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Episode 110 - Billion Dollar Divorce - Breaking Down the Jeff Bezos Divorce

Episode 110 - Billion Dollar Divorce - Breaking Down the Jeff Bezos Divorce Image

02/05/2019 10:43 am

Jeff Bezos divorce could be one of the most complicated divorces in American History. Even with the parties getting along and trying to work out something that both feel is fair, the costs will be enormous. And, unlike most divorces, Jeff's ownership interest in Amazon complicates this divorce. At 16.3%, he is the largest single shareholder in Amazon. This means his divorce will impact the other shareholders' interest in Amazon. Amazon is currently one of the largest companies in the world based on its market value. How do you go about figuring up what is fair? How does MacKenzie Bezos get her share to become the wealthiest woman in the world? How do you value Jeff Bezos' new company, Blue Origin, that could have more potential than Amazon? Why will it be so expensive? We attempt to answer these questions and more in this fascinating episode.

Transcript

Leh Meriwether:             Welcome everyone. I'm Leh Meriwether, and with me is Todd Orston. Todd and I are partners at the law firm of Meriwether & Tharp. You're listening to Meriwether & Tharp Radio on The New Talk 106.7. Here you'll learn about divorce, family law, tips on how to save your marriage if it's in the middle of a crisis, and from time to time even tips on how to take your marriage to the next level. If you want to read more about us you can always check us online at Atlanta Divorce Team.com. I got a question for you today, Todd.

Todd Orston:                   I can't wait.

Leh Meriwether:             All right. Have you ever heard of a divorce where someone could be happy with receiving just 1% of the marital estate?

Todd Orston:                   Does that person have some mental deficiency or some ...? 1%?

Leh Meriwether:             1%.

Todd Orston:                   In all my years, I don't think I have had a client who would be happy with 1% of the marital estate.

Leh Meriwether:             I have one word, one name, Bezos.

Todd Orston:                   Bezos.

Leh Meriwether:             Bezos.

Todd Orston:                   Yeah. What would that 1% amount to?

Leh Meriwether:             So, as people may have heard, he's getting a divorce, and his estate is worth an estimated $137 billion.

Todd Orston:                   How do you live? How do you survive?

Leh Meriwether:             She would receive $1.37 billion if she only got 1%. That's more than winning the lottery.

Todd Orston:                   I may not know much about divorce, but I'm going to go out on a limb and say she's probably asking for more than 1%.

Leh Meriwether:             I would think so.

Todd Orston:                   All right.

Leh Meriwether:             If she got 50%, she would be the wealthiest woman in the world. It's hard to imagine.

Todd Orston:                   Seriously, I don't even know how I can continue with the show. I'm going to spend the entire show just daydreaming.

Leh Meriwether:             About what you would do with just a billion dollars?

Todd Orston:                   That's right. That's right. So, why do we bring this up, though?

Leh Meriwether:             Because we're going to break down this divorce. Not that I want anybody to divorce, but put that aside for a moment. Their divorce is extremely fascinating because it's so complex. There are so many different layers to the divorce that we want to talk about. We're assuming this divorce is amicable because when they both came out on social media they said that the plan is to be fair, amicable and fair to each other, and to their kids. So the challenge-

Todd Orston:                   But that doesn't change it from a complex, incredibly complex case to a non-complex case. It doesn't make it simple just because they're amicable.

Leh Meriwether:             Right.

Todd Orston:                   Which is what we want for anyone and everyone going through a divorce doesn't mean that it's going to simplify the issues that need to be resolved in order to obtain that divorce.

Leh Meriwether:             I could easily see, and we're going to break down how we came up to this number, but I could easily see this divorce even if they're both saying, hey, you know what? We want to do what's fair still costing a million dollars in legal fees and other costs.

Todd Orston:                   Which to normal mortals that is crazy talk. That is insane. How could you spend that kind of money? We are attorneys. We have handled cases where the clients were worth millions, and they have not spent nearly a million dollars, but still they've spent a lot of money, and even we are like that is crazy, a million dollars in fees, but when you think about it. First of all, how much, I mean, one million is what percentage of the total value?

Leh Meriwether:             I may be off on a zero or two here, but it's something like .00004% of the entire marital estate.

Todd Orston:                   Anyone checking math let's just assume that's not right. Okay?

Leh Meriwether:             I'm not some super genius.

Todd Orston:                   You don't have to write in and say, yeah, you missed eight zeros, or whatever, but-

Leh Meriwether:             It's a tiny fraction.

