Posted on 01/26/2009 11:45:17 AM PST by BGHater
Richard Fuld, the disgraced former chief executive of Lehman Brothers, sold his $13.3 million (£9.6 million) Florida mansion to his wife in November for $100, according to real estate records.
Mr Fuld, who is widely blamed for the collapse of Lehman Brothers in September last year, bought the house with his wife, Kathleen, in March 2004 for $13.75 million.
On November 10, the 62-year-old banker transferred the seaside mansion into Mrs Fuld's name in return for $100.
Mr Fuld is expected to face civil lawsuits from shareholders furious that he allowed Lehman to fall into bankruptcy rather than be sold months earlier.
Lawyers speculated today that moving the house into Mrs Fuld's name only - it had previously been held in the couple's names - could be an attempt to put assets beyond the reach of Lehman Brothers investors who intend to sue the former chief executive.
Florida has unusually generous home protection laws that could save the Fulds from losing their home in the case of a lawsuit or bankruptcy. But the couple would have to provide evidence that they resided in Florida, which would be difficult, lawyers said, because of the amount of time they spend in New York.
Also, if a court decided that Mrs Fuld did not pay enough for the mansion, the transfer be deemed to be "fraudulent conveyance" that would render the move void.
The Fulds also own a multimillion-dollar property in the hedge-fund belt of Greenwich, Connecticut, and are enthusiastic art collectors.
The collapse of Lehman Brothers was the largest corporate bankruptcy in American history.
Mr Fuld was paid $22 million in 2007 but did not receive any bonus or severance payment when he left Lehman last year.
The former chief executive was questioned by a congressional committee in October.
(Excerpt) Read more at business.timesonline.co.uk ...
What the heck does a person do with home the size of those things?
If she had divorced him, she could have gotten the house for nothing...
The IRS has nothing to do with this...the IRC code allows unlimited transfers of assets between spouses..if he is sued, and he files bankruptcy..then the creditors can petition the court to reverse the transaction..
“Also, if a court decided that Mrs Fuld did not pay enough for the mansion, the transfer be deemed to be “fraudulent conveyance” that would render the move void.”
Obviously the guy sold it to his wife to protect it. The only thing I don’t like: since when does a court have the right to determine if someone didn’t pay the ‘right’ amount for something? If he wanted to sell the house for a dollar, can’t that be done in a free market?
“If he wanted to sell the house for a dollar, can’t that be done in a free market?”
Not if the home is a potential target because of bankruptcy or trying to avoid taxes in some way.
He sold it in a private transaction, not the "free market". That brings his motivation into play.
Is the $13.3 million, less the $100, subject to income tax for his wife?
assume that he sold the house on the open market..and entered into a contract to sell it for market price, say$10 mill....the creditors would petition the court to have the proceeds held in escrow..as it is obviously a lot easier to make the cash dissappear..
see my #23..
incompetent legal reporting.
it is easy enough to see if the property is declared homestead property.
Florida Statutes Section 222 controls homestead creditor exemptions. (FL uses their state rather than their federal exemptions)
If they have had their property for two years then it is wishful thinking on the part of the creditors.
Also, there is a ONE YEAR insider preference transfer period. It is only protected after ONE year after the transfer date.
Again, sloppy incomplete and incompetent reporting.
obviously the reporter does not understand fl ch 222
This guys so smart, why wasn’t the house in a Trust to begin with?
Sure, he was stuck, and it doesn’t sound like his wife is a legitimate Florida resident anyway, so he loses. Should have sold it for $10 million, and taken a long vacation with his money like Marc Rich. I’m sure there’s some pleasant place in Central America that would shelter him.
as of right now, he has no judgment against him.
only speculation he will lose his suit.
There is a one year insider preference period, a four year statute of frauds period.
There ARE some interesting decisions in the southern district of FL which adress this. The reporter is incompetent for not doing this simple research.
The fact is creditors could not touch the house even if they DID get the judgments. It is an exempt asset.
They could not touch it before, they can’t touch it now.
it depends on which homestead exemption we are discussing. Taxation exemption vs collections exemption.
The reporter, and posters here, are confusing the two.
it is really easy, look up the house in the fl public access homestead database. It should say right there if it is homestead exempt. It should also say when they bought the property.
Joint tenents by the entireties.
how do you split the wife’s share without 1. taking her share and 2. not violating her homestead protections.
he is on good ground on this one.
He’s trying to protect his half of the asset, and the court will blow right through it.. the thing shoudl have been in a trust from day one. This was just stupid.
Wife can keep the house, but no court is going to recognize her buying 1/2 of a 13 Million buck house for $100 and let the guy being sued get away with it.
I meant you in the generic way, not you as in you personally.
Take the bailout. Minimize the tax liability. Stick it to The Man.
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