Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Matrimonial StrategistKickerFeaturesSectionsNewsLJN Newsletters

Post-Divorce Cash Flow and Financial Workability

By Carl M. Palatnik

The New York case of Simkin v. Blank, N.Y.3d 46 52 (2012), infamous for its ties to Bernard Madoff, illustrates one of the common financial mistakes made in divorce. In this case, pursuant to a settlement agreement incorporated but not merged into their judgment of divorce, the parties retained respective ownership of separately titled properties, including a brokerage account in the husband's name, managed by the Madoff firm, which had an agreed-upon value of $5.4 million. To balance this exchange and effectuate what they believed to be a fair and reasonable division of marital property, the husband paid the wife $6.25 million, and transferred to her $368,000 in retirement assets to equalize their retirement holdings.

Approximately two and a half years later, the Madoff brokerage account was effectively rendered valueless when Madoff's Ponzi scheme was exposed. The husband asked the court to reform the agreement based on the doctrine of mutual mistake, but the court declined, stating: “This situation, however sympathetic, is more akin to a marital asset that unexpectedly loses value after dissolution of a marriage; the asset had value at the time of the settlement but the purported value did not remain consistent.” As the court emphasized, rescission or reformation of a property settlement is limited to “exceptional situations.” Id. at 52 (quoting Da Silva v. Musso, 53 N.Y.2d 543, 552 (1981)).

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs Image

A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.

Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Blockchain Domains: New Developments for Brand Owners Image

Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.

Coverage Issues Stemming from Dry Cleaner Contamination Suits Image

In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.