Family Case (Tel Aviv) 31661-07-16 Anonymous v. Anonymous

What is the law of a property lawsuit filed by a woman against her spouse and against a company that, according to him, is under his control, when according to the wife, all the family capital estimated at huge sums - including a spacious residence in a prestigious community valued at tens of millions of dollars - is under sophisticated tax structures, trusts and foreign corporations? This is the main question on the agenda.

 [Note - the names in this judgment are pseudonyms, including the names of the corporations and trusts]

1. The facts that are relevant to the matter:
2. The plaintiff and defendant 1 (hereinafter: the woman, the man and collectively: the parties) met in the 1990s when they lived in the United States and worked together in an American bank. At the time of their acquaintance, the woman was only an American citizen, while the man held Israeli, German and American citizenship.  The parties were married on May 21, 1997, in a civil ceremony in the State of New York, and on June 12, 1997, they were also married in a religious-Jewish ceremony.  The relationship between the parties resulted in the birth of four children, all of whom are now adults.
3. The woman holds a bachelor's degree from Harvard University, but has not been employed for about two decades. The man holds a bachelor's degree in applied mathematics and economics and an MBA from Harvard University, and is considered a financial prodigy.  During their lives together, the man was employed by the world's most prestigious firms in the field of capital markets and global investments, and served in key positions in the field of finance, thanks to which he earned huge salaries.
4. According to the woman, in 2000 the relationship between the parties ran into a crisis that led her to file for divorce on the grounds of the man's addiction to stimulant drugs, deterioration in his behavior, aggression and violence towards the woman. The parties overcame the crisis and the woman withdrew her claim for divorce and later the parties moved to London and in 2003 the family moved temporarily to Israel.
5. In 2005, the man and other defendants were indicted in the United States for fraud, tax evasion and misrepresentation to the IRS and the U.S. Treasury Department, as part of an unprecedented tax fraud scandal in which about $2.5 billion in tax money was concealed from the IRS through complex corporate structures that served as tax havens.  The man pleaded guilty to the offenses attributed to him as part of a plea bargain and was fined $10 million.  In 2008, the parties moved to Israel permanently, while the woman renounced her American citizenship and underwent a Conservative conversion.
6. Moving on to the dispute between the parties, the family lives in a prestigious standard of living attributed to the top millennium (including fancy residences, luxury cars, an extensive array of service providers and luxurious vacationers), all in light of the man's thriving business in the field of finance in Israel and abroad. Thus, from the time the family returned to Israel until the outbreak of the dispute between the parties, the family lived in a house in a prestigious settlement with a built-up area of 1,600 square meters with an elevator, underfloor heating, three kitchens, a gym, a spa with a wet and dry sauna, a swimming pool, a tennis court, and more (hereinafter: the residence) (more regarding the standard of living of the parties, see paragraph 2 of the Supreme Court's decision in the case of the parties in LLC 1452/19, Published in Nevo 25.2.2019).
7. The residence was registered by defendant 2, Alabama, a foreign company incorporated in the British Virgin Islands and which was allegedly established by a trust established in Guernsey Island, called Alaska (hereinafter respectively: the defendant/Alabama, Alaska - respectively). The woman claims that the ownership of the residence belongs to the parties, and that it was built on a plot purchased by the parties in 2004, but was registered in the defendant's ownership due to the man's considerations.  Therefore, the woman petitioned in this lawsuit to add Alabama as a defendant, and her request was granted (see decision of November 18, 2018).
8. In 2016, a dispute arose in the couple's relationship , which led to their separation and the filing of claims by the wife, including: a claim for child support and a wife, in which a judgment was given on June 26, 2019, and alimony was awarded to the wife and the children of the parties in the sum of ILS 60,000 (hereinafter: the alimony judgment) and an appeal to the District Court, which was rejected on June 7, 2020 in Family Appeal (Tel Aviv) 14787-09-19; A claim for 'custody' in a family case 31728-07-16 in which a judgment was given for the wife's 'custody' of the children on June 30, 2019; a claim for property matters in a family case 31661-07-16 is the claim in the heading, and a claim for restitution of movables in a family case 32151-07-16.
9. From 2016 until today, many lawsuits have been filed and proceedings have been conducted between the parties, so that to date, the number of cases related to the parties stands at 18 in this court; 7 cases in the Tel Aviv District Court, as well as additional cases filed in applications for leave to appeal to the Supreme Court. It should also be said that in the case under the heading alone, close to 500 decisions (!) have been made so far, including substantial and weighty decisions in view of their importance to this proceeding, some of which will be presented below:
10. Decision of July 19, 2016 rejecting the woman's request for an Anton Piller order and to search the man's computer and copy material therefrom;
11. Decision of April 30, 2017 regarding the removal of attorney-client privilege between the man and his attorneys;

• Decision of September 20, 2018 rejecting a request to revoke an invention permit outside the scope of the statement of claim and the request to add the defendant to the defendant;

1. a decision of November 18, 2018 regarding the addition of the defendant as a party to the proceeding;
2. Decision of April 4, 2019 for temporary relief regarding the residence;
3. a decision dated March 31, 2020 regarding a demand to remove appendices from the plaintiff's main testimony affidavit, which were allegedly obtained by breaking into the man's e-mail box;

• Decision of June 13, 2023 confirming the receipt of the aforementioned documents for the wife's evidence (see more below).

9. In the lawsuit in the headline, no less than 20 hearings were held before me, and the minutes of the hearing numbered over 1,500 pages. The plaintiff's summaries of arguments are 110 pages long; The summaries of the defendant's arguments hold 84 pages and the summaries of the defendant's arguments hold 66 pages, all accompanied by extensive exhibit files and not including reply summaries.
10. This lawsuit concerns the distribution of resources of economic value at the time of the termination of the marital relationship between the parties. In addition to the question of ownership of the residence, the main dispute relates to the scope of the parties' joint property that is subject to division.  According to the woman, the man acted in accordance with his knowledge and expertise in creating complex trust structures in order to conceal joint assets from her eyes, while the man claims that all the joint property of the parties is actually in the hands of the woman and that there is nothing in her claims regarding the smuggling of assets by him.
11. In the framework of the lawsuit before me, the woman petitioned for declaratory relief, according to which she is entitled to half of all the rights of the man and Alabama (whether such rights are registered in a different appeal or a different appeal by other entities such as trusts) that were accumulated during the marriage of the parties, including half of the rights in the residence. In addition, the woman petitioned for the dissolution of the partnership in the residence and for the balance of the assets of her and the man's economic reserve in view of her claim of disparities in earning capacity between them, whether by way of a one-time payment, periodic payments or an unequal division (in her favor) of the parties' tangible property.
12. As stated above, on January 3, 2023, the man petitioned to delete the woman's summaries and alternatively to remove the appendices attached to her from the file, on the grounds that these documents were obtained fraudulently using prohibited means that constitute a violation of the man's privacy. On June 13, 2023, my decision was given ordering the rejection of the man's application and the receipt of the documents due to their cumulative and essential weight for the assessment of the property complex.  Thus, it was recorded in paragraph 21 of the decision:

"The man knew very well, and for years, that the woman had these and other documents.  The man had all the time in the world to relate to his assets and economic activity, while attaching documents and proving his claims, as well as his good faith.  The man, for his own reasons, chose a different way of conducting his trial, and this is his full right, and now he must bear the consequences, one of which is the acceptance of this request of the woman" (see also the rest of my reasons at length in the said decision; Published in Nevo, June 13, 2023).