Update (July 9, 2014): Chalk up another accurate prediction of Minnesota Litigator in Citizens State Bank Norwood Young America v. Gordon Brown (described below). It would appear that Gordon Brown hoped to avoid creditors by divorcing his wife and giving her his assets as part of the divorce settlement so that creditors could not reach those assets. The plan failed to pass scrutiny at the trial court, the Court of Appeals, and now the Minnesota Supreme Court.
John Halpern, previously profiled on Minnesota Litigator, represented the victorious creditor.
Update (July 23, 2013) (Under the subject line: Clever Lawyering and All-Star Appellate Counsel Fall Short (For Now, At Least)): The Minnesota Supreme Court has granted a petition for review in the case described below. This means that Minnesota Litigator’s first prediction (that the Minnesota Court of Appeals’ decision would itself be appealed) was correct. We’ll see about the second prediction (that the appeal will be ultimately unsuccessful)…
Original post (May 2, 2013): Gordon Brown was 94 years old when he divorced his 55 year old wife, Judy Brown in March, 2010. At first glance, one might think that Gordon had a really awful divorce lawyer. As part of the divorce, Judy got $2,000,000 in assets. Gordon was left with a negative net worth of $8,500,000.
But if that seems a little fishy to you, you are not alone.
Carver County District Court Judge Kevin W. Eide, presiding over a debt collection action brought by Citizens State Bank Norwood Young America against Gordon Brown, decided that the transfer to Young Wife (Judgy Brown) was a fraudulent transfer devised to shield Grandpa Gordon’s assets from the bank. The Minnesota Court of Appeals affirmed that decision this week.
Gordon and Judy Brown retained former Minnesota Supreme Court Chief Justice Eric Magnuson for the appeal. This suggests (1) they have somehow managed to hold on to some cash (they do not seem likely pro bono clients); and (2) perhaps they had expected and anticipated the prospect of having to take their claim to Minnesota’s highest court.
Gordon and Judy Brown appear to have carefully structured this transfer with the help of able counsel, concealing none of it from anyone, and therefore, in their minds, the deal is inconsistent with a finding of “fraud.” Will they seek the highest authority to authorize their divorce as lawful “asset protection”? If they do, will they succeed?
Predictions: (1) Yes. (2) No.