Home DIVORCE NEWSPAPER US Divorce Headlines Ruth Madoff’s $70 million claim to “separate property”

Ruth Madoff’s $70 million claim to “separate property”

I knew this was coming I just didn’t expect Ira-Genie-in-a-bottle-Sorkin to assert this claim just yet. I expected him to weigh it for a while, spin it around in his head a few months before actually growing enough…how should I say?…enough chutzpah. I didn’t think he’d grow enough chutzpah in such a short period of time to put it out there that Ruth wanted to keep her jewelry. And her apartment. And about $60 million dollars.

But I was wrong. I kept arguing that it was “marital” assets. I think she’s approaching this as if it is “separate” property. That is not going to fly, obviously, this idea of “separate” property earned during a marriage. Unless it was a gift from a third party made only to her, anything Ruth made during the marriage is marital property; and if I understand what the SEC’s beef is, they are saying that those marital property came from Bernie’s business dealings, and so they should be frozen and given back to investors….

This is the whole “pierce the corporate veil” and “fruits of the poisonous tree” arguments I alluded to here: http://www.divorcesaloon.com/stephen-walshs-walsh-greenbery-co-divorce-settlement-with-ex-wife-janet-walsh-schaberg-comes-under-attack-will-the-agreement-be-set-aside

That is why women like Ruth have to be careful when they marry men like Bernard Madoff. It’s an incredibly climb to the top. But when something like this ponzi scheme gets exposed, then an entire 50 year marriage goes up in smoke and you are left with nothing but the clothes on your back.  And in Ruth’s case, it’s not even divorce that is leaving her destitute…oh. But wait. Ruth is not destitute yet. She and her husband have been focused and silent. They are playing hard ball. They are playing to win.

To Ruth’s benefit, she is represented by what appears to be very competent legal counsel in Ira Sorkin. And he is not even a divorce attorney. But he is going to argue that those assets are off the table because they are not “corporate assets” but rather they are “personal assets.” Maybe he will say Bernie paid Ruth these assets for her work as bookkeeper for Bernard Madoff Securities. I mean, it is incredulous, but stranger things have happened in this case.

I think the way he wins this is he argues that somehow these assets were not corporate, and they are not marital. They are separate. They belong to Ruth only. The only way he wins that argument, though, is that Ruth either inherited the properties, or she received a third party gift.  She can’t claim a gift from her husband, because marital gifts between spouses are “marital property.” And in order to remain separate property, she would have to show that the “gifts” were not commingled with the marital res.

I think it is a very long shot. I don’t see winning this argument. But, again, we are dealing with Ira-Genie-In-A-Bottle Sorkin. The man is a magician. Never met him. Don’t know him. But he is, so far, a damn good lawyer.

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