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 client. Signal as much as obtain future editions, straight to your inbox. Final week, Dan Rottenstreich’s regulation agency obtained 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 had 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 belongings had 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, usher in 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 at all times do. We comply with the cash.” Following the cash has turn out to be tougher than ever in relation to rich divorces. As at the moment’s fortunes have ballooned in dimension and quantity, they’ve additionally expanded in complexity. Offshoring, holding corporations, extremely specialised trusts and unique jurisdictions world wide have made discovering marital belongings nearly inconceivable for all however essentially 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 regulation companies — one in New York and one in Palm Seashore, Florida — it’s quickly grown into the one-stop store for at the moment’s costliest divorces. The agency’s workforce of 40 legal professionals contains former authorities prosecutors, trial legal professionals, business litigators, and belief and property consultants, many from the highest regulation colleges and blue-chip companies. The purpose, based on Rottenstreich and associate Jeff Fisher, is to convey divorce regulation into the fashionable wealth age. “Wealth is completely completely different now, and so are the instances,” Fisher mentioned. “They’re a lot larger and extra sophisticated. We now have some instances the place we’ve got 1,000,000 paperwork.” The story behind the brand new regulation agency, and its clientele, mirrors the fast evolution of wealth over the previous twenty years. Fisher, one of many founding companions, began as an assistant U.S. legal professional for the Southern District of Florida, prosecuting drug and financial institution fraud instances in Miami within the early Eighties. He later moved to Palm Seashore and began taking divorce instances, 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 at all times promise confidentiality.” Enterprise was good, however his agency had an issue. His instances had been rising, however he had bother recruiting prime regulation expertise to deal with the load. Matrimonial regulation carried a stigma of the Eighties and Nineteen Nineties, when legal professionals had been seen as little greater than negotiators for alimony or little one help. “We had nice demand however no provide,” he mentioned. On the identical time, the demographics of wealth had been shifting. Within 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 increase created huge 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 belongings 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 brand new breed of worldwide tremendous wealthy made their cash from secretive hedge funds, PE companies and personal corporations, with little or no public information. Fisher began fascinated about how he may broaden to draw extra authorized expertise and higher serve the brand 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 courtroom, 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 preferred the man. And it’s been seamless.” Enterprise is booming. The variety of billionaires on the earth has practically doubled over the previous decade, to greater than 2,800, based on Forbes. The variety of folks value $30 million or extra has soared to over 426,000. As Fisher says “extra wealth means extra divorces.” On 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. “Previous wealth used to say, ‘I’ve a picture to keep up.’ With Gates and Bezos, that obtained eroded.” Fisher mentioned high-net-worth divorces in Florida have additionally surged as a result of mass wealth migration throughout Covid from the Northeast and California. The agency just lately opened a brand new workplace in Miami. Discovering at the moment’s massive 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). Not one of the attorneys concerned would touch upon the case, however public courtroom filings counsel it entails non-public holding corporations within the U.S., Singapore and India with operations world wide. Trusts have turn out to be a relentless problem for divorce attorneys. Increasingly more 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 a doubt trusts are getting used to defend belongings.” One other case the agency is engaged on entails a social influencer and web persona. Whereas they’ll’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 usually used to generate gross sales. “Social media accounts with tens of millions 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, usually with a number of citizenships and houses world wide, the agency additionally has to work with completely different jurisdictions. Fisher mentioned he was working with the American ex-wife of a French billionaire who needed to maintain custody of their daughter. He needed to navigate worldwide regulation to win a wonderful in opposition to the ex-husband of $700,000 per week till the daughter was returned. Ultimately, the attorneys say what issues most is teaching purchasers via essentially the most demanding and emotional interval of their lives. “The robust instances are the place we work greatest,” Rottenstreich mentioned. “As a result of they arrive to belief us. Quite a lot of 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 client. Enroll to obtain future editions, straight to your inbox.
Final week, Dan Rottenstreich’s regulation agency obtained an uncommon case.