix, I'm friends with that lady.
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8 Bit WWBG
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Post by 8 Bit WWBG on May 31, 2011 16:04:59 GMT -5
...:::"Could anyone go back and say that the equity in the house at the top of the bubble was also a mirage and renegotiate? If so, just about every divorce in 2002 - 2005 would be open for renegotiation.":::...
Just the fact that it has gotten so far means it is not as cut and dried as we wish it were. But for this reason and many more, I hope that the divorce is upheld. A small part of me wonders if the wife will try to settle just to avoid the headache. He seems dead set on pursuing this, so if she is going to spend money defending herself, it might be worthwhile.
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mithrin
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Post by mithrin on May 31, 2011 16:17:58 GMT -5
I'm not sure where I'd rather see the court case come down, but I don't think that Madoff accounts are equivalent to real estate, so the courts finding in favor of the husband wouldn't open the floodgates (except to other Madoff victims).
When you split the value of the house, you get an appraisal for the market value. That is what the house is worth at the time, and real estate can go up or down later, which is a risk that the spouse keeping the property bears. The same would apply if the couple had investments with a reputable broker. After the split, the spouse that left money in the market might lose money in the market crash. If so, they have no claim to ask their ex to pay for their investment loss.
Madoff is different. The couple THOUGHT that they owned a combination of stocks, bonds and funds that was worth a given amount. In actuality, Madoff never did buy those stocks and bonds that he claimed, and was just making up the balance sheets. Sure, theoretically, they could have withdrawn the whole amount from Madoff (though a large enough withdrawal would have collapsed the Ponzi scheme). But in order to withdraw the full "value" of their account, Madoff would have had to steal money from other people's deposits, so it's quite a bit different than selling off stocks that you actually own.
I can see where the courts might decide that the original divorce decree incorrectly valued the Madoff portion of the assets because they were using the fictional values provided by Madoff. They might decide to go back and change those value of those accounts to equal the contributions only, or just the amount withdrawn over the lifetime of their account + the eventual settlement value.
Consider a hypothetical case where a couple has '10 million' in Madoff money, of which only 2 million is actual contributions and 8 million is 'Madoff money'. They divorce and one spouse gets 5 mill in cash and the other keeps the account. Then the Ponzi collapses and the trustee examines their account. He sees 2 million in deposits and 5 million in withdrawals. So he goes to the spouse who kept the account and demands 3 million back to add to the victims fund, because the account took out more than it contributed. Now the Madoff spouse is being told his account was never worth more than 2 million, and because they took out more than that, not only will they get nothing from the settlement, but they owe the trustee 3 million. Meanwhile, the other spouse has the 5 million in cash (3 million of which is actually money that Madoff stole from others). At the very least it seems fair that the trustee would be able to trace the money, and go after the spouse with the cash to recover the 3 million extra (leaving the Madoff spouse with $0 and the other with $2 million). It's a huge mess. Take it to the extreme, assume that at the divorce, all the Madoff money was pulled out and split evenly. They each get $5 million in cash. Fast forward to the trustee asking for the 8 million in fake profits back from one spouse, but not they other because only one had their name on the account. I'd say it's more fair to take 4 million back from each. (Plus demanding everything from one spouse could easily lead to less money recovered for the settlement account, since they never had enough to pay the whole amount back--leaving one spouse enjoying millions worth of stolen money, at the expense of all the other victims).
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Deleted
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Post by Deleted on May 31, 2011 16:19:38 GMT -5
If this house is in central phoenix, I'm friends with that lady. Different state altogether - sounds like it's pretty rampant though!
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Deleted
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Post by Deleted on May 31, 2011 16:27:35 GMT -5
But I think the arguement is parallel. If a couple bought a house in 1980 for $100,000 cash and in 2006 the value is $350k the value that's split is not the $100k original investment but $350k. If the the value declines to $150k in 2008 the spouse who owns the house doesn't get to revisit the agreement.
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brdsl
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Post by brdsl on May 31, 2011 16:39:58 GMT -5
I believe it should be final. The only thing I have a hang up with is the following.
"To divvy up things, Mr. Simkin withdrew some money from his Madoff account and put it toward a $6.6 million cash payment to Ms. Blank. "
Some of the money she received was from the gains of this illegal scheme. If they go after him for the ill gotten gains, and the money he withdrew....they should go after her also....for the amount withdrawn to pay her portion of it.