Todd Orston:                   It's a tiny fraction, and what we're going to talk about, jokes aside, is when we talk about a lot of fees in a case that really should be amicable because of the complexity they're going to need to do a lot of things that in a lot of normal divorces you're not going to have to do.

Leh Meriwether:             Right.

Todd Orston:                   Property valuations, business valuations. There's going to have to be a lot of things, tax consequences that have to be taken into account. Their numerous companies that would have to be valuated. So all of these things are going to require experts to step in. Both of them may need their own experts. That's going to cost a lot of money, but to be honest, I don't know how you avoid that.

Leh Meriwether:             Yeah, we're going to break that. Let's narrow this down. There's four core areas of just most divorce cases. There's child custody, child support, alimony, and division of property because this case, I understand, is going to be in the state of Washington. We're going to actually talk about the standard at which they break up or divide up a marital estate. So let's eliminate child custody. With that kind of wealth here are two good parents, they're both on the same page. I seriously doubt there's going to be very much money spent on custody.

Leh Meriwether:             The two of them are going to work out something together. Gosh, they have so much money they probably have multiple nannies to deal with transfer of the children back and forth. I really don't see that as an issue. Maybe a few thousand bucks just because of the nature of what they do their parenting plan should not be difficult. So let's put that aside. Let's say both parties walked away with 50%. There's not really a need for alimony. If you have $43 billion, and the two of you are the some of the wealthiest people in the world there's no need for alimony.

Todd Orston:                   Yeah, because alimony is need-based meaning the party who's asking for it has to say that without the financial assistance of the other party I won't be able to make ends meet.

Leh Meriwether:             Right.

Todd Orston:                   I won't be able to live whatever my lifestyle was that I enjoyed. There are numerous arguments that you can make, and different arguments in different jurisdictions that can be made, but you have to show a need in the most basic level. When you are going to be receiving more than likely billions of dollars it's very hard to say, well, I need to buy a space shuttle, and a cruise liner.

Leh Meriwether:             Well, actually, that could be addressed when we get to one of the companies, Blue Origin.

Todd Orston:                   That's right. So, she's not going to be able to prove that she has a need.

Leh Meriwether:             Right. So, let's take that off the board. Now what we have left is child support. That's really interesting because the law requires that child support at least here in Georgia. I have not looked at Washington's law on child support, but most of them are very similar as far as there's got to be a child support payment. I would imagine the two of them just going to come up because neither of them really need. If you have billions of dollars you don't really need child support.

Todd Orston:                   Yeah, and child support in Georgia there's a formula. It doesn't matter at a certain point it caps out. All right?

Leh Meriwether:             Yeah.

Todd Orston:                   But, nonetheless, it doesn't matter what number you throw in there. Basically, the children and their needs are going to be met. Basically, they're not going to have to even break a sweat thinking about whatever money is transferred in the form of child support.

Leh Meriwether:             Right.

Todd Orston:                   So let's say he does pay child support whether he pays $1,000 a month or $50,000 a month it's not even worth him worrying about it because that's taking up more effort than it ...

Leh Meriwether:             Yeah.

Todd Orston:                   He's making so much on interest on his investments, but the bottom line is there will be some amount of child support ordered pursuant to the law in that state it just depends.

Leh Meriwether:             I don't see that really as being a big fight.

Todd Orston:                   It should not be a big fight.

Leh Meriwether:             Now we've seen cases, actually, we talked about on the radio a case where somebody wanted their child support to go up from $20,000 a month to $50,000 a month, but that person really didn't have very much money.

Todd Orston:                   Yeah, I mean, a lot of those situations were different because ... Or at least some of them were different because the other party let's say-

Leh Meriwether:             It was Britney Spears.

Todd Orston:                   They were never married, right. So in that case maybe they were married, but the other party, Britney, made so much more money.

Leh Meriwether:             Yeah.

Todd Orston:                   K-Fed was asking for a ridiculous amount that if you ask me my opinion, my opinion in that show was it goes so far beyond what is necessary to take care of a child.

Leh Meriwether:             It seemed a little excessive. So that's probably not going to be. So now we've boiled that child support's not going to be an issue. So now we've boiled it down to the division of the assets. Now Washington is considered a community property state. A lot of people when they hear that term they think, oh, that means everything's 50-50, but when you read the statute that's actually not what it says. The statute says that the court can divide the marital assets in a just and equitable fashion. This is not a direct quote, but I'm pulling from it, in a just and equitable fashion after considering the nature and extent of the community property. So that's what we call marital property they call community property. The nature and the extent of the separate property that what you had before the divorce or perhaps an inheritance the duration of the marriage. So in everything in this case they pretty much accumulated during the marriage, and then the economic circumstances of each spouse.

