Suckerpunch down to the wire

[swoop]

Thought it was time to start my new thread....

This is where We left off.
last thread

[labug]

Originally Posted By: labug

If this was happening to your D, how would you counsel her?


Sorry, I missed this question.

I am going to be 100% completely honest. If my D was going though this EXACT scenario, I would suggest to her that she really try to work on the marriage. She has a husband that is willing to try. He is supportive of her position and owns up to his personal mistakes he made during the marriage. He also wishes to fix them. I would then advise her that she has a whole lot to lose by not making an effort....basically exactly what her own parents have told her.

Sorry, I meant the current financial situation. Would you expect your D (and I said D because that's your family, it could also be son) to walk away with nothing $350 a month, if in fact (and we don't know in your sitch) they were legally entitled to more?

[swoop]

I guess the answer would be no, LA...but that's a loaded question for two reasons.

First, she isn't entitled to it legally. It doesn't belong to us, and it hasn't for quite some time. That is the brass tacks about it, regardless of how we paint it. A lot of what hasn't been mentioned here is the benefit W saw from the business. I mean we were given free property, free medical insurance, financial security. We even had free housing for 6 years, didn't even pay utilities. Now that we are parting ways, you don't see the business asking W to give back what the business contributed to her well being for the last 12 years. So is W being fair to my familes business???????

Second, even if she was legally entitled, the equity isn't there. I wouldn't think it was fair of D to want something she was not entitled to either. THAT IS what W is asking for. I mean even if we did have full rights to the house, even if we had made every payment, played our cards right and cashed in now....there would only be roughly $2500-$5000 availble to each of us....she is asking for 40 GRAND!

[MrCAS]

Wow. The greediness inside you is really starting to show, IMO.

You try to paint a pretty picture of how you are doing this and ding that and wish this and that... If only wishes were horses...

So, your wife isn't buying what you are selling. Her wishes and desires are completely out of your control and, IMO, are sounding very resentful because of this. It doesn't sound to me like you have changed much at all through out the course of all of this. The changes you have attempted to make appear to me to be superficial and have many strings attached. If it appears like that to me, then I would bet dollars to doughnuts (unless they are Krispy Kremes and then I would do a twofer) that others might see it that

I could go through point by point and blow your theory out of the water. I owned a business for for five years, went through a merger into a partnership that lasted for sixteen years. I opened up another business after my wife and I moved to another state. I understand business.

I also understand how records can be made to say whatever position you want them to take. I also know I sure wouldn't want to have anyone scouring through my family's business books under some kind of a court order. I don't think that would make for a good Thanksgiving dinner.

You stand tall on the legality of things. My Grandfather used to tell me, "Just because something is legal, it doesn't make it right."

I used to have the same black and white view of life that you seem to have. Life can't be viewed that way. It will only make you angry. Life is about shades of gray (and not that cheesy semi-literate soft core porn novel, either) and about compromise.

These were long, hard, and painful lessons for me to learn.

[swoop]

I could not DISAGREE with you more, Cas.

I am being very protective of the home and the family business. I built the home myself, every nail, shingle and slap of paint. I worked two jobs and literally built this house with my own two hands in my spare time. It has my blood sweat and tears in it. I built it SOLELY for my families benefit, keyword being family. I was humping it for roughly 80-90 hours a week for several years. W wants 40 grand....literally 35,000 dollars more than the equity that the house currently has. Where is my chunk of that prize? Oh right, I am greedy and manipulative, right? I am not being "fair" to the woman who chooses to leave the family unit. What would you consider to be fair, honestly, for both parties? What is "fair"?

Our business has been successfully running and supporting several families for over 40 years. It does not make a mint. Actually it nets a fairly small amount after everything is said and done. It has not made a single dollar more through the benefit of my wife. Actually, it is has benefitted her at times when she did not have any other opertunity for occupation. Now, just because she has been "my Wife" for 9 years my family is supposed to turn part of that over to her? Why?...No really, tell me why exactly I am such a bad person?

[AnotherStander]

SP, just take this for what it's worth, I'm not trying to tell you that you're right or wrong, I'm just trying to prepare you for what is probably going to happen in the D. I see a lot of expectations on your part that I think are not going to be met, I just want you to be as prepared as you can be.

She wants her initial investment plus a return. I think that is selfish. Perhaps my perception is wrong, but she is the one who is choosing to leave the family unit based on her owns needs and decisions.

I understand your anger about her leaving the family, but I'm just asking you to try and step outside of the anger and see your sitch from the perspective of a truly neutral third party (a judge). He is going to view the D as totally "no fault". As such, it is up to him to try and come up with an equitable division of assets with no "blame" for the sitch being assigned to either party. It makes his job more difficult because your home is tied up in the business. It is tough to anticipate what he may say about that, but I would think he might just say "fine, then your W is entitled to half of your share of the business, so now we have to determine the value of your share of the business so we can award her half of that." Then he will likely include the home value in the business assets, because of this:

The house being included in the loan increased the overall value, increasing the collateral.

The home increases the value of the business.

You can argue that the home isn't worth anything and the business isn't worth anything. But I doubt a judge will agree with you. If you're deriving financial benefit from the business, then it has value. And it sounds like it is based on this:

Our business has been successfully running and supporting several families for over 40 years. It does not make a mint. Actually it nets a fairly small amount after everything is said and done.

You're saying there's little to no profits left after your basic living expenses, but, the fact that the business is covering your living expenses means there IS financial benefit coming out of the business, and therefore the business has some value as does your portion of it.

I wished to fix our problems. She did not, so why should it be fair?

