When Libbie and David Mugrabi were married in 2005, they had orchids hanging from the ceiling and 500-600 guests. David Mugrabi was the son of Mary and Jose Mugrabi, owners of a powerhouse art business, estimated to own over 100 Andy Warhol paintings. Libbie was 22 years old and David was 30 and already heavily involved in the family business. Today the business is worth $5 billion. There was no prenuptial agreement.
Without such an agreement, the valuation of their art holdings as well as Mr. Mugrabi's interest in the family business are the subject of ongoing court hearings. Mrs. Mugrabi has offered evidence that her husband had a moving truck arrive at their Hamptons home and remove $200 million in art in order to hide assets. He is currently paying $200,000 per month in child support and spousal maintenance. The biggest obstacle in the case is establishing the value of the privately held art business as well as where all the assets are. The paintings were in the family homes because there is no business location. Sales occurred through parties hosted at the homes, parties that Mrs. Mugrabi planned and executed, and those efforts are at the heart of her claim to building the business. The messy divorce, with allegations of infidelity, have been daily fodder for the New York Post. Ben Widdecombe, "A Messy Split, For All to See," New York Times, January 13, 2019, p. SS1.
When Jeff and Mackenzie Bezos married in 1993, with no real assets, and the creation of Amazon would not come about until they moved to Seattle in 1994. Reports indicate that there was no prenuptial agreement. The couple did not achieve millionaire status until 1997, when Amazon took after with Jeff as the president and Mackenzie working as an accountant. Today, their worth is $137 billion. They own 400,000 acres of land and the Washington Post. They have filed in the state of Washington where community property laws apply. Since Amazon was founded after their marriage and without a prenuptial agreement, the split of property would be 50/50.
The couple issued a statement on Twitter about their decision to "divorce and continue our shared life as friends." The statement was perhaps made to reassure investors about the status of Amazon. Under community property laws, Ms. Bezos would be entitled to half the value of the company and could become a powerful shareholder. Also, how she is paid for her interest in the company could affect its value. She might receive am annuity or she could be awarded shares in the company. Without the specifics of a prenup, the payment will be negotiated. Their pledge to remain "cherished friends" has been taken as a signal that they may have already agreed on the property disposition as well as custody issues. Elizabeth Bernstein, "The Art of the Divorce Announcement," Wall Street Journal, January 12-13, 201...
Prenuptial agreements, which gained popularity in the 1980s provide for distribution of marital assets in the event of a marriage dissolution (divorce). The agreements are valid as long as they are voluntary and each spouse has the opportunity to review the agreement and obtain counsel, if they desire, prior to the marriage. Some of the famous challenges to prenuptial agreements included one involving John and Cristina DeLorean. The prenup was signed by then model Christina Ferrare immediately before their wedding ceremony was scheduled to begin. The divorce would take years to settle because of the circumstances of the signing leasing to challenges to the agreement based on duress. The court battle brought the California and New Jersey courts into the fray with conflicting rulings and confusion about where their two children would live. Eventually the prenup agreement was upheld, but, by that time Mr. DeLorean's company, known for the infamous DeLorean, featured in the film "Back to the Future," had declared bankruptcy.
The contributions to the business, the location of assets, the valuation of the business, and the spouse's relationships are completely different. However, the absence of a prenuptial agreement has resulted on uncertainty and, absent a post-nuptial property settlement, a great deal of time and money spent in court.
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