Leh Meriwether:             I mean, I suppose he could try to argue, well, judge if you just give her 1% she's still going to be worth $1.37 billion, but the court would look at I would imagine she actually contributed a lot to this from what I understand. I mean, obviously, we're not the lawyers on the case just did a little bit of research. She's a smart woman by herself. I mean, she's an award-winning novelist. She worked at the New York hedge fund with him that's where she met him. She helped start Amazon. She actually worked in the accounting department when it started. Gosh, she has a bunch more. We're going to get into the other things that she's involved with as well, along with how do you go about dividing up such a large estate?

Leh Meriwether:             Welcome everyone. I'm Leh Meriwether, and with me is Todd Orston. Todd and I are partners at the law firm of Meriwether & Tharp. You're listening to Meriwether & Tharp Radio on the New Talk 106.7. If you want to read more about us you can always check us out online at Atlanta Divorce Team.com.

Leh Meriwether:             Today, we are talking about a very fascinating, complicated divorce, at least that's what it appears is the Bezos divorce. They announced recently that they are getting a divorce. In the last segment we broke down that we really didn't see the big cost coming out of three of the four core areas of family law. We didn't really see a problem with child support, alimony, or custody. That's something that they'll probably be able to work out fairly quick. It is the division of their assets and liabilities they accumulate during the marriage that makes it so interesting. We're going to explain why it's so complicated, why it's so costly in the next few segments. Let's start with what we ... Obviously, we're not the lawyers so we don't know his entire marital estate just from what's out there in the media. Obviously, he is the largest single shareholder of Amazon. He owns 16.-

Todd Orston:                   I'm sorry. What is that? I've heard of it, but, yeah, yeah.

Leh Meriwether:             Yeah, largest single shareholder of Amazon at 16.3%. We'll talk a little bit about why that actually really complicates the divorce. That is probably the largest, not probably, I think, it is the largest single asset in their marriage, but they have so many other things. He owns a company called ... We'll talk about this, too, in a minute, but Blue Origin. That has the potential of being worth even more than Amazon one day. We've got a lot of real estate we understand. He owns hundreds, or they own hundreds of acres. I believe he bought The Washington Post, which has a value of something like $250 million just that asset alone. I'm sure there's other assets they've got we just don't know about.

Todd Orston:                   Yeah. I mean, when you look at any kind of a divorce action one of the first things that we deal with when dealing with division of property identify the types of assets. So, you've already talked about a lot of it. We're going to be looking at bank accounts I'm sure they have them, savings accounts there might be some. There might be some trusts that have been created. We're going to have to deal with those. 529, some kind of education accounts, although, when they have that kind of money maybe they haven't done it because they don't need any tax benefits there.

Leh Meriwether:             They'll just sell some stock.

Todd Orston:                   Yeah, right, exactly. Investment accounts that might get a little more complex, but then we have to deal with the division of real property meaning real estate and businesses. Not business, but businesses, and we're not talking about a mom-and-pop hardware store.

Leh Meriwether:             Right.

Todd Orston:                   We're talking about Amazon, which has basically changed the world in terms of the service that it provides. We're not talking about a thousand dollar business, even a million dollar business. We are talking about a multi-billion dollar business.

Leh Meriwether:             Did it break a trillion value? I can't remember.

Todd Orston:                   I'm not sure.

Leh Meriwether:             I thought I heard them say it broke the cap of Apple.

Todd Orston:                   Yeah, so the bottom line is we're talking about assets that are so valuable. All right. It's not as simple as saying, okay, well, there's a house and there's a lake house. One of you it's easy the value here is this and that has a different value. You take the house. I'll take the lake house.

Leh Meriwether:             So let's do some quick math just to give people an idea just how let's talk about real estate. I understand they own hundreds of acres of real estate across the country. I could have heard that wrong, but that's my understanding. Let's say for just hypothetical sake they own 100 different pieces of property, okay? So if they say, well, we want this to be fair, but we're really not sure what all these pieces of property are worth today. We bought some of them years ago. Well, to be fair you'd have somebody go out and appraise them. Well, let's just say the appraisals were 500 bucks apiece.

Todd Orston:                   Which up there could be more, could be $1,000 a piece. I'm not sure.

Leh Meriwether:             If it's commercial it could be $5,000.

Todd Orston:                   Yeah, that's right.

Leh Meriwether:             But let's say it was 500, so 500 times 100 you're now $50,000.

Todd Orston:                   That's before any negotiations have taken place.

