A model of this text first appeared in CNBC’s Inside Wealth publication 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 acquired an uncommon case. A lady got here to the agency asking for illustration in her divorce. Like most of Rottenstreich’s shoppers, the lady and her husband have been rich. Not like most of his shoppers, their fortune got here from crypto. The husband had based a crypto agency, Rottenstreich stated, whose belongings have 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 determine what transactions went on over time,” stated Rottenstreich, accomplice in Rottenstreich Farley Bronstein Fisher Potter Hodas LLP (RFB+Fisher Potter Hodas, for brief). “We do what we all the time do. We comply with the cash.” Following the cash has turn out to be more durable than ever in terms of rich divorces. As right this moment’s fortunes have ballooned in measurement and quantity, they’ve additionally expanded in complexity. Offshoring, holding corporations, extremely specialised trusts and unique jurisdictions all over the world have made discovering marital belongings virtually unimaginable for all however probably 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 Seaside, Florida — it’s quickly grown into the one-stop store for right this moment’s most costly divorces. The agency’s crew of 40 attorneys contains former authorities prosecutors, trial attorneys, industrial litigators, and belief and property consultants, many from the highest regulation faculties and blue-chip companies. The goal, in accordance with Rottenstreich and accomplice Jeff Fisher, is to carry divorce regulation into the trendy wealth age. “Wealth is completely completely different now, and so are the instances,” Fisher stated. “They’re a lot greater and extra sophisticated. We’ve some instances the place we’ve one million 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 Nineteen Eighties. He later moved to Palm Seaside and began taking divorce instances, representing Angela Koch in her much-publicized divorce from Invoice Koch. Over time his agency, then known as Fisher & Bendeck, grew to 10 attorneys, lifted by the rising fortunes and divorces of the Palm Seaside 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 identify, “since we all the time promise confidentiality.” Enterprise was good, however his agency had an issue. His instances have been rising, however he had bother recruiting high regulation expertise to deal with the load. Matrimonial regulation carried a stigma of the Nineteen Eighties and Nineties, when attorneys have been seen as little greater than negotiators for alimony or youngster assist. “We had nice demand however no provide,” he stated. On the identical time, the demographics of wealth have been shifting. Within the Nineties and early 2000s, the wealth in Palm Seaside primarily got here from inheritances or publicly traded inventory, with founders and CEOs. After the 2008 monetary disaster, the bull market and asset growth created large fortunes in tech, non-public fairness, enterprise capital and personal startups. Wealth turned youthful and world — and more and more opaque. Whereas the belongings of the CEO of a publicly traded firm are comparatively simple 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 might broaden to draw extra authorized expertise and higher serve the brand new breed of shoppers. 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 court docket, 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 most 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 shoppers,” Fisher stated. Rottenstreich added, “I favored 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, in accordance with 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 partly 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 stated. “Outdated wealth used to say, ‘I’ve a picture to take care of.’ With Gates and Bezos, that acquired eroded.” Fisher stated high-net-worth divorces in Florida have additionally surged because of the mass wealth migration throughout Covid from the Northeast and California. The agency just lately opened a brand new workplace in Miami. Discovering right this moment’s massive fortunes, nevertheless, has by no means been more durable. In a single case the agency is engaged on, led by founding accomplice 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 sequence of transactions in India that his ex-wife stated lowered the marital property (which Vembu denies). Not one of the attorneys concerned would touch upon the case, however public court docket filings counsel it entails non-public holding corporations within the U.S., Singapore and India with operations all over the world. Trusts have turn out to be a continuing problem for divorce attorneys. Increasingly are being created in Nevada and Wyoming, which make it practically unimaginable even for ex-spouses to gather or peer inside sure asset safety trusts. “Everybody appears to be utilizing Wyoming now,” Rottenstreich stated. “There is no such thing as 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 stated the agency is having to worth the web enterprise with money circulate fashions and progress charges. He stated the vary “may very well be anyplace 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 stated. “So how do you worth them?” With the rich more and more main world lives, hopping from one nation to a different, usually with a number of citizenships and houses all over the world, the agency additionally has to work with completely different jurisdictions. Fisher stated he was working with the American ex-wife of a French billionaire who wished to maintain custody of their daughter. He needed to navigate worldwide regulation to win a fantastic 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 shoppers via probably the most anxious and emotional interval of their lives. “The robust instances are the place we work greatest,” Rottenstreich stated. “As a result of they arrive to belief us. A whole 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 publication with Robert Frank, a weekly information to the high-net-worth investor and client. Sign up to obtain future editions, straight to your inbox.
Final week, Dan Rottenstreich’s regulation agency acquired an uncommon case.
