No backsies.
Two stories today about desired contractual do-overs:
1) Madoff Victim Seeks Divorce Do-Over
When the couple split their assets evenly, the largest chunk of money was invested with Mr. Madoff. Mr. Simkin kept much of his funds in the Madoff account, which was held in his name. Ms. Blank, who said she had no interest in investing with Mr. Madoff, received her settlement proceeds in cash.
Shortly after Mr. Madoff admitted wrongdoing in December 2008, Mr. Simkin, a lawyer at one of the country’s most powerful law firms, Paul, Weiss, Rifkind, Wharton & Garrison, filed court papers to drastically alter the terms of his divorce settlement. Ms. Blank, he argued in the lawsuit, should be required to turn over millions of dollars that she had received in their settlement to make up for the substantial losses he had sustained in the fraud.
2) Goldman Sachs Makes an Expensive Typo
On February 11th Goldman issued four warrants tied to Japan’s Nikkei index which were described in three separate filings amounting to several hundred pages. Buried in the instructions to determine the settlement price was a formula that read “(Closing Level – Strike Level) x Index Currency Amount x Exchange Rate”. It is Goldman’s contention that rather than multiplying the currency amount by the exchange rate, it should have divided by the exchange rate. Oops.
…
Goldman has made an offer to buy back the warrants from holders for a 10% premium on their purchase price, plus a fixed payment to cover broker fees. In resisting a settlement tied to the published formula, Goldman cites a clause in the prospectus that lets an issuer change terms “of a formal, minor or technical nature, which is made to correct an obvious error”.
This argument has not won over the 124 warrant-holders. Based on the formula provided in the prospectus, says one of them, Goldman could be on the hook for HK$350m, as opposed to the estimated HK$10m being offered. The bank’s offer has already been extended once because of lacklustre response.
Notes
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billydalto liked this
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tidalwave1 liked this
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placesweusedtogo said:
There is a great comment on the Divorce Do-Over article that just says, “Dude, get a cheaper house”
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kittykittyblog liked this
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brianvan said:
Married couple divides illiquid assets, then a 3rd party is found to have committed ongoing fraud against one side’s disbursement (preceding the divorce contract) leaving it $0… I dunno! Sounds like a shaky but plausible contract waiving situation
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maura liked this
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langer liked this
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youngmanhattanite said:
Is there a formula for “compassion”?
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katiebakes posted this
