Global Biz
NY Madoff investor gets new shot at ex's cash
(Agencies)
Updated: 2011-01-05 10:45
 |
Large Medium Small |
NEW YORK- A prominent lawyer can have another go at getting back money he paid in a divorce settlement before losing millions of dollars he'd invested with jailed financier Bernard Madoff, an appeals court ruled Tuesday.
| ||||
Simkin, a real estate lawyer who has worked on multibillion-dollar deals, and Blank, a university administrator, divorced in 2006 after a 33-year marriage. Their divorce deal included $6.6 million in payments from Simkin to Blank, among other terms that divided their homes in Manhattan and Scarsdale, New York, cars and other items.
Simkin says about $2.7 million of the payments represented Blank's half of the couple's biggest asset: a Madoff account that turned out to be worthless when the money manager's massive pyramid scheme collapsed with his arrest in 2008. Madoff is serving a 150-year prison sentence after pleading guilty in 2009 to fraud charges, admitting cheating thousands of clients over two decades.
Simkin had kept the couple's Madoff account after the split. He wants the settlement adjusted to reflect that he ended up with an investment account that was "a sham and fiction," while his ex-wife got a "windfall," according to his lawsuit, filed in February 2009. The lawsuit doesn't specify how much money Simkin thinks he should get.
A majority of the five-judge appeals-court panel sided with him, saying Simkin had gotten a nonexistent asset in the deal.
"Steven never had an account," the majority wrote, because "on Madoff's own admission, there were no accounts within which trades were made."
But Blank's lawyer?- and two dissenting appellate judges- says the Madoff account had value when Simkin negotiated to keep it, and any losses after that don't count. He took on the risk of investment losses when he kept the account and "received exactly what he bargained for," Justice Karla Moskowitz wrote in a dissent joined by Presiding Justice Luis A. Gonzalez.
"The conclusion the majority reaches ... is truly 'divorced' from reality," Moskowitz wrote.
Blank's lawyer, Richard D. Emery, called the court majority's ruling "clear error" and said he planned to appeal.
"The point here is that: When is a deal a deal? This clearly is a divorce deal which was a deal in 2006, not to be reopened later on," he said.
Simkin and his lawyer didn't immediately respond to telephone messages left at their offices.