In the ultimate expression of #richpeopleproblems, a recently retired Biglaw partner just figured out that $19.5 million is missing. Technically, the money was allegedly slowly stolen by the partner’s spouse over years of financial mismanagement, but the point remains that a partner couldn’t be bothered to keep track of almost $20 million and is now running to court to complain that downright neglect should be rewarded.
Look, it sucks when people take advantage of you, but when a lawyer whose expertise is finance complains that money comes up missing, it’s hard to have much sympathy.
They say lawyers make the worst businesspeople. I guess they’re right…
Hydee Feldstein is a retired partner with Sullivan & Cromwell’s Los Angeles office. From what we hear, she was a great partner to work for, having made our list of the top partners to work for in California. She claims that she was so busy earning all the family money that she didn’t notice her husband and a close friend funneling massive amounts of it into investments intended to conceal the funds.
In January 2013, Feldstein’s husband, who handled their financial matters, filed for divorce, and Feldstein began to examine her finances, she says.
Feldstein claims that “defendants invested more than $19.5 million overseas in defendant Contego Luxembourg, a foreign corporation controlled by VCM. Of the $19.5 million invested, the Versa Company defendants allocated approximately $25,000 to plaintiff. Plaintiff does not know why the fund invested plaintiff’s money in this unusual way.
“Plaintiff is informed and believes, and based thereon alleges, that the unusual foreign transaction reflected on plaintiff’s K-1s is because plaintiff’s husband, or an entity owned or controlled by him, utilized plaintiff’s investment in the fund to conceal over $19.5 million of community property assets from plaintiff by moving them overseas to the Contego defendants, or one of their affiliated entities,” the complaint states.
Note that Hydee Feldstein’s practice focuses on “financings for acquisitions, recapitalizations, spin-offs, restructurings and bankruptcies, including advice to investment banks, financial institutions, funds and other lenders in the areas of strategic, corporate and commercial finance, creditors’ rights, workouts and bankruptcies.” Yet she couldn’t be bothered to keep track of large chunks of money? I get that she trusted her friend and, presumably, her husband, but when millions are at stake it’s worth investing a little time to figure out where it is. Live and learn.
As a sports fan, I can’t help but note the disconnect here. Biglaw partner with financial expertise loses $19.5 million and the rhetoric surrounding the case focuses on the wrongdoing of those who took the money. Athlete who never saw six figures before landing a multi-million dollar deal blows it with bad investments and everyone’s all judgmental about how he “should’ve known better.” If we’re going to blame the victim in either case, it seems like Feldstein would deserve more of that judgment.
So if you feel any cognitive dissonance with this article casting someone as blameworthy when people she trusted allegedly snagged money from her, think about how you felt about every down-on-their-luck, where-are-they-now story on ESPN.
And maybe feel a little worse about those athletes.
What Happened to the $19.5 Million? [Courthouse News Service]