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mithrin
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Post by mithrin on May 31, 2011 17:09:19 GMT -5
But I think the arguement is parallel. If a couple bought a house in 1980 for $100,000 cash and in 2006 the value is $350k the value that's split is not the $100k original investment but $350k. If the the value declines to $150k in 2008 the spouse who owns the house doesn't get to revisit the agreement. It's not parallel. With the house, the couple actually owns it. With regular investment accounts, the couple owns the underlying stocks. With a Ponzi scheme, the couple thinks they own stocks, but don't. A parallel with real estate would be if they couple 'bought' the house for 100K, but didn't realize their real estate agent simply pocketed the money and never transferred the deed. They divorce and one spouse buys out the other, only to find out 2 years later when the actual owner dies and the heirs show up that the house was never theirs in the first place. In this case, I'd lean toward redoing the divorce agreement as well. The one spouse was 'bought out' of an asset that the couple never owned.
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Deleted
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Post by Deleted on May 31, 2011 17:15:37 GMT -5
"Some of the money she received was from the gains of this illegal scheme. If they go after him for the ill gotten gains, and the money he withdrew....they should go after her also....for the amount withdrawn to pay her portion of it."
I do remember some precedence for tracking down money this way. But my quick Googling of the first three pages is only about this case.
I do agree with the earlier post that the husband is probably trying to squeeze some kind of settlement from the Ex. Yuck, I hate mean divorces.
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Deleted
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Post by Deleted on May 31, 2011 17:31:58 GMT -5
Some of the money she received was from the gains of this illegal scheme. If they go after him for the ill gotten gains, and the money he withdrew....they should go after her also....for the amount withdrawn to pay her portion of it. I agree if there's an offical court-ordered "claw-back". I don't think one was mentioned in the article, though.
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Deleted
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Post by Deleted on May 31, 2011 17:44:51 GMT -5
I think that the ex should not receive anything because he had the opportunity to cash out like his wife and did not. As I understand it the trustee in the Madoff case is aggressively going after people using the "claw back." I think it would be fair for the trustee to go after the wife in a separate action.
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Deleted
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Post by Deleted on May 31, 2011 18:07:44 GMT -5
Anne,
I guess it would depend on how the accounts were titled. If he kept most of the Madoff account but based the settlement on the total value which he later withdrew for the house I think the "claw back" action would be against him and then he would have to turn around and sue her for "her share". Maybe this is a round about way of doing that. But again it's not mentioned in the article.
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Deleted
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Post by Deleted on May 31, 2011 18:14:41 GMT -5
bonnap - you are probably right. It's amazing how many people actually made money off Madoff. I have to believe a good chunk of them knew it was too good to be true but were happy to take their gains. ![:(](//storage.proboards.com/forum/images/smiley/sad.png)
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Deleted
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Post by Deleted on May 31, 2011 18:35:47 GMT -5
I have to believe a good chunk of them knew it was too good to be true but were happy to take their gains. ![:(](//storage.proboards.com/forum/images/smiley/sad.png) I agree. One sob story I saw was a retired stockbroker who lost a substantial amount of her savings through Madoff. C'mon, Honey, you know the iron-clad rules. Low risk, low volatility, low return. High risk, high volatility, high average return. Anything that breaks those rules is fishy. I suspect she knew someone somewhere was getting the short end of the deal and as long as it was someone else, she didn't care.
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zibazinski
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Post by zibazinski on Jun 1, 2011 7:02:18 GMT -5
The only way you can go back is if you find out there was fraud. I technically could go back because EX hid assets and other things way before the divorce. So it wasn't part of the property settlement. Not worth it. I'm happy and he is not. THAT is worth it.
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973beachbum
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Post by 973beachbum on Jun 1, 2011 8:20:46 GMT -5
Some of the money she received was from the gains of this illegal scheme. If they go after him for the ill gotten gains, and the money he withdrew....they should go after her also....for the amount withdrawn to pay her portion of it. I agree if there's an offical court-ordered "claw-back". I don't think one was mentioned in the article, though. The trustee has been suing people for about a year. Here is a link to an article about the claw backs. They clearly are going after any accidental winners in this. I would think that this would be like when someone dies and they probate thinking there is no will or using one that someone found only years later to find out there was a will or a newer one that should have been used. I know one case where a person died they found the will from that person's spouse who had died earlier and then had to reprobate that estate first then the new decedent. What a mess! money.cnn.com/2010/12/07/news/companies/madoff_trustee_victims/index.htm
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