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War of the Roses: LA Style

What happens when two super-rich LA attorneys divorce? Super-drama, of course. The Feldstein-Gregora case features claims of envelopes stuffed with cash, rampant paranoia, secret overseas funds and millions of missing dollars.

Hydee Feldstein is a former partner at mega-firm Sullivan & Cromwell. Peter Gregora is "partner emeritus" (usually emeritus means a retired attorney with many wealthy friends) at Irell & Manella. In 2013, Husband (who handled the family finances) filed for divorces in LA after 27 years of marriage.

Wife claims Husband stashed thousands in cash in envelopes throughout the house and also stashed almost twenty million dollars in a secret equity fund in (of course) The Grand Duchy of Luxembourg. Husband claims that Wife is paranoid and had previously accused her former employers of tapping her phone, putting camera's in her home and (of course) plotting to kill her. Apparently, neither party has produced evidence yet to support their claims.

Wife claims that a family friend got her to invest in a Versa Capital funds in 2007, starting with $250,000. Wife claims that 19.25 million more was then invested without her knowledge while the Fund shows an allocation of only 25K in funds to her.

The parties appear to have marital assets of about 15 million plus a 7.25 million dollar home plus the hidden money (if any such exists). They appear determined to use all of that money to fight each other, as their legal bills are reported to exceed 4.5 million dollars before trial. They each blame the other for the outrageous legal bills. At this rate, we are looking at a War of the Roses style mutual destruction. Then again, Wife is also suing Versa Capital Management for the missing 19.5 million for, essentially, laundering marital money through an investment fund.

They can't both be right. So, who is telling the truth? The truth is that you and I cannot know from a distance what really happened. Buuuuut, my guess is that Wife's story sounds fishy.

I have seen many bright people (especially women) fail to see spousal problems that appear obvious from the outside. But a top attorney like Wife should have seen 20 million get stashed away overseas. That is almost half of their substantial wealth.

The claim about hiding money in envelopes around the house also makes little sense. It would be a remarkably stupid way to hide money, but could be perfect paranoia. Filing a separate lawsuit for 19.5 million in fund losses also sounds a bit extreme. Then again, you never know. You might think that time will tell, but sometimes cases end ambiguously.

What I do know is that litigating a divorce to the bitter end is stupid for anybody, regardless of the size of the marital estate. Which is why you should want a divorce attorney who is really good at settling cases favorably and only litigates as a last resort.