Within the past week, we have discussed the potential changes on the horizon for alimony laws and the assets involved in a 77-year marriage that will be entering divorce proceedings. It is undeniable that finances are one of the most difficult and contentious components of a divorce and these stories demonstrate such a sentiment.
So imagine how the 54-year-old chief executive officer of Whitebox Advisors – a hedge-fund based in Minneapolis that manages $2.5 billion in assets – must feel after a Minnesota Court of Appeals decided that he had to pay 10% interest on overdue payments that stem from a $140.7 million divorce settlement with his former wife.
The settlement was made in 2008, when the CEO’s ex-wife waived interest in his businesses in exchange for the large payout. Whitebox Advisors formerly had a 50% stake in Sun Country Airlines, and the 54-year-old also owns part of AJR Financial.
It was agreed that the CEO would pay nearly $141 million over five years in the divorce settlement. Three lump-sum payments totaling over $70 million – two being paid in February 2008, one in 2013 – and $1.5 million monthly installments were the parameters of the deal.
Sometime in 2009 the CEO fell behind on his payments, and when his ex-wife took him to court he cited a “change in his financial circumstances” and requested to reopen the case. He ended up paying her $21 million in arrears, but there were more missed payments.
A district court ruled the CEO had to pay $4.5 million for the overdue payments. In addition, he had to pay 10% annualized interest due to a Minnesota state law that applies such a rate on judgments over $50,000.
The financial ramifications of any divorce loom large over the split. Securing an experienced legal professional could ease your financial burden in divorce proceedings, alleviating undue stress during an emotional period.
Source: InsuranceNewsNet.com, “Court rules divorced Mpls. Hedge fund CEO owes 10% interest on missed payments,” John Welbes, Dec. 12, 2011