The Reed Family

Please note: While this case study highlights select issues we helped the couple resolve, we assisted them in resolving all aspects of their divorce negotiations.

** Names and identifying details have been altered to maintain client confidentiality. **

A Tangled Web of Assets and Liabilities

The Reeds' success led to significant asset accumulation, including a Tribeca loft condo, a Catskills vacation home, and a commercial office building in lower Manhattan housing their printing company.

However, the office building was purchased using a home equity loan against their Tribeca condo, with a balloon payment due in two years.

This created a pressing dilemma: whether to sell the office building or the condo to satisfy the payment.

Both Kelly and Jason wanted to retain the Catskills home, to which they felt a strong emotional attachment due to years of family vacations spent there.

 

Divorce Coaching Improves Communication

Communication proved challenging for the Reeds. Kelly relied on logic and data, while Jason was more emotionally-driven.

Before addressing the substantive issues of their divorce, we enlisted our divorce coach, Cheryl, to work with each of them individually.

To enhance their communication, Cheryl introduced techniques for each spouse to interpret the other's tone and remarks more accurately, reducing personal reactivity and fostering mutual understanding.

She also highlighted the financial implications of failing to reach an agreement through mediation, emphasizing how potential litigation costs could be better allocated towards their children's education.

Additionally, Cheryl provided strategies to manage their interpersonal hostility, addressing its detrimental impact on their roles as parents and co-workers.

After working with Cheryl, Kelly and Jason entered negotiations more cordially, viewing each other as allies rather than adversaries.

They recognized the high personal and professional stakes and put aside differences to focus on what truly mattered.

 

Developing "What if" Scenarios

The Reeds' divorce coincided with the pandemic's end, creating uncertainties about Manhattan commercial real estate values, and the future of their business. The building they purchased 8 years prior, had not gone up in value.

To address these unknowns, I developed flexible "what if" scenarios, allowing some decisions to be made post-divorce within an agreed-upon framework.

 

Here are three examples:

The Office Building:

A scenario deferring the decision to keep or sell the building until the balloon payment was due, based on certain conditions.

Were the building to increase in value up to 109% of the purchase price, the couple agreed to refinance and retain it.

And were the building to increase in value 110% of the purchase price, or greater, they would sell it and either relocate their business, or retire.

 

The Tribeca Condo:

A two-year cohabitation agreement, after which they agreed to have the home appraised, and using that value, would discuss and decide who would buy out the other.

If they couldn't agree, the condo would be sold on the open market, with both free to bid.

 

The Catskills Residence:

A schedule allowing continued co-ownership and shared use.

The most desirable 20 weeks were divided as follows: eight weeks each for individual use, and four weeks for shared family time.

A process was included for negotiating other dates, with a tiebreaker system where in case of a conflict, they would take turns receiving their preferential date.

They agreed to co-own until their youngest child graduated high school, after which they could buy each other out or sell on the open market.

 

Mutually Beneficial Outcomes

This case shows how effective communication, creative problem-solving, and flexible arrangements can lead to mutually beneficial outcomes in complex, high asset divorce situations.

By helping them identify and focus on their shared interests – their children's well-being, their business's success, and their desire to avoid a protracted, contentious, and financially ruinous legal battle – with our guidance, the Reeds were able to navigate their divorce efficiently and cost-effectively, preserving both their personal and professional assets for the future.

Other Case Studies:

• Divorce Involving Employee or Owner of Equity-Backed Start-Ups
• Dual Income Professionals with Children
• Divorce after a Long-Term Marriage
• Business Owners
• Gray Divorce

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