House of cards 2.jpgContinuing to demonstrate New York’s public policy enforcing settlement agreements and the finality they bring to bear on divorce litigation, the Court of Appeals on April 3, 2012 held that the post-agreement discovery that the fact that a marital account had been invested with Bernard Madoff and retained by the husband upon the divorce was not a sufficient basis to set aside that agreement when the Madoff scheme later surfaced.

In 2006, former spouses Steven Simkin and Laura Blank entered a divorce settlement agreement under which Ms. Blank, among other terms, waived spousal support and marital property rights in the value of the husband’s law practice. The husband paid his wife $6.25 million.

Three years later, when the now ex-husband learned he was a victim of Bernard Madoff’s massive Ponzi scheme, he commenced an action against his former wife asking that the 2006 agreement be “reformed” to reflect the mutual mistake made by the parties, i.e., the assumption  that there was an account with Madoff worth $5.4 million. Mr. Simkin alleged that the payment made to his ex-wife under the 2006 agreement was intended to accomplish an “approximately equal division of [the couple’s] marital assets.” In reliance upon that mistaken assumption, the ex-husband claimed he paid his wife $2.7 million which should now be returned.

Continue Reading Husband Keeping Madoff Account in Divorce is Not Basis to Change Pre-Collapse Settlement Agreement