Domestic disputes among the super-rich almost never come to family court. It's not that marital bliss always prevails among the super-rich. It's simply that unlike the average Israeli couple, which has to go to court to get a divorce, the wealthiest Israelis prefer to settle matters between their lawyers.
The ultra-rich and their former spouses know well that "silence is golden," and to the extent possible, most prefer to stick to the option of cash in return for sealed lips. The attorneys who draft the prenuptial agreements at the inception of the marriage will only engage in litigation if one spouse is especially belligerent. Granted, lawyers always make their big money in legal battles, but the super-rich generally prefer to be spared the mudslinging and the personal and financial exposure. Nevertheless, sometimes a local tycoon's name does surface in family court.
In the past year, lawyers have handled the third divorce of Bank Hapoalim's controlling shareholder, Shari Arison, and the third marriage of Israel Corporation chairman Idan Ofer, who was divorced twice in the past decade. The marriage took place against the backdrop of a divorce dispute with his second wife, Yifat Gurion.
Exactly a year ago, Gurion filed a demand with the Tel Aviv District Court that the Ofer family's business lawyer, Ram Caspi, hand over drafts of the prenuptial agreement that she signed in 2002. She claimed Caspi had told her he would consult Ofer on the matter, but refused to turn over the documents.
Ofer told the court he considered her demand "invalid, not in good faith and inappropriate" and even "an abuse of the legal system." Her goal, Ofer added, "is to create something from nothing and to bring arguments before the court that have no basis in fact."
Caspi noted that he prepared the agreement because of his personal friendship with the family and the fact that he served as a legal adviser to the Israel Corporation, but said he did not receive compensation for his work.
These cases follow the high-profile divorce of Iscar Blades founder Stef Wertheimer, who divorced his wife, Yael, four years ago; of Strauss group chairwoman Ofra Strauss and Dan Lahat; and of high-profile lawyer Yigal Arnon, who divorced his wife, Saki, a woman more than 20 years his junior. Arnon was forced to reveal that he had not reported his 1% stake in Cellcom because he wanted to conceal it from his wife due to the divorce proceedings. The couple had married without a prenuptial agreement.
Their divorce gave Mrs. Arnon a 9% stake in Knafaim, constituting half her husband's stock in the holding company that owns El Al. Over the following years, Saki Arnon sold a portion of that interest for NIS 32 million. She kept hold of 5.8% of Cellcom's stock, an interest thought to be worth tens of millions of shekels.
About a year ago, Yigal Arnon won a suit against the former chairman of First International Bank of Israel, Shlomo Piotrkowsky, giving Arnon an additional 1% of Cellcom's stock, valued at NIS 80 million. An appeal was filed to the Supreme Court over that case.
Divorce lawyers generally charge the wealthier half of the couple by the hour. From the other side, they generally demand a percentage of the settlement, which can be worth even more. Stef Wertheimer's divorce, for instance, is thought to have generated legal fees of more than $5 million.
Celebrities and politicians generally prefer to avoid lawsuits that might tarnish their public reputations. Business people, on the other hand, seek to avoid litigation for fear of damaging their businesses, of having liens placed on their property and of efforts to make their companies a party to the case, which might disclose the extent of their holdings in the companies.
More than once, business people who have rejected their wives' monetary demands have been forced to comply once legal proceedings were initiated that involved liens, restraining orders or requests to make companies and business partners parties to the litigation. The damage and difficulty that divorce entails suddenly becomes tangible.
"It is enough for one party to be a celebrity to render a divorce agreement something out of the ordinary," said attorney Ruth Dayan-Wolfner, whose firm specializes in divorce cases.
How do divorce agreements involving the super-rich differ from regular divorces? Here are some of the key provisions:
1. Confidentiality: A provision in the agreement barring the spouse from being interviewed, or from disclosing any details of the divorce agreement or of the couple's personal life together. The provision is designed to directly and indirectly prevent media disclosure about the personal life of the wealthy individual, his habits, his relationships with his spouse and children, his property and similar matters.
According to Dayan-Wolfner, "the divorce agreement contains a great deal of information about the way of life and property of the famous individual. The agreement includes provisions regarding when they see their children, the extent of alimony that [the wealthy spouse] is paying and details whose disclosure could cause great embarrassment, along with damage to reputation." A businessman's reputation affects his income and employment, and therefore, any bit of information like this is significant.
"To enforce a confidentiality clause, there is a provision for monetary sanctions, a fine of tens or hundreds of thousands of dollars against the party who provides information," Dayan-Wolfner explained. "The fine must be sufficiently painful, but also possible to enforce, in the hope that the very fact that monetary sanctions exist will deter the spouse even if the ability to enforce [the provision] is not high."
She said this type of agreement is problematic, because it is not always possible to control the source of the information, which sometimes results in leaks to the media. "In the absence of a public interview, it is difficult or even impossible to prove who the source who disclosed the information was and which spouse breached the confidentiality provision."
2. Division of assets: The businessperson's goal is to sever financial ties with the former spouse, to remain with the assets accumulated in his own business dealings and to compensate the other spouse by transferring real estate assets or making a one-time cash payment. Dayan-Wolfner said the divorce settlement should make a distinction between current capital, which can be divided, and future capital, which at most can be addressed through a one-time payment. Sometimes, for example, a spouse is promised a fixed monthly income for a set period, with this income including a portion of the future income generated during their life as a married couple.
