A Roadmap for Discovery in Complex Divorce
When you need an asset search while contemplating or in the midst of a divorce, there are the usual kinds and the highly complex kinds.
It’s one thing to look at a guy with two houses, a small fleet of trucks and two heating and cooling businesses. You may find an extra house, or that the businesses are funneling money to another company or two your client didn’t know about. But that is not highly complex.
By “complex,” I’m talking about husband and wife who jointly run ten businesses with sales in the millions, and who each maintain a few businesses not jointly owned. Each accuses the other of fake invoicing to take money out of the joint enterprises. They allege that the wholly owned businesses are artificially depressing their values. There are overseas trusts – set up by both but with one side accusing the other of fraud by inducing payment to a trust that was never funded.
The initial batch of documents from both sides (before follow-up demands for production), including bank statements, the suspect invoices, the trust documents and more, run into the hundreds.
We sometimes get asked by the lawyers drowning in all of this:
- What do we have?
- What are we missing?
- What do we need to ask the other side for?
- What does our side need to tell us that they are not?
You Won’t Crack This in a Week
Lawyers who hire us to make the roadmap know that our report isn’t the end of the asset search. It’s part of the beginning. You ask for material, and then you have to read it, make sense of it, judge how responsive it’s been.
Sometimes there is additional useful material (bank statements for companies you’ve discovered, for example).
Sometimes that extra useful material prompts further requests in discovery (those bank statements reveal lots of transfers to yet other new entities, seemingly controlled by the other side).
Sometimes one of the suspect invoices to a vacation home in Lake Tahoe (an odd place to order industrial supplies) turns out to be the home of a suspected ally of the other side, and he happens to have other companies run out of the vacation home. Since he does business with the spouse’s entities, he is someone you would want to talk to (on the other side of a deposition table, perhaps).
Plugging Up Rabbit Holes
Another function of a good road map is to figure out where not to spend time and money digging. Sometimes a spouse gets fixated on transactions the other spouse conducted nine years ago. If you dig a little and find that the company involved has long been insolvent and never seems to have done significant business, you can probably leave that avenue of inquiry aside.
For now, at least. You can’t look everywhere, and sometimes an initial impression can be incorrect, but if you have limited budget and time (always the case), you have to go for the higher-probability hits.
Photo: OpenStreetMap contributors – OpenStreetMap.org, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=10839661
