Besides ruining the Mets and their fans' retirement funds, Bernie Madoff may cause divorces to go on forever. In a lawsuit that has reached the New York Court of Appeals, a man is seeking to revise the terms of his divorce because he lost a considerable amount of money after Madoff's pyramid scheme collapsed.
According to DealBook, Steven Simkin is alleging that he is allowed to renege on the couple's 50/50 divorce settlement because the money invested in Madoff as part of the split technically did not exist, "there was in fact no account and no securities or assets," Mr. Simkin's lawyer says. An attorney for his ex-wife, Laura Blank, cries foul: "to argue that he didn't have a Madoff account is nothing more than a semantic trick." A semantic trick? From a lawyer? This must be serious!
The couple divorced in 2006 and split their net worth of $13.2 million evenly, and Mr. Simkin continued to invest in Madoff funds long after it was finalized. A partner (and chair of the real estate division) at the powerhouse law firm Paul Weiss, Mr. Simkin makes $3 million a year, bought a house in Mamaroneck for $4.1 million, and is being represented free of charge (what's Latin for "opposite of pro bono?") by his colleagues. Nevertheless, his attorneys allege that he is "'gravely damaged' and suffering 'extreme hardship.'" How does his ex feel? She pointed out in 2009, "What he's doing is outrageous. He made a poor investment choice and it's his problem."
If Simkin succeeds, the implications on contracts could be dire, as one attorney says "this decision could open the floodgates for people who want to challenge agreements after they go sour…how can be certain that deals will hold up?" We're not as shocked, because we always felt that the Rich People Cannot Face Consequences Act of 1822 protected them from reality anyway.