3. Disclosure of legal proceedings: Proceedings in family court are confidential, but the couple's concern is media disclosure: the prospect of a clutch of press photographers accompanying them to and from the courtroom. Protracted legal proceedings can result in the disclosure of a wealth of details that the celebrity might want to keep private. To achieve a media blackout, the celebrity will have to make concessions, mostly of the financial kind.
Dayan-Wolfner tells of an instance in which, over the course of a legal dispute between the spouses, a number of details about the celebrity reached the media. "He immediately accused his wife, who adamantly denied that she had had anything to do with it," Dayan-Wolfner said. "Ultimately, it turned out that the private investigator the woman had hired at the beginning of the proceedings had leaked a great deal of information. As a practical matter, there is no such thing as complete control over confidentiality of information when legal proceedings are being conducted."
4. Prenuptials: The wise wealthy spouse will avoid the problem in advance through a prenuptial agreement that provides for a division of property in the event of a divorce. The agreement will include a confidentiality provision, as well as provisions for alimony. Lawyers generally include a provision ensuring that the other spouse will have no interest in the businessperson's principal assets, his profession, his goodwill, his income, his real estate or stock and his other financial holdings. Frequently, one spouse promises to maintain the other at a certain financial level, with the level changing according to how long the couple has been married.
?The business guy? Clients: Romi Ofer ?(Idan Ofer?s first wife?); Yaron Miller ?(an owner of Flying Carpet?), in two divorces; Irit Koffler-Strauss ?(daughter of Miki Strauss?) in a divorce from Leon Koffler ?(an owner of Super-Pharm?); Riki Kastiel ?(wife of Moshe, one of the owners of Kastiel design stores?); Nicole Halperin-Maneh in her divorce from Roni Maneh; Evelyn Douek ?(daughter of millionaire Leon Taman?) in her divorce from Roni Douek; Ruti Broza in her divorce from singer David Broza; Yael Gilat-Nimrodi (daughter of Yaakov and sister of Ofer Nimrodi?) in her divorce from attorney Tamir Gilat.
Experience: 36 years.
Road to the top: After an apprenticeship at Ram Caspi & Co., he went into private practice. After 15 years in commercial and white-collar law, he began specializing in domestic relations and estate law.
Work motto: The key to success is a combination of expertise in two very different legal fields domestic relations and commercial law along with decades of hard work and handling daily court appearances. What they say about him: Clever and sophisticated.
?Seasoned? Clients: Yael Wertheimer, in the preliminary stage that preceded legal action against Stef Wertheimer; businesswoman Aya Azrielant, against high-tech millionaire Efi Arazi; Hava Hachmi, against insurance mogul Yossi Chachmi; singer Kobi Oz in his divorce; Hana Laszlo against Aviv Giladi; the late artist Meir Pichhadze in his divorce.
Experience: 28 years.
Road to the top: Over the years, Aviv made contact with prominent civil and commercial law firms that referred wealthy clients to him for their domestic issues. The referring firms include the offices of Ram Caspi; Jacob Weinroth; S. Horowitz and Co.; and Goldbarb, Levy.
Work motto: Go to court only when there is no alternative. It is always better to resolve disputes through negotiations, in the most discrete and pleasant manner possible. Going to court only as a last resort makes it possible to fight there with full force.
What they say about him: Aggressive and crafty.
?Discreet? Clients: Idan Ofer, in separation agreements with two former wives; Shari Arison in various personal matters, including legal proceedings in Florida over a child custody dispute with Michael Dorsman and a separation and divorce agreement with Ofer Glazer; the heirs of billionaire Sami Shamoon, in an inheritance dispute; businessman Udi Angel ?(a partner of the Ofer family?), in his divorce from Liora Ofer; former minister Yuli Tamir, in her divorce from businessman Loni Rafaeli; David Libai, who was justice minister at the time, in divorce proceedings against Nitza Libai.
Experience: 40 years.
Road to the top: 90% of his clients are referred to him for help in domestic or probate cases by leading law firms. He only handles these kinds of cases. He accepts very few cases a year, and handles them personally.
Work motto: Maintain discretion.
What they say about him: A little aggressive, but open to negotiations.
?Pleasant? Clients: Stef Wertheimer in his divorce from Yael; Roni Douek in his divorce from Evelyn; Nava Barak in her divorce from Ehud Barak; Udi Recanati in two divorces; Nissim Mishal in his divorce from Miriam; Galia Albin in her divorce from Kobi; Michael Dorsman in his divorce from Shari Arison.
Experience: 24 years.
Road to the top: Combining his academic work as a lecturer at both Tel Aviv University and the Interdisciplinary Center in Herzliya with his legal practice.
Work motto: In every dispute there are at least two sides, and not only the side that you represent needs to be heard. Try to be attentive to all sides of an issue and find a solution that is appropriate for everyone involved. To the extent possible, try to maintain rules of fairness and don?t exploit the legal process. I won?t represent a party if I don?t agree with his approach or conduct.
What they say about him: Pleasant, fair, smart.
?The arbitrator? Clients: Arbitrated between Stef and Yael Wertheimer; was part of the legal team that represented Shari Arison in a custody case in Miami against Michael Dorsman; represented Saki Arnon in her divorce from Yigal Arnon; is handling the estate of late billionaire Sami Shamoon; mediated between Michel Mercier and his wife, Ronit Zilberstein.
Experience: 21 years.
Road to the top: As a private attorney, he specialized in domestic relations and also taught at Tel Aviv University. He served as a family court judge for four years. For the past six years, he has been engaged in mediation and arbitration, primarily involving domestic disputes.
Work motto: Be compassionate and to the point.
What they say about him: Very professional, but his fees are very high.
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