Can A Madoff Ponzi Scheme Victim Recover Monies Promised In A Past Divorce?

Can A Madoff Ponzi Scheme Victim Recover Monies Promised In A Past Divorce?

Paul Weiss partner, Steven Simkin, was divorced from his wife Laura Blank in 2006. As per the terms of their settlement agreement, Ms. Blank was provided with $6.25 million together with real estate and other assets. Mr. Simkin has now returned to court claiming that $2.7 million of the $6.25 million settlement was attributable to her share of a Madoff account valued at $5.4 million.

Blank’s attorney argued that should the court rule in favor of Simkin, every ex-spouse could return to court after a future change in value of bank account. Divorce cases would never end. This would result in a very dangerous precedent.

The lower court dismissed the case. The Appellate Division, First Department has now reinstated the complaint citing the doctrines of “mutual mistake” and “unjust enrichment.” The two dissenting justices in the Appellate Division case indicated that the decision “undermines decades of established precedent favoring finality in divorce cases.”

Blank’s attorney claims he will take the case to the Court of Appeals. The outcome of this matter remains to be seen. However, if Mr. Simkin has any chance at success, the higher court will proceed with caution in limiting their holding to a very specific set of facts so as to limit dangerous precedent.

Keil & Siegel, L.L.P. are skilled NY divorce attorneys, specializing in uncontested divorce, separation agreements, and other family law services. Keil & Siegel, L.L.P., serves clients in Long Island and New York City, including Nassau & Suffolk Counties, Manhattan, Queens, Jamaica and the Bronx as well as Great Neck, Mineola, Hicksville, and Garden City.

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