http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5594623.ece
From The Times
January 27, 2009
Lehman Brothers' Richard Fuld 'sold' mansion to wife for $100
Florida home of Richard Fuld
Christine Seib in New York
The disgraced chief executive of Lehman Brothers transferred ownership of a $14 million Florida mansion to his wife for $100 in a possible attempt to move assets beyond the reach of infuriated investors of the collapsed bank.
Richard Fuld, who led the 158-year-old investment bank to its demise last September, sold the beach-front house to his wife, Kathleen, for $100 (£72) on November 10, according to Marin County real estate records.
The couple had previously jointly owned the Jupiter Island property, which was valued at $13.75million when they bought it in March 2004.
Cityfile.com, the New York website that uncovered the secret sale, speculated: “Could Fuld be worried about the flurry of lawsuits from incensed shareholders and creditors?”
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The 3.3-acre property is one of five luxury homes owned by the Fulds, who spend most of their time at their eight-bedroom mansion in Greenwich, Connecticut.
Mr Fuld has been named in at least one lawsuit filed by San Mateo County seeking damages for the collapse of Lehman Brothers. The Californian local authority lost $150 million on its investment in the Wall Street bank.
Lawyers were divided yesterday over whether the decision to move the mansion into Mrs Fuld's name was an attempt to put assets beyond the reach of investors who intend to sue the former chief executive for compensation. Some lawyers cited Florida's unusually generous home protection laws, which could save the Fulds from losing their house in the event of a lawsuit or bankruptcy.
To take advantage of these rules the couple would have to prove that they resided in Florida, which could be difficult because of the amount of time they spent in New York. Also, if a court decided that Mrs Fuld did not pay enough for the mansion, the transfer would be deemed to be “fraudulent conveyance” that would render the move void, lawyers said.
However, Barry Nelson, an attorney who specialises in asset preservation, said that the mansion would have been protected from creditors under Florida law even if it had remained in joint ownership. “As long as the acquisition of the property was not a fraud on creditors, which it wasn't because it was bought when the bank was doing well, and the debt is only his, not hers, then the property would be protected,” Mr Nelson said.
Since the collapse of Lehman Brothers, the 62-year-old banker, whose combative nature earned him the nickname The Gorilla, has become the symbol of everything that was wrong with Wall Street.
Even after overseeing America's largest bankruptcy, Mr Fuld has refused to admit responsibility for the fate of Lehman Brothers. Questioned by a congressional committee last October, Mr Fuld said that he felt
“horrible about what has happened to the company” but insisted that financial regulators and Congress should share the blame for the demise of the bank.
Mr Fuld also insisted that all his decisions in the months before the bankruptcy were “both prudent and appropriate” given the information that he had at the time.
He was paid $22 million in 2007 but did not receive any bonus or severance payment when he left Lehman Brothers last year. Henry Waxman, a Democrat Congressman, calculated that Mr Fuld had collected $480 million in compensation in eight years at the bank - a figure that Mr Fuld disputed, pointing out that he had taken home $300 million.
According to reports, Mr Fuld was running on a treadmill in the bank's gym, on the day he announced that Lehman Brothers was bankrupt, when he was punched in the face by an irate employee.
Mr Fuld's attorney did not return calls for comment yesterday.
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* Have your say
Can't wait 'til she divorces him!
Rich, London, UK
There is absolutely nothing wrong with the sale of the home for a trifle if there was no indication that the company was in financial trouble at the time of the sale. Have you never been 'sold' something by a family member for a fraction of its cost? (Say, your first car, for a dollar?)
Bradley, Vancouver,
Lawyers are divided over whether it was an attempt to put it beyond the reach of creditors? That's divided into HIS lawyers, and every other lawyer presumably?
So did she pay a fair price? Tell you what, I'll offer her $150 for it, a 50% rise must be more than fair!
Jon, Winchester,
Is there no cut off on such things, i.e. it has to have been done X number of years ago to be able to be binding, in order to stop fraudsters and criminals from doing just what he appears to be trying to do?
Alex, London,
The American public should demand that government do something to stop people like Fuld protecting their assetts through loop holes in the law. Why should people on main street continue to suffer while greedy people like Fuld continue to mint it?
hazel, lONDON, UK
He may not be honest, but at least he's totally transparent!!!!!
That will incense creditors.
Annie H, West Sussex, UK
John, there's a Marin County in Florida, too
Allan, Halver,
Florida's homestead exemption law won't help Mr Fuld much as Marin County is in California.
John George, London, England
Big mansion like that..., we should be able to move in 8 or 10 low income families who have lost their homes. It is immoral for people to continue to 'earn' $millions, while their corporate policies destroy the planet, and we take no care of our communities. CEO's are responsible for their greed.
Damien Cunningham, cassatt, SC, USA
She should have waited. It'll be worth $80 next month.
It's nice to see that he manages his own affairs in as honest and professional a way as he managed the company. The US and other governments may need to invoke some special laws to tackle individuals like Fuld. There are hundreds of them!
Michael, West Midlands,
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