(Bloomberg) — John Paulson was accused by his wife Jenica of secretly creating a series of trusts to hide billions of dollars in assets from her in their divorce.
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Jenica Paulson, 50, sued her husband Thursday in state court in Manhattan, claiming he and “a cadre of hand-picked agents and advisors” worked to establish three irrevocable trusts to make sure she didn’t get her “fair and equitable share of assets.” She is asking for at least $1 billion in damages from her “astronomically wealthy” husband.
John Paulson, the 66-year-old head of Paulson & Co., filed for divorce in state court in Long Island in September. He and his wife, whom he initially met when she delivered lunch to him and his staff from the Bear Stearns cafeteria, have been married for more than 20 years and have two teenage daughters. She said in her suit that she learned of his divorce filing from the New York Post.
A representative for Paulson didn’t immediately respond to a request for comment.
Paulson has a net worth of $4.6 billion, according to the Bloomberg Billionaires Index, mostly due to his winning bet against the US housing market ahead of the 2008 financial crisis, which made $15 billion for himself and investors when the market collapsed. He turned his hedge fund firm into a family office in 2020 after assets dropped to about $9 billion in 2019 from a peak of $38 billion in 2011.
The suit describes Jenica Paulson as a wife who “dutifully and thoughtfully” cultivated her husband’s business and social relationships while relying on him to handle the family’s finances.
“Mrs. Paulson acted at all times in reasonable reliance on her husband’s obvious expertise, reassured by him that this was an area with which she need not concern herself,” she said. He responded by abusing her trust, she claims.
“While Mrs. Paulson was a loyal wife, her husband exhibited no such fealty,” she said in the suit. “Instead, Mr. Paulson rewarded his wife’s devotion by implementing a plan, over a nine-year period, to insulate assets acquired during the course of their marriage from Mrs. Paulson’s reach and thereby to deprive her of her fair and equitable share.”
She alleges that the three trusts were secretly set up in 2001, 2006 and 2009 to specifically exclude her in the case of a divorce, and that none of the assets have been distributed to her or their children, who are “ostensibly the primary beneficiaries of the trusts.” In reality, she claims, he was the only real beneficiary.
“While the trusts created by Mr. Paulson ostensibly served as vehicles for the financial benefit of his family, in reality they were post-nuptial substitutes made unilaterally by one spouse without the other’s knowledge or consent and served to evade Mr. Paulson’s lawful obligations in the event of divorce,” Jenica Paulson said in her complaint.
She said she only learned of the trusts after his divorce filing. In addition to her husband, Jenica Paulson is also suing trustee Jeffrey Bortnick and J.P. Morgan Trust Co. of Delaware. Among the six claims included in her complaint are fraudulent conveyance, fraudulent concealment and breach of fiduciary duty.
“Now aware of what her husband has done, Mrs. Paulson seeks only to secure her rights,” she said. “Mr. Paulson’s attempt to dispose – unilaterally and in secret – of billions in assets violates the well-settled protections established for spousal creditors in this State.”
In addition to financial assets, the family has an extensive collection of real estate, including an Aspen ranch that previously belonged to a Saudi prince and an estate in the Hamptons purchased for $41 million in 2008. John Paulson also made investments in Puerto Rico, buying majority stakes in the Condado Vanderbilt Hotel, La Concha Renaissance Resort and St. Regis Bahia Beach Resort.
The case is Jenica Paulson v John Paulson, New York State Supreme Court, New York County (Manhattan.)
(Updates with claims included in lawsuit. A previous version of this story corrected spellings of trustee and trust company in 11th paragraph.)
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Six people in critical condition, one still missing after Paris blast – prosecutor
© Reuters. French firefighters and rescue forces work after several buildings on fire following a gas explosion in the fifth arrondissement of Paris, France, June 21, 2023. REUTERS/Gonzalo Fuentes
PARIS (Reuters) – Six people remained in a critical condition and one person was believed still missing on Thursday, one day after a blast ripped through a street near Paris’ historic Latin Quarter, the city’s public prosecution office said. “These figures may still change,” prosecutor Maylis De Roeck told Reuters in a text message, adding that around 50 people had been injured in the blast, which set buildings ablaze and caused the front of one to collapse onto the street. Of two people initially believed missing, one has been found in hospital and is being taken care of, the prosecutor said, adding: “Searches are ongoing to find the second person.” Authorities have not yet said what caused the explosion, which witnesses said had followed a strong smell of gas at the site. The explosion led to scenes of chaos and destruction in the historic Rue Saint Jacques, which runs from the Notre-Dame de Paris Cathedral to the Sorbonne University, just as people were heading home from work. It also destroyed the facade of a building housing the Paris American Academy design school popular with foreign students. Florence Berthout, mayor of the Paris district where the blast occurred, said 12 students who should have been in the academy’s classrooms at the time had fortunately gone to visit an exhibition with their teacher.
“Otherwise the (death toll) could have been absolutely horrific,” Berthout told BFM TV. She said three children who had been passing by at the time were among the injured, although their lives were not in danger.
4 big analyst cuts: Alcoa & DigitalOcean shares drop on downgrades
Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Alcoa, DigitalOcean, Teleflex, and Xcel Energy.InvestingPro subscribers got this news in rapid fire. Never be left in the dust again.Alcoa stock drops on Morgan Stanley downgrade Alcoa (NYSE:) shares fell more than 3% pre-market today after Morgan Stanley downgraded the company to Underweight from Equalweight and cut its price target to $33.00 from $43.00, as reported in real time on InvestingPro.The firm sees a significant decline in consensus estimates, and as negative earnings revisions materialize, it believes the stock will face downward pressure and underperform.The analyst’s estimates for EBITDA in Q2, 2023, and 2024 are substantially lower than the consensus. The stock is currently trading above its historical average. The firm said its downward revisions in earnings estimates and price target are attributed to the company’s high operating leverage to aluminum prices.DigitalOcean stock plunges on downgradePiper Sandler downgraded DigitalOcean (NYSE:) to Underweight from Neutral with a price target of $35.00. As a result, shares plunged more than 5% pre-market today.The company reported its last month, with revenue beating the consensus estimate, while EPS coming in worse than expected. Furthermore, the company provided a strong outlook, which was above the Street estimates.2 more downgradesTeleflex (NYSE:) shares fell more than 3% yesterday after Needham downgraded the company to Hold from Buy, noting that UroLift expectations may still be too high.According to Needham, their checks indicate that urologists are reducing their use of UroLift due to its retreatment rates, reimbursement cuts, and increasing use of competing procedures. This is also supported by their Google Trends data analysis, which indicates decreasing search interest in UroLift.BMO Capital downgraded Xcel Energy (NASDAQ:) to Market Perform from Outperform and cut its price target to $64.00 from $69.00 to reflect the lower-than-expected terms of the company’s regulatory settlement in Colorado.Amid whipsaw markets and a slew of critical headlines, seize on the right timing to protect your profits: Always be the first to know with InvestingPro.Start your free 7-day trial now.
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