Leh Meriwether:             Right.

Todd Orston:                   That's just to get to a point where you have the information necessary meaning the values that you can start negotiating. Oh, and by the way, both parties have the right to have their own valuations done.

Leh Meriwether:             Right.

Todd Orston:                   So there are cases where parties are trying to be amicable, and they're trying to work together and they say, okay, for purposes of our negotiations let's agree to hire one person.

Leh Meriwether:             Appraiser.

Todd Orston:                   One appraiser to do the valuation, and we'll both agree to accept the values, but that doesn't always happen.

Leh Meriwether:             Right.

Todd Orston:                   Because, sometimes, if you anticipate a difference of opinion wife might say, "I want my own valuator to go and value the property because if I have to go to court I want that person to be my expert to talk about what the value is." The husband says, "Well, I want my person to be my expert if we have to go to court." So now what was $50,000 might be $100,000.

Leh Meriwether:             If it was 150,000 just double it.

Todd Orston:                   That's right. So we could be 100 to 200 plus thousand dollars just in valuation expense. Again, that doesn't mean you now have it divided. You just are now at a point where you can have an educated conversation about division of those assets because you can say, okay, well how about we agree that that property is worth $200,000, and this one over here is worth a million dollars. Now you can start to divide the estate, and you can say, okay, if it's going to be a 50-50 at least of that property I'll get these properties, you get these properties, and that comes out to 50-50.

Leh Meriwether:             Right. We know that in this state while it doesn't say equitable like it says here in Georgia when you read the definition of the division of community property it says just and equitable. The court will divide it in a just and equitable fashion. So just figuring out the value of all those pieces of property can easily cost then tens if not hundreds of thousands of dollars by there. Then let's say you need to change the title on all those. Well, now you have to add in the lawyer's fees just to change the titles. You could be spending a few hundred bucks on each property especially if you're going to change the name. That's all 100 properties going back to our hypothetical. So if your fees are, I don't know, they could be 500 bucks again, so now you're at $50,000 on the low-end for appraisals, and $50,000 to change the title. That's assuming there's no filing fees.

Todd Orston:                   That's also assuming that there's not mortgages, now granted, but, yeah, for tax reasons they may say, you know what? It's better to borrow someone's money and pay a low interest rate, and I can make more money from my investments than I'm paying ... So I've seen people, actually-

Leh Meriwether:             I'd still be surprised.

Todd Orston:                   I would be, but the point is there are a whole number of other issues that might have to be resolved. That's not going to stop them from negotiating and settling, but it has to be dealt with.

Leh Meriwether:             Then there's another analysis to be done on this. Gosh, we haven't even gotten to Amazon yet. We're still on the real estate. So the other analysis is since these aren't your private residence there's going to be capital gain treatments when you go to sell it, so if you try to be fair maybe you bought this piece of property at $200,000 and now it's worth a million, but when you include capital gain treatment if you go to sell you're not going to get $800,000 because you've got to pay, I think, it's 20%, maybe a little bit more than 20% because of his bracket. I'm not up on the recent changes in capital gain, so if you are a divorce lawyer you'd have to bring a tax lawyer and a CPA.

Todd Orston:                   Right, and that goes back to where some of these because remember that's what we're talking about.

Leh Meriwether:             The expenses keep growing.

Todd Orston:                   How the expenses grow it's because there are experts that you're going to need to pull in. I can guarantee you that there is probably a small army of tax professionals who are going to be involved.

Leh Meriwether:             Who are already involved.

Todd Orston:                   Yeah, that are already involved, but that are going to be involved in the divorce process to figure out and make sure that any of the steps that they take to divide the estate don't basically bite them. Now granted, biting them they're going to survive no matter what, financially, but aren't going to come back and bite them in terms of taxes.

Leh Meriwether:             But they may be trying to get creative.

Todd Orston:                   That's right.

Leh Meriwether:             We're going to talk about up next we're going to talk about Amazon, and how that complicates things. So they may get creative, and let's say hypothetically they're able to carve out the majority of the real estate and give it to, I think, it's MacKenzie is her name, give it to her in exchange for him keeping a larger share of Amazon to avoid problems that we're going to talk about in a little bit. So you need to do those valuations to keep it fair. So it's not that the lawyers are expensive, or, gosh, a million dollars that sounds like a lot, but when you start breaking it down to all these analyses that need to occur to follow their instructions we want it to be a fair and equitable split, boy, you can get to a million dollars quickly.

Todd Orston:                   Also, it reopens a conversation about alimony because I can tell you right now that if he walks away with a company that is paying him a whole bunch of money, and she takes other assets that aren't income producing assets.

