A model of this text first appeared in CNBC’s Inside Wealth e-newsletter with Robert Frank, a weekly information to the high-net-worth investor and shopper. Signal as much as obtain future editions, straight to your inbox. Final week, Dan Rottenstreich’s legislation agency acquired an uncommon case. A lady got here to the agency asking for illustration in her divorce. Like most of Rottenstreich’s purchasers, the lady and her husband have been rich. In contrast to most of his purchasers, their fortune got here from crypto. The husband had based a crypto agency, Rottenstreich mentioned, whose property have been held in offshore trusts and crypto wallets — the spouse wanted assist discovering them. “We’re going to have to return in time, discover the transfers to digital exchanges, herald crypto forensics, discover the wallets and work out what transactions went on over time,” mentioned Rottenstreich, associate in Rottenstreich Farley Bronstein Fisher Potter Hodas LLP (RFB+Fisher Potter Hodas, for brief). “We do what we all the time do. We comply with the cash.” Following the cash has turn into tougher than ever on the subject of rich divorces. As right now’s fortunes have ballooned in measurement and quantity, they’ve additionally expanded in complexity. Offshoring, holding corporations, extremely specialised trusts and unique jurisdictions round the world have made discovering marital property nearly inconceivable for all however the most refined monetary consultants. That’s the place RFB+Fisher Potter Hodas is available in. Based in 2023 from the merger of two matrimonial legislation companies — one in New York and one in Palm Seashore, Florida — it’s quickly grown into the one-stop store for right now’s most costly divorces. The agency’s staff of 40 lawyers contains former authorities prosecutors, trial lawyers, business litigators, and belief and property consultants, many from the top legislation colleges and blue-chip companies. The goal, in response to Rottenstreich and associate Jeff Fisher, is to deliver divorce legislation into the trendy wealth age. “Wealth is completely totally different now, and so are the circumstances,” Fisher mentioned. “They’re a lot larger and extra complicated. We have now some circumstances the place now we have one million paperwork.” The story behind the new legislation agency, and its clientele, mirrors the fast evolution of wealth over the previous twenty years. Fisher, certainly one of the founding companions, began as an assistant U.S. legal professional for the Southern District of Florida, prosecuting drug and financial institution fraud circumstances in Miami in the early Eighties. He later moved to Palm Seashore and began taking divorce circumstances, representing Angela Koch in her much-publicized divorce from Invoice Koch. Over time his agency, then referred to as Fisher & Bendeck, grew to 10 attorneys, lifted by the rising fortunes and divorces of the Palm Seashore elite. He dealt with the divorce of Ariane Dart from packaging king and “burger-box billionaire” Robert Dart and plenty of others he can’t title, “since we all the time promise confidentiality.” Enterprise was good, however his agency had an issue. His circumstances have been rising, however he had bother recruiting top legislation expertise to deal with the load. Matrimonial legislation carried a stigma of the Eighties and Nineteen Nineties, when lawyers have been seen as little greater than negotiators for alimony or baby help. “We had nice demand however no provide,” he mentioned. At the identical time, the demographics of wealth have been shifting. In the Nineteen Nineties and early 2000s, the wealth in Palm Seashore primarily got here from inheritances or publicly traded inventory, with founders and CEOs. After the 2008 monetary disaster, the bull market and asset growth created large fortunes in tech, non-public fairness, enterprise capital and personal startups. Wealth grew to become youthful and international — and more and more opaque. Whereas the property of the CEO of a publicly traded firm are comparatively straightforward to crack and divvy up — he retains the $20 million of GE inventory, she will get the Hamptons home and the $10 million Picasso — the new breed of worldwide tremendous wealthy made their cash from secretive hedge funds, PE companies and personal corporations, with little or no public knowledge. Fisher began interested by how he might broaden to draw extra authorized expertise and higher serve the new breed of purchasers. In 2017, he was representing Linda Macklowe in her divorce from developer Harry Macklowe, which centered