This is not a factor, divorce is "no fault" which means the court doesn't assign any blame to either party.

It just doesn't seem right to me that my financial security, as well as my daughers, will be damaged while W walks away with a pocket full of cash to start her new life.

But you have the business and the house, so both of you are walking away with part of the marital assets. That's the way the court will see it, you basically have to "buy out" your W's portion of the business.

It has not made a single dollar more through the benefit of my wife.

Again, I'm just trying to help you understand how a neutral judge is going to see this. He will say that you derived financial benefit from being married, whether that was through a better personal outlook that improved your productivity or because she watched D while you worked or whatever.

The thing is, in a divorce often both parties want to be made whole, but neither will be. She won't get everything she wants, you won't get everything you want. The court has to divide things up and they know they're not going to make any friends in the process, so they'll just do what they think is equitable. Unless you had your W sign a prenup that waives any claim to the business I just don't see you getting out of this without having to pay her something.

[swoop]

This is something I completely understand. My lawyer seems to have a different take on it, but perhaps that is just mumbo jumbo at this point.

With that said, the business is an LLC. What point of an LLC is there, if not to protect it from personal liability? I am not attorney by any means, but that is kind of hard for me to understand. For instance, let's say the judge decides to give half of my portion of the business to W. so now W has 7.5% ownership of the business. How is a value placed on that?

[MrCAS]

Personal liability on an LLC only kicks in you are sued for negligence or go through bankruptcy and even then the protection is limited. It is not a "makes it all go away" magic umbrella as much as you would like it to be.

You keep talking about fair, fair, fair...

No, it isn't fair. Not to your D, to your W, or to you. Divorce is never fair. Ever. I know this firsthand. Neither you or your W, IMO, is being fair. However, that is how the game is played. Perhaps it is your black and white tunnel vision that makes it even more unfair to you. These are negotiations. Neither one of you is going to come out unscathed. If you really think you are, then that is just silliness.

For instance, let's say the judge decides to give half of my portion of the business to W. so now W has 7.5% ownership of the business. How is a value placed on that?

The courts will decide what it is worth what. Whether it is through accountants or tax records or whatever, they are still going to delve through business records to determine a value. So then you have a choice... let her keep her portion or buy her out. Maybe come to a settlement before it gets to that point?

You can disagree with all you would care to. I just see, IMO, an angry man who isn't getting what he wants and is venting, pouting, sulking...

Some people here remind me of an alcoholic businessman that I know professionally... He says to me one day, "MC, why is that people in my town still treat me like an AH? I have been sober for almost a year. You would think they would have seen how much I have changed." I said, "M, being sober for a year doesn't, in some people's minds, make up for the 20+ years you were a drunken jerk."

Personally, I thought M was just being a dry drunk and not really getting sober. He was still a sharp tongued mean old guy when things didn't go his way. He was the "Looky! Looky! I am sober now! Come admire me!" kind of guy. It was a lot of superficial change. The only difference to me was that he didn't drink anymore.

Change is hard. It has to start from within. It is a painful process. Speaking for myself, I had to dig through 50+ years of hate, meanness, anger, hurt, disappointment, and piles of other stuff to get to the scared little man buried under it all. I am still digging out but at least I can breath now.

[Drew]

You'll pay some very expensive lawyers and consultants a LOT of money to determine EXACTLY what her 7.5% is .....

[AnotherStander]

With that said, the business is an LLC. What point of an LLC is there, if not to protect it from personal liability? I am not attorney by any means, but that is kind of hard for me to understand.

I think I mentioned earlier that I was offered a buy-in to an LLC and I talked a lawyer about it because there were several things I wasn't clear on, so here's my understanding of some of these issues:

- An LLC protects you from personal liability in that you cannot be held personally responsible for a debt or oblication incurred by the LLC. In other words, a wronged person can sue the LLC, but cannot sue you personally.

- The LLC "ownership" is handled similar to "property". My boss has health problems, so my question to the lawyer was what would happen to his stake in the company if he died. Like any other property, it would pass on to his heirs (his W in his case). You can imagine how screwed up it would be for me to suddenly find myself joint owner of an architecture firm with someone who knows nothing about architecture, so this was a big concern. The resolution we came up with was to take out insurance policies on each other so if one died the policy would buy out the other's stake in the company. In other words, the deceased partner's shares would pass to the surviving partner, and the deceased partner's W would be compensated from the insurance claim.

For instance, let's say the judge decides to give half of my portion of the business to W. so now W has 7.5% ownership of the business. How is a value placed on that?

In our case we had to pull the financials for the company going back 3 years and use that to determine the value of the company (for insurance purposes). It was a little trickier for us because the company has few hard assets, the real value comes from the current and future work potential. So past profits had to be looked at to determine the "worth" of the LLC.

Now as an extra wrinkle in all of this, I got hit with BD right before this was supposed to be finalized. I discussed it with the lawyer and he said I would have to reimburse W for 1/2 of my stake in the case of D. I ended up passing on the deal, decided there was too much downside risk not knowing if I was headed for D or not.

So in your case, and I'm really just guessing about this, but I would think that the judge would expect your W's lawyer to present financial information demonstrating what their opinion is on the value of your portion of the LLC. Then your lawyer will have to counter that with what you believe the value is (assuming you disagree with your W's assessment) and the judge will have to make a determination.

I am not a lawyer by any stretch of the imagination though, LOL! This is just stuff I talked to a lawyer about. Your sitch may be different, for example if you already owned your portion of the LLC before you were married then perhaps it wouldn't be considered a marital asset.