Going beyond asset protection.....

So, I became friends with my next door neighbor and sort of fell into this, because I enjoy unraveling mysteries ;-). I’ll be giving lots of info, so maybe more than you want to read. I like the challenge of figuring this out.

She’s been in the middle of a divorce for 7 years. She says that her husband had a lot of income during their 17 years of marriage and they were very, very well off. her husband filed for bankruptcy and claimed no property ownership. But my neighbor has several addresses and knew that he owned. Her attorney didn’t believe her and didn’t do much about following up on her suggestions. She knows that he used all kinds of entities, not his name, but even did identity fraud by using her name to get mortgages and then transfered deed into his name. When she caught him and transfered it back into her name to cover her butt, he had her thrown into jail. it’s been really ugly.

So, here I come and started having fun picking things apart by being used to looking at property records and probate paperwork etc. and found stuff:

One of the addresses she knew he owns part of, is a big commercial building in Manhattan, across from the Empire State building. A joint venture of various investors bought it in the 50’s and her father-in-was part of it. No details in the F-I-L will, but her mother in law’s will states that my neighbor’s husband gets his mother’s share of this particular building. I also found documents where my neighbor’s brother-in-law’s share of this building is being transferred by his executor. Supposedly owning 2% of this building and the share being worth $ 19 million in 2007.

Then there was a deposition of the company that manages the building, that states that the husband owns 3% of that building. But the lawyer never followed up on that. (I wonder if he was paid off. He also never gave any of that info to the husband’s bankruptcy trustee)

Then there’s another commercial building in the prime of Manhattan, where 1 of the documents has an attachment that mentions all the investors and their share. It mentions the brother-in-law owning 3% of that building (but I never see a transfer by the executor) and another 3% right below that is owned by Suntrust as trustee (I sort of assume that this may be the husband’s share when he was still a child at the time in the 50’s).

The joint ventures are named 'spelled out addresses of the buildings 'associates and refer to an agreement from June 21, 1954.

I know they are obviously trying to protect their assets, but I wonder if there is anywhere where that agreement would have been recorded? Or would that only stay between the joint venture partners?

Any of you that are more familiar with asset protection and commercial properties - what steps would you take to get more backup, if you didn’t have a lot of money to spend?

wow, nice mystery!

As mentioned, they have very likely left no recorded docs other than the deed. They likely paid professionals to design expert asset protection.

What to do on the cheap?

Fire current counsel.
Can we identify and what can we learn from the other 97% owners of these buildings?
Find contingent fee counsel that has a Manhattan real estate title expert (Ideally, a pissed off divorcee).
There’s always a title trail. Research each entity tied to ownership/conveyance.
Can they find a reason to slap a legitimate lien on the property given her claim of partial ownership?
Then get paid to go away.
Can they hound the ex enough and bluff that they have hard evidence regarding fraudulent conveyance to make him more uncomfortable?

This provides coverage for building law, safety, equipment breakdown, utility and more. Nonetheless, I think this scenario is more personal than business, even if they have protection from their commercial properties.

Disclaimer: I’m not an attorney and I don’t play one on TV.

It is possible that she does not have a claim to it, even if he disclosed anything. A spouse does not always have a claim for something that maybe considered an inheritance. Whether he inherits before marriage or during marriage. It might depend on the specific State law. In Florida, if a spouse receives an inheritance and it is kept separate (not commingled with marriage assets), it is not part of the “bounty” the other spouse can put a claim on.

Now, if he owned an income-generating beneficial interest and hid it from the bankruptcy court and also from the divorce court…hmmm…that could be considered fraud. If this has never been reported in a tax return, it might be all kinds of interesting things.

If she is in “hell hath no fury…” mode, then finding an attorney in similar mode might be what she needs.

BK Fraud is FBI territory

If you have any real evidence that H lied or hid assets in his BK filing I’ll guarantee you that FBI would be very interested in same as that would constitute federal fraud, a felony.

Anybody can (unless changed from last time I looked) find and register on www.pacer.gov and find, check & print copy of any/everything filed in any US BK Court proceeding so you can check out anybody’s BK filings in privacy of your own laptop.

Suggestion: Make a written deal with your friend that she’ll give you “x” % of ownership in any assets you uncover so your time is paid for…not oral but written and signed by her.