Leh Meriwether:             True, yeah.

Todd Orston:                   She might make a claim for alimony that is basically like, well, hold on one second. You have a company that's paying you millions probably, or whatever it is he's being paid.

Leh Meriwether:             I think his salary is actually really low, but he gets paid stock options.

Todd Orston:                   Right, exactly. That she might say I'm going to need alimony so that I can live a certain lifestyle and not have to immediately start dipping into the estate assets that I get in the property division.

Leh Meriwether:             Yeah, so there could be a situation where she takes a lower percentage of the marital estate in exchange for him paying her alimony over some time.

Todd Orston:                   Over a period of time.

Leh Meriwether:             Yeah, so it's not that alimony has been eliminated, but if you try to be creative that's an option. Up next we're going to talk about how Jeff's ownership interest in Amazon it also complicates this divorce.

Leh Meriwether:             Welcome everyone. I'm Leh Meriwether, and with me is Todd Orston. Todd and I are partners at the law firm of Meriwether & Tharp. You're listening to Meriwether & Tharp Radio on The New Talk 106.7. If you want to read more about us you can always check us online at Atlanta Divorce Team.com. Well, today, we have been talking about Bezos.

Todd Orston:                   When you say it that way it sounds ominous.

Leh Meriwether:             It does.

Todd Orston:                   Bezos.

Leh Meriwether:             Now we're talking about Jeff Bezos, the current CEO of Amazon, and the largest single shareholder of Amazon. Well, he and his wife announced a couple weeks ago that they are going to get a divorce, so we are breaking down how this divorce would be pretty expensive even with the parties saying, hey, we want this to be fair. So it's such an interesting case. I mean, you don't see billionaires get divorced that often, and when they do just the analysis of it almost from a lawyer standpoint becomes fascinating. A lot of times people are very interested in, gosh, how do you split up something like this?

Todd Orston:                   Yeah, the majority of divorce cases the attorney can handle it, and doesn't usually need to hire any experts to help.

Leh Meriwether:             Yeah.

Todd Orston:                   This is case where not only are experts going to need to be retained to assist, but it could be a literal army of experts when it comes to real property meaning real estate, valuations. When it comes to business valuations. When it comes to tax analysis the amount of assistance that they will need to make sure that they first of all are structuring a fair agreement, and, two, they're structuring an agreement that doesn't have any hidden consequences to either party tax or other consequences.

Leh Meriwether:             Then they'll be costs in executing the agreement.

Todd Orston:                   Absolutely.

Leh Meriwether:             All right, well, let's talk about Amazon because this is really interesting because when you have a publicly traded company things change. At one level he's still the face of Amazon, so if there is bad behavior that comes out in the divorce it can impact stock prices. People can get skittish and want to back out. That's probably one of the reasons why they announced it like they did, and said they want it to be amicable. I would imagine if it's in MacKenzie's ... I think that's how you pronounce her name, MacKenzie's best interest or Ms. Bezos to not say anything even if there was bad behavior because it would impact her value of what she might get out of this.

Todd Orston:                   She'd be cutting off her nose to spite her face. She'd be, oh, well, it's out there, it's public, he engaged in bad behavior, and now all of a sudden the value of the stock that she might get a portion of is lower.

Leh Meriwether:             So what people might say, well, why doesn't he just give her 8% or his half it'd just be over 8%, but give her 8% of his Amazon stock. Well, that creates a problem because the other shareholders may get worried about, well, what is her plan? She really hasn't been involved in the business in a long time. Where does she want to take the company? Is that going to create tension inside Amazon? The shareholders might not like it. The shareholders may say, oh, well, and I'm guessing with a C corporation that's what this is you can get really flexible in stocks. Perhaps he can create, and this is where the extra costs would come in, lawyers fees in creating new stocks that perhaps he gives her 8% so she gets the value, but it's non-voting stock, so that is a potential possibility.

Leh Meriwether:             There was a case, Steve Wynn, the Wynn Hotels in Las Vegas. It's my understanding that when he went through a divorce he did give his wife half his stock. Well, she used that stock to exert influence over the business to try to take it in the direction that she wanted to take it in, and it created a lot of tension inside the business. Well, what seemed like a good easy idea all of a sudden created problems down the line. While they became they were divorced from a standpoint of a marriage, they were still married inside the business which creates problems.

Todd Orston:                   That always works out so well.

Leh Meriwether:             Yeah. So that's a complication. People might say, okay, Todd, why doesn't he just sell 8% of his stock?

