Epic Palm Beach divorce starts Monday; will divide real estate empire

EXCLUSIVE: HANDELSMAN DIVORCE


UPDATE: Judge splits Palm Beach couple; now trial on real estate empire

The breakup of one of the biggest real estate empires in Palm Beach County, featuring some of the toniest shops on Worth Avenue, gets underway Monday in Palm Beach County Circuit Court.

The month-long trial that will unfold before Circuit Judge Scott Suskauer will turn on dueling claims of the type of double-dealing, plundering and lying that punctuates many business disputes.

But the complex case isn’t purely a business feud. It’s a divorce.

After nearly seven decades of marriage, 89-year-old Lucille “Lovey” Handelsman set the wheels in motion for the epic battle by deciding she doesn’t want to be married to her 90-year-old husband, Burt, any more.

Her decision, supported by the couple’s three adult children, put in play the $500 million-plus real estate fortune the Palm Beach couple began building in the 1950s from their kitchen table in Brooklyn, N.Y. Besides the Palm Beach shops, their real estate holdings reach from Key West to upstate New York, with restaurants in Delray Beach and office buildings in West Palm Beach.

While tired of Burt’s verbal abuse, Lovey claims it was infidelity that spurred her to act. She contends that Burt not only fell in love with another woman, but he conspired with his alleged paramour — Fort Lauderdale attorney Jane Rankin — to siphon assets that rightfully belonged to her, her children and grandchildren.

Burt disputes Lovey’s characterization of his relationship with the 62-year-old Rankin. But the longtime family legal advisor, who often vacationed with the Handelsmans along with her husband, now figures prominently in the divorce.

In November, for instance, Suskauer ruled that Burt enlisted Rankin’s help to commit a “fraud on the court” by lying about the so-called discovery of a falsified document that Burt tried to use to strip his children of control of vast swaths of the empire.

“Burt now admits that Rankin’s portion of their coordinated story was materially inaccurate … (reinforcing) the court’s conclusion that the entire tale was an intentional fraud on the court,” Suskauer wrote in a blistering opinion.

Frustrated by the nonstop warfare, Suskauer for months has pleaded with the couple and their children to resolve their differences and divide their vast holdings without his help. But little progress has been made. In court papers filed last week, the venom was palpable.

“Burt is a classic megalomaniac,” wrote attorney Jeff Fisher, who is representing the couple’s children in their fight to make sure their father has no claim to property they now control from offices in White Plains, N.Y. “The adult children hope to see Burt crumble,” countered attorney Alan Kluger, who represents Burt.

While Lovey’s attorney, Joel Weissman, also had choice words for Burt, he is asking Suskauer on the opening day of trial to declare the marriage irretrievably broken. Then, he said, Suskauer can spend the next four weeks hearing testimony from real estate experts, accountants and appraisers to help him decide who should get what property, along with doling out personal items, including the couple’s much-fought-over shaving mug collection, valued at $1 million.

Lovey, who is crippled by arthritis and confined to a wheelchair, is generally in good health. But, at her age, time is of the essence, Weissman said. If the marriage dies before Lovey, under Florida law, she would be entitled to 50 percent of the assets, which she plans to pass on to her children and grandchildren. If Lovey dies before Suskauer signs off on the divorce, her share could fall to 30 percent, Weissman has said.

“The wife implores the court … to pronounce the parties’ marriage is irretrievably broken in order to assure the Wife her equitable distribution will not be jeopardized by any untimely death or illness,” Weissman wrote, repeating a request Suskauer has rejected before.

The term “equitable distribution” is the legal standard for how assets are divided in any divorce. But in this one, the attorneys and their clients are in vast disagreement about what it means. Further, each accuses the other of low-balling the value of the property they want in a ploy to get more than they deserve. 

The Handelsmans’ Palm Beach County properties

Here are the locations of Burt and Lucille ‘Lovey’ Handelsman’s holdings in Palm Beach County, according to the Property Appraiser’s Jan. 1, 2017 valuation. They are valued at $160 million. (Zoom out to see the Handelsmans’ other properties in Lantana, West Palm Beach and Delray Beach.)

All sides agree that even if they all could agree on the values of scores of pieces of property, division will be complicated because in many cases ownership is split among the children, Lovey, Burt and others. The children and Lovey have insisted they won’t own property with Burt. There also are mortgages and other legal entanglements that have to be sorted out.

Fisher said an accountant Lovey has hired figured out a way to divide the property so she would end up with $69 million worth of real estate, Burt would end up with $68 million and the children would control the remaining property, which they have managed for years.

Since Burt long ago moved his office to Worth Avenue and focuses on the real estate jewels that are rented to various high-end retailers, such as Giorgio’s, Brooks Brothers, Ralph Lauren and Jimmy Choo, he could remain in control of most of that property, Fisher suggested. The children, meanwhile, are more interested in continuing their oversight of property in New York state, Delray Beach, West Palm Beach and Key West, where they own the property that is home to the famous Hog’s Breath Saloon.

Lovey, Weissman said, should also be awarded the couple’s three-room apartment above shops on Worth Avenue, the family home in White Plains, N.Y., and a vacation home in the Catskills.

Contesting Lovey’s experts with experts of his own, Burt opposes many of the proposed land swaps. He has already filed separate lawsuits against his children, claiming they stole property from him.

Noting that it will be difficult to negotiate a 50-50 split, Kluger said Suskauer should keep in mind that Burt was the mastermind of the empire so should reap more reward — a contention both Fisher and Weissman vehemently dispute.

In making their cases, both sides turned to sports metaphors in last week’s filings.

To counter Burt’s claims that he built the real estate empire alone, Lovey’s lawyer invoked famed University of Alabama football coach Nick Saban and Miami Heat basketball coach Eric Spoelstra.

“If Nick Saban or Eric Spoelstra claimed that a championship victory was solely the result of their great coaching and had nothing to do with their ‘team,’ they would be the subject of scorn and ridicule and probably fired,” Fisher wrote. “Burt Handelsman shamelessly claims that the entire empire is his creation giving no credit to the decades of work by his wife, children and in-laws.”

Burt’s lawyer compared his client to Dorando Pietri, an obscure Italian runner who overcame paralyzing fatigue to win the marathon in the 1908 London Olympics.

“Like Dorando, Burt has shocked the world as well. … Like Dorando, Burt was unknown in his sector, but Burt was determined to race to victory,” Kluger wrote. “Like Dorando, Burt deserves to finish with dignity and grace.”

But in his lengthy description of Dorando’s historic achievement, Kluger failed to mention one thing: Dorando was ultimately stripped of his medal because he was assisted across the finish line.



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