on the couple’s $1 billion artwork assortment. Regardless of bitter feuds in court docket, Fisher had pleasant conversations with Harry’s lawyer, Dan Rottenstreich. Rottenstreich had represented Georgina Chapman in her divorce from Harvey Weinstein and Caryl Englander in her $1 billion divorce from hedge funder Israel Englander. Rottenstreich and Fisher knew lots of the identical folks of their careers and after the trial was over, they began speaking extra about their companies. “We got here up with this idea to merge the companies, to have an interstate presence and higher serve the purchasers,” Fisher mentioned. Rottenstreich added, “I favored the man. And it’s been seamless.” Enterprise is booming. The variety of billionaires in the world has practically doubled over the previous decade, to greater than 2,800, in response to Forbes. The variety of folks price $30 million or extra has soared to over 426,000. As Fisher says “extra wealth means extra divorces.” At the identical time, the variety of so-called grey divorces, or divorces involving older {couples} has elevated, pushed partially by the extremely publicized splits of Jeff Bezos and Invoice Gates from their spouses. “They took away the stigma of the rich and divorce,” Fisher mentioned. “Outdated wealth used to say, ‘I’ve a picture to keep up.’ With Gates and Bezos, that acquired eroded.” Fisher mentioned high-net-worth divorces in Florida have additionally surged attributable to the mass wealth migration throughout Covid from the Northeast and California. The agency not too long ago opened a new workplace in Miami. Discovering right now’s large fortunes, nevertheless, has by no means been tougher. In a single case the agency is engaged on, led by founding associate John Farley, a California software program tycoon moved to India in 2020 and filed for divorce. The entrepreneur, Indian-born Sridhar Vembu, co-founder of cloud software program agency Zoho, engaged in a collection of transactions in India that his ex-wife mentioned lowered the marital property (which Vembu denies). None of the attorneys concerned would touch upon the case, however public court docket filings recommend it includes non-public holding corporations in the U.S., Singapore and India with operations round the world. Trusts have turn into a relentless problem for divorce attorneys. An increasing number of are being created in Nevada and Wyoming, which make it practically inconceivable even for ex-spouses to gather or peer inside sure asset safety trusts. “Everybody appears to be utilizing Wyoming now,” Rottenstreich mentioned. “There isn’t any doubt trusts are getting used to defend property.” One other case the agency is engaged on includes a social influencer and web character. Whereas they will’t disclose any names, Rottenstreich mentioned the agency is having to worth the web enterprise with money movement fashions and progress charges. He mentioned the vary “might be wherever between $100 million to $1 billion.” They’re additionally making an attempt to worth the influencer’s on-line followers, since they’re typically used to generate gross sales. “Social media accounts with thousands and thousands of followers are an asset,” he mentioned. “So how do you worth them?” With the rich more and more main international lives, hopping from one nation to a different, typically with a number of citizenships and houses round the world, the agency additionally has to work with totally different jurisdictions. Fisher mentioned he was working with the American ex-wife of a French billionaire who wished to maintain custody of their daughter. He needed to navigate worldwide legislation to win a effective towards the ex-husband of $700,000 per week till the daughter was returned. In the finish, the attorneys say what issues most is teaching purchasers by means of the most tense and emotional interval of their lives. “The robust circumstances are the place we work greatest,” Rottenstreich mentioned. “As a result of they arrive to belief us. Numerous psychology goes into it.”
From left to proper: Jeffrey Fisher, Zachary Potter, John Farley, Dan Rottenstreich and Benjamin Hodas, and in entrance: Peter Bronstein, of Rottenstreich Farley Bronstein Fisher Potter Hodas LLP.
Courtesy: RFB+ Fisher Potter Hodas
A model of this text first appeared in CNBC’s Inside Wealth e-newsletter with Robert Frank, a weekly information to the high-net-worth investor and shopper. Join to obtain future editions, straight to your inbox.
Final week, Dan Rottenstreich’s legislation agency acquired an uncommon case.
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