Todd Orston:                   Well, again, that can have a huge impact. That could have a ripple effect. Him just giving up that much interest in the company can weaken his control over the company potentially.

Leh Meriwether:             Right.

Todd Orston:                   So, I mean, we are, I think, being foolish if we don't think that the fact that he is the largest single individual shareholder of a company like Amazon doesn't give him some strength, some power in that company.

Leh Meriwether:             Influence.

Todd Orston:                   Some influence in that company, so by suddenly watering that down, and lowering that level of interest he has in the company it absolutely can have a ripple effect, and can jeopardize his position there.

Leh Meriwether:             The other shareholders they may have invested in Amazon because they believe in his vision, which is why the shareholders are ... Anyways, I won't get into corporate law, but the shareholders have a lot of influence on whose on the board, and the board of directors who can influence who's the CEO, and all that stuff, but they may get worried like, oh, my gosh, he's just lost a portion of his interest. I don't know who the new shareholders are going to be because he's selling 8%. People start selling their stock, and then the stock plummets as a result. I mean, it's not going to plummet that much.

Todd Orston:                   I think a lot would have to happen for Amazon stock to plummet.

Leh Meriwether:             It's going to drop, though.

Todd Orston:                   But it can have an impact.

Leh Meriwether:             Right.

Todd Orston:                   The bottom line is they don't want their personal life to impact something like Amazon, or Blue Horizon. I mean, whatever business interest that they-

Leh Meriwether:             Blue Origin.

Todd Orston:                   Origin, pardon me. So they don't want it to have that kind of an impact, and that's why these experts that we're talking about, and we use experts all the time, right? Not to this degree, not to this extent, but that's why they become so important, and that's why the costs go up.

Leh Meriwether:             You brought up a good point when we were talking about doing this show. As the CEO of a publicly traded company he receives stock options as part of his part of ... He has stock that's part of his pay is what sort of limitations are there from a Security Exchange Commission, SEC, they're the ones who control or supervise or monitor publicly traded companies. Are there limitations from that area of the law as to how much he can sell? Are there limitations under his contract as a CEO? Because a lot of times there's written agreements with the business where it says even though he created the business they may have made a written contract that says you can't sell more than X percent at any given time, so there may be some contractual limitations.

Todd Orston:                   That, talk about a ripple effect, if all of a sudden you see the CEO dumping all of his stock in a company. Now granted, again, we're talking about Amazon, but if this were a company other than Amazon, and you see the CEO dumping for whatever reason stock investor confidence will probably hit an all-time low. With Amazon, it would probably open up a lot of opportunities for people to grab up as much as they can, but still the ripple effect is something that has to be taken into consideration, and that's why tax specialists and other financial experts are going to need and will end up coming in to make sure that they don't do something that can hurt them personally, or hurt the companies they are invested in.

Leh Meriwether:             So in this case really the divorce lawyer almost becomes the general contractor for lack ... They're not necessarily the lawyer making all of the decisions. They're finding out, okay, I've got this piece of the estate. How can we divide this? Oh, I need a security's lawyer to double-check me here. I need a contract lawyer to read over his agreement. What can we do and what can't we do? So they basically become the coordinator of this divorce.

Todd Orston:                   Almost like the conductor of an orchestra.

Leh Meriwether:             Yes, that's a better term.

Todd Orston:                   They know what needs to be done, but the way that we practice is do we understand taxes and the impact of different decisions. If you do something in a divorce that can have a direct tax impact, yes, and financial impacts, yes, we know those things, but we are not experts.

Leh Meriwether:             Right.

Todd Orston:                   So if it gets too complex we have no problem bringing in an expert. There's multiple benefits. A, it helps us to make sure we do the right thing for our client, and get the best deal for our client, but on top of that it's an expert that if we have to go to court we have an expert who can come into court and testify on behalf of our client, and that's good evidence for a judge. Yes, it's like a conductor. They're going to understand all of these things.

Leh Meriwether:             Right, and try to bring it together.

Todd Orston:                   Right, but they're going to say, let me bring ... I need to crunch some numbers, and I'm going to have these other experts come in and do the crunching.

Leh Meriwether:             Yeah, so I suppose here's another cost question. So let's say they can get creative, and separate out 8% of his stock, but it's non-voting stock so she gets the value of that, but she can't influence the business. Who should pay for that cost because that would cost money to create a new class of stock if it doesn't already exist, but, I guess, he'd also have to reclassify his stock. Is he responsible for that? Is that something the business would pay for, Amazon? That's not something, I mean, I haven't done corporate law in a long time so I don't know the answer to that, and neither us is a security lawyer.

