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Cendant Founder Can't Prove Genius

Henry Silverman may be a genius, he just can't prove it in a New York court.

The Cendant founder met a yoga instructor while waiting online at Starbucks. He filed for divorce to end his 30-year marriage to 66 year-old Nancy Silverman.

Under New York law, the property gained during marriage is presumed to be part of the "marital estate" and subject to "equitable distribution." Silverman is worth $450 million, and didn't want to give his wife her share.

Silverman's attorneys sought to introduce evidence that Silverman got his wealth via his "personal attributes" and therefore the $450 million was due to "personal capital" which he possessed prior to marrying Nancy.

Judge Laura Drager of New York County Supreme Court gave Silverman kudos for a "novel argument" but ruled:

In purporting to prove that the success of the business is solely attributable to his innate genius, the expert opinion evidence offered by the Husband offers no assistance to the finder of fact in fashioning an equitable distribution of the estate based on the contributions of each party to the marital partnership

Just how innate Henry Silverman's genius is may never be known, and that is unfortunate.

Some might argue that Silverman's wife would have been able to defeat the "innate" part, since Silverman was the scion of a wealthy businessman and his first job was with Steve Ross of Warner Communications conglomerate fame.

Silverman is famous on Wall Street for his role in building up a franchisor and then destroying it in what BusinessWeek termed "A Merger Made In Hell... The Decade's Dumbest Deal."

The 1997 merger of Silverman's HFS franchisor with CUC International created Cendant in a deal worth $14 billion. But CUC had been engaged in a massive accounting fraud during which the company created more than half a billion dollars in phantom profits (and that's in 2000 dollars)-- more than 60 percent of the net income was simply created out of thin air.
Silverman v. Silverman, 301856/2009, Supreme Court New York County

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