Divorce is Latest Investment Vehicle: Is it an Ethical Investment?
Nearly 10 years into my (very happy) marriage, I know very little about divorce attorneys, and hope I never find out more. But even I know that in addition to being emotionally taxing, the process of getting divorced itself can be very expensive.
Forbes.com says the average cost of a divorce in the United States ranges from $15,000 to $30,000. Most of this goes directly to divorce attorneys, who make fortunes off other peoples’ misery. And unlike many legal proceedings and lawsuits, divorce attorneys demand their money whether you win or you lose. In short, a man could get raked over the proverbial coals in court and still have a staggering bill awaiting him, just to add insult to injury — unlike other types of law suits in which lawyers only get paid if you win. It is, to say the least, cheaper to keep her.
Of course, with the economy in its current sad state, fewer and fewer unhappily married people are finding the funds necessary to get rid of each other. And lawyers’ fees aside, the simple cost of living apart while you try to get rid of a spouse is also prohibitive. So what can one do if your husband’s getting on your last nerves, but you’re too broke to leave? A new, innovative form of divorce financing might help you roll out before you catch a case:
Michelle Pont and her husband amassed millions of dollars in properties and investments from a freight-hauling business that they started with a single stake-bed truck in 1991. They bought a four-bedroom home, then a second home, a vacation home, a motor home and half a dozen cars.
But when Ms. Pont decided to seek a divorce last year, she quickly ran out of money. She had no job. Her husband controlled the family’s investments. A few months of legal bills maxed out her credit cards and drained her retirement account.
She wrestled with accepting a smaller settlement than she considered fair. Then a lawyer referred her to Balance Point Divorce Funding, a new Beverly Hills lender that offers to cover the cost of breaking up – paying a lawyer, searching for hidden assets, maintaining a lifestyle – in exchange for a share of the winnings. In October, Balance Point agreed to invest more than $200,000 in Ms. Pont’s case.
With some in the financial world willing to bet on almost anything, it should be no surprise that a few would see the potential to profit from the often contentious and emotional process of ending a marriage. Lawsuit lenders initially focused on personal injury cases, but over time they have sought new frontiers, including securities fraud cases brought by disgruntled investors, whistle blower claims against corporations and property development disputes.
Divorce cases may be a promising niche for lenders because costs can mount quickly – some top lawyers in Los Angeles charge more than $500 an hour – and because state laws uniformly require plaintiffs to pay lawyers upfront, rather than promising them a contingency fee, or a share of any winnings, as is common in other civil cases.
The state laws were written to make people think twice before pursuing a divorce.
The marriage of the former hip hop titan and the successful fashion designer has officially run its course. Roy, who has two daughters with Dash, recently filed for divorce in NYC. Luckily for the cash-strapped Dash, she’s seeking “non-monetary relief.”
The marriage of the former hip hop titan and the successful fashion designer has officially run its course. Roy, who has two daughters with Dash, recently filed for divorce in NYC. Luckily for the cash-strapped Dash, she’s seeking “non-monetary relief.”
Top Celebrity Break Ups
Damon Dash & Rachel Roy: Four Years
The marriage of the former hip hop titan and the successful fashion designer has officially run its course. Roy, who has two daughters with Dash, recently filed for divorce in NYC. Luckily for the cash-strapped Dash, she’s seeking “non-monetary relief.”
Wayne Brady & Mandie Taketa: Nine Years
Cheesy singer/game-show host/comedian Wayne Brady and his wife of nine years Mandie Taketa split in April 2008 after a long separation. The official reason for the divorce was “irreconcilable differences,” but Mandie was probably just tired of him spontaneously breaking into song.
Tracy Morgan & Sabina Morgan: 22 Years
In 2007, Sabina Morgan threatened to divorce her well-known husband, Tracy, who spent a good part of that year with a court-ordered alcohol-monitoring bracelet around his ankle. She didn’t go through with it until January of 2008. She cited the ’30 Rock’ star’s drinking problem as her reason. Do you blame her?
Pink & Carey Hart: Two Years
They started out as an unorthodox couple — singer Pink was the one who did the proposing to her motocross-star boyfriend, Carey Hart — and they ended up an unorthodox divorced couple. The two say their relationship became stronger after they split in February.
Morgan Freeman & Myrna Colley-Lee: 24 Years
When Morgan Freeman got in a serious car accident on a lonely Mississippi highway back in August of ’08 with a woman who was not his wife, he probably figured the cat was out of the bag. Before he left the hospital, Freeman announced he was undergoing divorce proceedings with his wife of 24 years.
Madonna & Guy Ritchie: Eight Years
The union of Madonna and director husband Guy Ritchie came to an end last fall, weeks after tabloids began speculating about an affair between Madge and baseball superstar Alex Rodriguez. The tabs aren’t always wrong: Madonna and A-Rod spent quite a bit of quality time together after she and Guy officially split.
Swizz Beatz & Mashonda: Four Years
Producer Swizz Beatz and singer Mashonda’s separation last year seemed like ordinary marital discord, but the situation turned scandalous when rumors surfaced that Alicia Keys might be to blame. All parties have denied the allegations, but the rumors definitely made the divorce fodder for gossip blogs.
Kanye West & Alexis Phifer: Six Years (on and off)
Kanye West has been on love lockdown since breaking his engagement with his longtime girlfriend, Alexis Phifer, back in April of 2008. After losing his mother and his girl in a matter of months, its no wonder ‘Ye sounds so melancholy on ‘808’s and Heartbreak.’
Star Jones & Al Reynolds: Four Years
They said it wouldn’t last… and they were right. Star and Al’s improbable union, which began in November of 2004 with a highly-publicized New York City extravaganza, ended when the former ‘View’ co-host filed divorce papers in March of ’08. What’s Al Reynolds to do now that he’s no longer Mr. Star Jones?
LisaRaye McCoy-Misick & Michael Misick: Three Years
LisaRaye and husband Michael, the premier of Turks & Caicos, seemed like the perfect island society couple. Wrong! Their three-year marriage ended last summer amid rape allegations, government corruption investigations and a rumored affair between Premier Misick and a certain BET
In all fairness, the divorce cases mentioned in this article involve very wealthy couples, typically with several million dollars in marital assets. I doubt any firm is going to finance such a case if the guy (or lady) being sued works at Sizzler. This is, after all, about money. Eff’ the institution of marriage, or good taste for that matter. Still, it’s a pretty sad sign of the times when you can actually get a loan to help end your marriage. But from the standpoint of a financial investment, it does certainly appear to be one of the safer investment vehicles out there.