Todd Orston:                   I think we would both be naïve if we believe that what's going to happen is a simple split down the middle of the stock, and interest in the companies, okay. Which means that if equitable to them is as close to 50-50 as possible, which it may not be, it may not be, then that's where the experts come in.

Leh Meriwether:             Up next we're going to talk about Blue Origin. Todd, while we're on a break let's take a moment to speak just with our podcast listeners.

Todd Orston:                   Great idea, Leh. First, thank you for listening. If you're a client of ours thank you for taking the time to educate yourself. It really helps us help you.

Leh Meriwether:             I want to thank those that recently took a moment to review our podcast. We really appreciate it. If you feel like you're gaining a value from this show, please take a moment to post a review. The reviews help others find the show which allows us to help even more people.

Todd Orston:                   If you're not sure how to post a review our webmasters put together a simple explanation on our web page. You can find it at MTLawoffice.com/reviewit. That's M as in Mary, T as in Tom, lawoffice.com/reviewit.

Leh Meriwether:             Welcome everyone. I'm Leh Meriwether, and with me is Todd Orston. Todd and I are partners at the law firm of Meriwether and Tharp. You're listening to Meriwether and Tharp Radio on The New Talk 106.7. If you want to read more about us, you can always check us out online at Atlanta Divorce Team.com.

Leh Meriwether:             Well, today, gosh, there was so much more we want to talk about, but we only have one segment left to talk about this Bezos divorce, the wealthiest, at least at the time of recording this is the wealthiest man in the world. He's the largest single shareholder of one of the largest companies in the world. Unfortunately, he's getting a divorce, so we're talking about the complexities. Actually, we're probably just scratching the surface of the complexities of this divorce. We talked about Amazon the last segment how it can be tricky. He can't just say, well, here's 8% of my stock not with this publicly traded company.

Leh Meriwether:             Now we're going to talk about Blue Origin. A lot of people don't know about this because they hear about Amazon, but Blue Origin, I don't know the details of his ownership interest, but he helped found this business called Blue Origin, and their mission, or their vision is millions of people working and living in space. I think that's right. You can go to Blue Origin.com if you want to look it up, but it's really neat. I mean, they had a rocket that sent a pod up into space, and then at the rocket base landed itself back down on the ground. It is amazing technology. So how do you value this? How do you appraise it because you know that it's not making any money yet because I don't think they have launched any satellites. Now he is competing with SpaceX like Boeing, Orbital Sciences, Sierra Nevada Corporation, Virgin Galactic.

Todd Orston:                   But the bottom line is whether it is earning money or not it is a company that has literally built a spaceship, has put a pod up into the upper atmosphere.

Leh Meriwether:             It landed safety.

Todd Orston:                   The booster landed safely, and the pod landed safely, so there is value here, but we as attorneys are we able to value it? Are we able to even pretend we can come up with a number that would be a fair number in terms of value that can then be used to help determine division of assets? No.

Leh Meriwether:             Right.

Todd Orston:                   That's where the experts come in and that's why the cost will go up.

Leh Meriwether:             But, see, this is such a new area. I mean, let me give you an example. So when we have a divorce where there is let's say a dental practice, or a doctor's practice, or a franchise of any type of different franchise whether it be Krispy-Kreme, are they a franchise? I guess they do, or maybe McDonald's. Those have been spot and sold over the years. The forensic accountants that come into give a business valuation they can literally go to databases to see what these businesses have sold for recently, and then apply those to the data they gather from the particular business, and it influences what these things can be sold for. There's a track record. There really is not much of a track record that I'm aware of when it comes to a civil space race because that's kind of what we have like I was saying Virgin Galactic they're trying to do something very similar. There's Ad Astra Rocket Company. I, actually, looked it up there's a bunch of companies that are racing to send people up. I think Virgin was focusing more on the tourism part.

Todd Orston:                   Right.

Leh Meriwether:             But I think that's a component of Blue Origin. How do you value that? I mean, is there even an expert who can come out and value it? I suppose that if he was not ... I say, he, Jeff, if he wasn't the sole investor in this, and he had other investors like maybe there was an investment group. They may have had their own internal, so this is where discovery might come in, or maybe they request that, hey, when you thought to invest what did you think this business was going to be ultimately worth, and maybe get some information there, but if he took marital funds to found it maybe it was all Mr. Bezos who started this.

