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In May 1998, when Luke Weinstein got divorced, his stock in the small computer company, Product Technologies Inc. (PTI), was only worth $40,000 — according to his financial affidavit for his divorce settlement. Five months later, his stock in the company that pioneered “smart card” technology, was purchased for $1,449,000 — 36 times the value his financial expert calculated.
In an effort to get what she considers her fair share of this windfall, his wife, Nancy, sued to open the divorce settlement on grounds of fraud. Although she's lost in two courts so far, many divorce lawyers are hoping she'll win at the Connecticut Supreme Court, to preserve hard-won principles of frankness and disclosure in divorce settlements.
Last year, an appellate court concluded that the wife could not attack the settlement terms because she failed to prove fraud. The court compared the rapid $1.45 million increase to “the occurrence of a windfall or an unexpected post-divorce prosperity.” Now the Connecticut Supreme Court is being asked to examine just how forthcoming divorcing parties and their lawyers need to be about financial documents.
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