Russian oligarch Dmitri Rybolovlev, whose company in 2008 bought a Palm Beach mansion for a record $95 million from Donald Trump, just set another record. A Swiss court this month ordered Dmitri pay his ex-wife, Elena, a stunning $4.5 billion. Dmitri now has the dubious distinction of being part of the costliest divorce in history.
The sum is an unheard-of amount. It also gives fresh life to efforts by Elena to lay claim to assets purchased around the globe by Rybolovlev companies or trusts during their marriage. Among the assets: Maison de L’Amitie, the oceanfront mansion at 515 N. County Road on Palm Beach.
“The Swiss court vindicated (Elena’s) position and shows the system works, no matter how rich you are,” said David Newman, an attorney with New York’s Day Pitney law firm. Newman is part of Elena’s legal team.
Dmitri Rybolovlev is ranked 147th on the Forbes list of billionaires, with an estimated fortune of $8.8 billion. He made his fortune through his former ownership of a large stake in Uralkali, a fertilizer company.
Dmitri Rybolovlev’s lawyer, Tetiana Bersheda, downplayed the Swiss judgment. In a statement, she said the judgment is subject to two appeals and is in no way final. “The whole case will continue for at least 10 more years,” Bersheda said.
Newman said he is confident Elena will win any appeal because the Swiss ruling is a well-crafted decision “and very descriptive…..(Dmitri) is not in the best position.” Lawyers will seek to enforce the judgment by pursuing assets in which Dmitri has an interest, Newman said.
When Rybolovlev bought the Palm Beach mansion six years ago, it was the most expensive sale of a U.S. single-family home. In 2005, Trump purchased the mansion for $41.35 million out of a bankruptcy filing by the home’s former owner, Abe Gosman, the late health care magnate. Then in July 2008, Trump flipped the house to County Road Property LLC.
At the time, Dmitri acknowledged the home’s ownership, saying, “This acquisition is simply an investment in real estate by one of the companies in which I have an interest.”
In December of 2008, Elena laid claim to the Palm Beach estate after filing for divorce from Dmitri. In her Palm Beach County Circuit Court filing, Elena said she was making the move because her husband “has a history of secreting and transferring assets in order to avoid his obligations.”
The couple, both 47, married in 1987 and have two daughters, one a minor.
The Palm Beach County filing was the first of many legal actions Elena took to claim ownership of properties purchased during the marriage. They include an $88 million New York apartment and a $20 million house in Hawaii, formerly owned by actor Will Smith.
But unlike the New York and Hawaii properties, the Palm Beach property initially was purchased in the form of an investment company and not a trust. It subsequently was transferred to a trust.
As Elena fought for the Palm Beach manse in Palm Beach County Circuit Court, Dmitri backpedaled on his ownership of it. In court papers filed in 2011, he said he had not purchased or managed any real estate in Florida for investment purposes, either directly or indirectly. (“Somebody paid me $100 million,” Trump coyly told this reporter at the time.)
Dmitri told French journalists the property was in trust “to secure the future of our two daughters.” He later acknowledged in a 2013 London deposition that he pays upkeep expenses on the property, according to Palm Beach County Circuit Court records: “The funds were transferred on my behalf to the trust.”
The trail of money from Dmitri to the trusts is important. Elena’s team will continue to work to show that Dmitri has an interest in the properties and controls the trusts, either directly or indirectly, Newman said.
With the Swiss court ruling in hand, “Elena has a tremendous amount of leverage,” Newman said.
Already, efforts continue in Palm Beach County Circuit Court to pin down Rybolovlev’s control of the Palm Beach property. Newman is waiting for a judge to rule on a request for a new deposition of Dmitri because Newman alleges the Russian was uncooperative during last year’s go-round.
But Dmitri’s team maintains Elena will have a difficult time enforcing the divorce judgment. In fact, a spokesman for Dmitri went so far as to call the divorce ruling “a win.”
Dmitri’s team says assets held in trusts for the children are out of Elena’s reach. Bersheda, Dmitri’s lawyer, noted that the the Swiss court ruling confirmed the trusts created by Dmitri, and the validity of the assets transferred to them.
If Elena is able to lay claim to the Palm Beach mansion, it’s unclear how much she would gain.
According to a 2012 article in the New York Times, the trustees overseeing the Palm Beach estate haven’t done anything with the house since Elena staked a claim in 2008.
The house may be iffy, but the land remains valuable, especially since the property has 475 feet of unobstructed oceanfront. For 2013, the Palm Beach County Property Appraiser appraised the six-acre land at $59.8 million. That’s up from a 2011 appraisal of $47.3 million for the land.
Lawsuit lobbed against legal eagles
Two married lawyers who live in Palm Beach Gardens are being sued by a family member who claims they failed to make a big payment on a $100,000 loan. These aren’t just any lawyers, however. They are Wendy Sartory-Link and husband Scott Link, two principals of the high-profile Ackerman Link & Sartory law firm in West Palm Beach.
In a lawsuit filed in March in Palm Beach County Circuit Court, Wendy’s stepmother, Candace Rae Sartory, alleges Wendy and David failed to make good on a loan’s $85,813 balloon payment. The loan, which dates to 2000, was made to the couple by Wendy’s late father, J. Lawrence Sartory. Sartory, formerly president of The Palm Beach Post’s parent company, Palm Beach Newspapers, died in October 2009.
The lawsuit comes at a time when the law firm is under scrutiny by insurance critics. Ackerman Link & Sartory was named coordinating counsel for sinkhole cases at state-run insurer Citizens in 2012. In January, it signed a $6.5 million contract to coordinate all claims lawsuits for up to four years. No law firm competitor came close to its $525-per-hour fees. But the firm has ties to a former Citizens president and ally of Gov. Rick Scott, according to a Palm Beach Post investigation.
Airing the dirty laundry of the Sartory-Link family via a lawsuit was unavoidable, insisted Candace’s lawyer, Dave Roy of West Palm Beach. He said attempts to settle the matter privately failed.
“It’s an unfortunate personal issue,” said Sartory-Link, who wasn’t happy talking about family matters.
But the lawyer in her was resolute. “She can’t win it,” Sartory-Link said of the lawsuit. “There is not a note or a balloon payment.”
Roy said a July 10, 2000, letter sent by Wendy to her dad, mentions the balloon payment, which was supposed to have been paid in April 2010.
The letter was discovered last year by Candace, Larry’s personal representative, according to the lawsuit.
“It is absolutely a contract,” Roy said.
The lawsuit said $76,935 now remains unpaid, and Candace Rae wants that amount in one lump sum.
Sartory-Link said after she borrowed the money from her father, she offered many times to pay back the loan in full. He declined, she said, preferring the income stream generated by the 7 interest on the loan.
Sartory-Link said she continues to pay her stepmother in installments of $665.30.
“I am morally obligated to pay her, and I have,” Sartory-Link said.
Alexandra Clough writes about the economy, real estate and the law.