Recovering Marital Assets Through A Domestic Court
Before leaving New York, the divorcing husband referred to in Skiff-Murray v. Murray, 2005 slip op. 02911(N.Y. App. Div. 3d Dept, June 22, 2005); 17 A.D.3d 807; 793 N.Y.S.2d 243 had fraudulently conveyed his business and former marital residence to his newly created Nevada corporation which was possibly a shell company.
Violating a restraining order, he next transferred this residence from his Nevada corporation to his aunt and uncle, who then mortgaged it to a third party. According to the court in Skiff-Murray, the divorcing husband had "...made it impossible for plaintiff to enforce her judgments for child support arrears or obtain the maintenance, distribution of marital property and counsel fees awarded in the judgment of divorce."
Although recovering assets or bringing forced collection proceedings can be challenging in the foregoing type of situation, an aggrieved divorcing spouse might still succeed in it. Domestic courts can be extremely effective if family members, business entities including shell companies, etc. were used as nominees to hide assets in a divorce. One might file a fraud lawsuit against any nominees who were used to hide marital or other assets, as occurred in Bloomfield v. Bloomfield, 721 N.Y.S. 2d 15 (1st Dept 2001).
As I earlier explained in "Asset Search Tips For Divorce & Child Support Cases" and "Suing When Marital Assets Are Hidden In Divorce", the divorcing wife In Bloomfield sued her husband and brother-in-law, alleging that they had fraudulently conveyed marital property away from her. A divorcing spouse might even add a party hiding marital property to a pending divorce, as mentioned by Schmidt v. Schmidt, 99 A.D.2d 775 (2d Dep't 1984) or Solomon v. Solomon, 136 A.D. 2d 697 (2d Dept 1988).
Domestic courts can also impute earnings when determining issues like child support and maintenance and may therefore provide meaningful relief against a divorcing spouse who hides income. This is what happened in the case of Beth M. v. Joseph M., 2006 slip op. 51490 (N.Y. Sup. Ct. Nassau, July 25, 2006), where the court imputed $100,000 in earnings per year to a divorcing husband.
The divorcing husband in Beth M , asserted a questionable claim of limited earning capacity, had self-created unemployment, missing financial records, testified that he could not recall filing tax returns from 1997 through 2001 and did not know how much money he earned.
Copyright 2007-2009 Fred L. Abrams
