Monday, January 26, 2009

So... can everybody do this to avoid liens and taxes and stuff?

Or is this an action only disgraced CEOs can do under the radar?

Richard Fuld, the disgraced former chief executive of Lehman Brothers, sold his $13.3 million (£9.6 million) Florida mansion to his wife in November for $100, according to real estate records.

Mr Fuld, who is widely blamed for the collapse of Lehman Brothers in September last year, bought the house with his wife, Kathleen, in March 2004 for $13.75 million.

On November 10, the 62-year-old banker transferred the seaside mansion into Mrs Fuld's name in return for $100.

Mr Fuld is expected to face civil lawsuits from shareholders furious that he allowed Lehman to fall into bankruptcy rather than be sold months earlier.

4 comments:

Steve Bates said...

"... His wife could eat no lien..."

I'm betting he gets away with it.

ellroon said...

If he falls on his face on this one we could call him Jack Splat...

Bryan said...

He transferred the property with a quit-claim deed. The amount is probably $10, not $100, and this is a stock form with $10 already filled in.

All that is required is a legal description of the property, and the signatures of both parties witnessed by a notary public. It is then filed.

It is a totally legal, and normal way of transferring property between family members.

It is also totally worthless if he is sued, as the plaintiffs will have no trouble proving an attempt to shield wealth from recovery. As the state of Florida is one of the possible plaintiffs, I think he can forget that dodge. This is a community property state, so he owns half of it regardless of whose name is on the deed.

Of course, if his wife divorces him, he has a problem, because she can claim that he forfeited any claim to the property by making the transfer.

Mr. Fuld didn't think this through.

ellroon said...

Run away, Mrs. Fuld! Run away and take the house with you!