In a high asset divorce, the enforceability of a prenuptial or postnuptial agreement is often a critical issue. It has become an issue recently in the divorce of one high-profile couple, billionaire hedge fund manager Kenneth C. Griffin and his wife. Colorado readers may know of Mr. Griffin as the founder and operator of the giant Citadel fund.
In recent court filings Mr. Griffin disclosed the terms of a prenuptial agreement entered into when he and his wife married in 2003. According to the documents filed by Mr. Griffin, he began paying millions of dollars to Ms. Griffin from the beginning of the marriage, under the terms of the prenup. He has also allegedly given her a payment of approximately $1 million every year since they were wed, as well as joint ownership of their $11 million home in Chicago. The total Ms. Griffin has received so far under the prenup, according to the court filings, is about $37 million, plus a one-half interest in the Chicago home.
Notwithstanding these huge payments, and in light of Mr. Griffin’s vast wealth, it is perhaps not surprising that Ms. Griffin is arguing the prenup is unenforceable. She claims she was pressured into signing it; he has countered that she had it reviewed by three law firms before she agreed to it.
In Colorado, a court can strike down a waiver of alimony in a prenuptial agreement if the waiver is unconscionable, meaning so unfair it shocks the conscience. The court determines whether it is unconscionable at the time of the divorce, not at the time the agreement was signed. And while this prenup may seem extremely generous, it remains to be seen whether a court will find it generous in comparison to what Ms. Griffin would be entitled to in the absence of a prenup.
Source: New York Times, “Citadel’s Griffin Outlines Terms of Prenuptial Agreement in Divorce Fight,” Michael J. de la Merced, Oct. 2, 2014