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Citadel founder begins divorce proceedings

Maryland investors may be interested in the divorce proceedings recently initiated by the founder of Citadel LLC, a hedge fund reportedly with assets of approximately $20 billion. The founder filed for divorce from his wife of 11 years allegedly without his wife's knowledge, though the couple had been separated for a year. The wife of the founder, herself a former hedge fund manager, signed a prenuptial agreement in 2003 agreeing not to include Citadel in the division of property in the event of a divorce.

This is somewhat typical in cases of high-asset divorce, especially because this was a second marriage for the company founder. His personal net worth is $5.6 billion, and the couple also has an extensive art collection and multiple luxury homes, so these assets may be divided. In general, in the event of divorce, one party is often given a sum of money in exchange for waiving interest in a preexisting asset. It's unclear if the prenuptial had any such stipulation.

However, it's important to note that, while a prenuptial agreement may seem bulletproof, it isn't a guarantee that protected assets won't be targeted by the lawyers for one of the spouses. In some cases, lawyers may be able to argue that an agreement was signed under duress or was not properly drawn up. Lawyers for the wife of the founder have not commented on whether they seek to go after Citadel assets.

For those who are about to undergo high-asset divorce, it may be wise to prepare for a lengthy property division phase. When substantial assets are at stake, lawyers for a former spouse may be more inclined to go after pre-existing wealth. Finding and consulting with a divorce lawyer may be helpful for those wishing to protect assets.

Source: Bloomberg, "Citadel’s Griffin Seeks Divorce After 11-Year Marriage", Andrew Harris, Saijel Kishan and Katherine Burton, July 24, 2014

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