When CEOs Divorce
When it’s time to dissolve your marital merger, the dean of Dallas family lawyers says, discretion and delegating are key.
Executives are fond of using matrimonial metaphors to describe the expansions and contractions of corporate America. A successful merger is often likened to a marriage, while a dissolution or other split-up is frequently compared to a divorce. But when it comes to actual divorces, a CEO or successful entrepreneur is often as unprepared and emotionally adrift as the average individual. That’s why so many of them turn to lawyers like Ike Vanden Eykel of the high-powered Dallas family law boutique Koons, Fuller, Vanden Eykel & Robertson.
From wealthy CEOs whose divorces involve complex business valuations and resemble the breakup of a small conglomerate, to NFL or NBA stars in need of prenuptial agreements, Vanden Eykel has handled the gamut of family law matters for high net worth individuals. His typical client is a CEO or spouse of a CEO, or the partner or spouse of a partner in a major law firm or medical practice; cases involving multimillion-dollar estates are the norm. At 24 lawyers, Koons Fuller is actually one of the largest law firms in the country focused exclusively on matrimonial law. And, with tony offices on Cedar Springs close to the Park Cities, plus additional locations in Southlake, Denton, and West Plano, the firm has certainly taken a Willie Sutton approach of going where the money is.
But, what makes the rich and famous in marital strife beat a path to Ike Vanden Eykel’s door? One factor may be his approach to these types of cases. “I come from a business background,” Vanden Eykel says. “I gravitated into this because I was representing businesspeople. I understand business, stocks, oil and gas. I bring a level of understanding that puts CEOs or their spouses a little more at ease.”
After graduating from Baylor Law School in 1973, Vanden Eykel joined a Dallas firm that rarely handled divorces, cutting his teeth instead on commercial litigation and antitrust matters. When he successfully tried a big divorce case that landed at the firm, Vanden Eykel had found his niche. His business-savvy approach to handling family law matters is evident in the team he assembles. With cases involving valuations of everything from a closely held corporation to private art collections, it’s not uncommon for Vanden Eykel’s team to include securities lawyers, tax attorneys, art appraisers, and even handwriting experts. A case may call for forensic psychologists or criminal law specialists or, given the globe-trotting nature of the firm’s clientele, international lawyers. Even after a case is technically over, Vanden Eykel may be tapped to provide wealth managers and probate or estate-planning specialists to protect a client’s interests.
“The team can be rather expensive,” he confesses, but “successful businesspeople need and frankly expect this.”
Yet another factor that lures the wealthy and famous to Ike Vanden Eykel is his discretion. Whether it’s the potential business fallout that can accompany news of a divorce, security concerns, or even the client’s own ego, Vanden Eykel is zealous about protecting his clients’ privacy. “We have a frank discussion with anyone new on the team about the need for discretion,” he says. This can include not using the client’s real name on the firm’s calendar and other internal tracking, as well as meeting at a location other than the firm’s main office.
To illustrate the need for such delicacy, Vanden Eykel points to an example drawn from the divorce of an entrepreneur in a computer software-related field. If the divorce hadn’t been handled quickly, quietly, and discreetly, he notes, venture capitalists averse to the risks associated with marital discord “would have put a $4 billion investment in jeopardy.” As Vanden Eykel puts it, “The clients that come to see me are the ones that want to keep their names out of the paper.”
Hit Man Hired
Not all of Vanden Eykel’s high-profile clients manage to stay under the radar. In 1989, he succeeded in getting $61 million in property awarded to Josephine Cauble in a bitter divorce from former wealthy rancher Rex Cauble. And Vanden Eykel’s representation of Linda Edelman, estranged wife of Dallas developer Robert Edelman, inspired the 1993 TV movie Dead Before Dawn (with Cheryl Ladd portraying Linda). Among other things, the film dramatized the FBI sting operation in which Mr. Edelman tried to hire a hit man so that he would get sole custody of their two children.
For CEOs who find themselves facing a divorce, Vanden Eykel offers some sage advice for weathering the storm. “Take a giant, deep breath,” he urges. “Get a lawyer you trust, and use what God put between your ears. Try to think of a solution that won’t burn the whole forest down.”
Vanden Eykel finds that just as the sort of drive and Type A mentality that make an executive successful in business can lead to marital disharmony, traits common to CEOs can also help them through a divorce. “The ability to successfully delegate to various aspects of what is, essentially, a business dissolution” is key, he points out, as is “the ability to listen; most successful people are very good listeners.” According to Vanden Eykel, executives in such situations should exercise the ability to choose and then rely on their choice of counsel, trusting in their lawyer to “make their trip through the hot coals a bit more pleasant.”
Of course, the best course of action is to avoid divorce altogether. The 59 year-old family lawyer—whose second marriage has lasted more than 30 years and counting—urges CEOs to involve their spouses in their business, saying, “You wouldn’t [shut out] a business partner; why would you do this to a life partner?”
As for executive spouses, Vanden Eykel recommends that they “stay involved, stay informed, and stay interested” in the business side of things.
Vanden Eykel counsels against a “scorched-earth” policy when it comes to dividing up marital property. In cases involving navigating the voting agreements, redemption agreements, and stock valuations of privately held companies, he says, it’s critical “not to kill the golden goose.” The vast majority of cases settle at mediation, and Vanden Eykel describes the ideal outcome as one where “everyone is able to leave with dignity.” Still, it’s sometimes necessary to take a case all the way to trial, especially when there are vast discrepancies between both sides’ respective appraisals of a company’s value. Vanden Eykel chuckles as he points out, “You will never be wealthier than the day before mediation when you see the report of the expert hired by the other side.”
Even with the currently dismal economic forecast, the silver-haired veteran of the divorce wars says business is up, due in part, perhaps, to the fact that at the end of the day, wealthy couples aren’t immune to the stresses that affect any marriage. “Spray away the excess layer of money, and you expose the rocky surface beneath,” Vanden Eykel says. Yet even after 36 years of witnessing the best and worst in human nature, the lawyer remains a romantic at heart, with a fondness for stories where parties have gotten back together. “I got a call today from a CEO client who’s going to remarry,” he says. “I represented him 14 years ago.”
John G. Browning is a partner in the Dallas office of Gordon & Rees, where he handles a wide variety of litigation representing businesses. He can be contacted at email@example.com.