Leh Meriwether:             If it was all his investment then it's absolutely marital, and how do you divide that? Somebody could say, well, maybe she should get 50 ... Let's say, assume for this hypothetical that he owns 100% of it, and it's a for-profit business not some non-profit because that can change things. We haven't even talked about all the foundations they have. They put $2 billion in a foundation recently. We won't have time for that. Is it fair that she just gets 50% and doesn't work in it, and he builds it up over the course of time?

Todd Orston:                   No, I mean, for her to get 50% and it's valued right now, and then he keeps running and operating the business, I mean, well, one person could say, no, that's not fair because he has years left to try and build value and start making money turn it into actually a profitable company, and the value will skyrocket and she benefited. Others will say she's been there from the get-go, and it's stock.

Leh Meriwether:             Weren't they married 25 years in that range?

Todd Orston:                   Yeah, it's a long-term marriage. Look, really what it comes down to is, again, deciding what the value is is going to be so hard which is why experts are necessary. Once you do get to a value division is not easy because that's, again, a company where is he going to want to just give her 50% ownership of that company? Probably not. That's something he wants to control. It may be his baby, you know what I mean?

Leh Meriwether:             Well, now this one is really interesting because I don't think that's a publicly traded company so it makes it more complex. Let's say he's not the sole owner.

Todd Orston:                   That's right.

Leh Meriwether:             And there's other owners they may have sectioned in their operating agreement that prevents him from splitting it because they have ...

Todd Orston:                   That's right.

Leh Meriwether:             I don't know if this company is based in California or not, but I'm thinking Georgia law. With Georgia LLC law they can put together operating agreements that prevent someone from giving ownership to a third party. The other people can object. If it's private she may not be able to get ownership interest.

Todd Orston:                   That's right.

Leh Meriwether:             I mean, Blue Origin has its own complications separate from Amazon.

Todd Orston:                   When you're talking the other thing you have to keep in mind is when you are talking about an estate this size, and when you're talking about an estate where a large portion of the value is tied up in companies than 50-50 may not be what she's going for.

Leh Meriwether:             Yes.

Todd Orston:                   I mean, there are plenty of cases where it could be a 70-30, it could be an 80-20 split where he's getting 80%, but, again, when you're talking about numbers like this she would then be getting somewhere between 25 and $30 billion.

Leh Meriwether:             Yeah.

Todd Orston:                   So she might be like, yeah, give me my $25 billion and you can keep Amazon and this and that. More than likely she'll get some Amazon stock, and she'll get some stock in other companies, and other things, and she'll get some real estate. I think she's going to be fine, yeah.

Leh Meriwether:             That is an excellent point because if you're getting creative, again, we could bring in another expert. I don't know, you have to get a financial planner on steroids, but they come in and say, you know what? Let's not complicate Amazon you keep ... I don't know what that Amazon stock is, but let's say hypothetically the Amazon stock is worth 100 billion, okay, his Amazon stock. You keep that, and you keep Blue Origin let's say it's valued at a billion. I don't know. I'm just throwing something out there. You keep the other 36 billion, so you keep all the real estate you keep. We'll just transfer it all to you. You keep The Washington Post because I think he owns that, and that may be generating revenue I have no idea.

Todd Orston:                   She may not want it.

Leh Meriwether:             Right, she may not want it.

Todd Orston:                   She may be like I don't want to run a newspaper.

Leh Meriwether:             Maybe they have other businesses, and the person comes in and says, you know what? All these other businesses are generating a lot of revenue for you already. They're generating several million a year. Here's the plan where you can keep this, set these other assets aside. Let them grow in value. You live off this two or three million a year you get from this, and she might be fine with that. Maybe he offsets it by paying her $100,000 a month in child support, I don't know, I mean, but here's the good thing. If they were being honest and they're saying we're going to do this amicably it leaves room for creativity in dividing the marital estate, or the community property I should say because it's in Washington.

Todd Orston:                   Yeah, it's not going to be easy even if they are working well together.

Leh Meriwether:             Right.

Todd Orston:                   Simply put there's too much information. There are too many question marks. There's too much analysis that needs to happen in order for them to be able to sit at a table, and have an educated conversation about what would be a fair and reasonable resolution in this case. Again, maybe that's 50-50. Maybe it's something less. I think it would be probably something less, significantly less, but when you start looking at all the moving pieces, and all the different valuations that have to be done it's going to be a tremendous amount of work. They can do it, but it's going to cost a lot of money.

Leh Meriwether:             It's going to take time.

Todd Orston:                   That's right.

Leh Meriwether:             You wouldn't want to rush through this. Going back to your other point maybe you don't want to have an arrangement where she takes on certain property, and there's tax liabilities they're not aware of, and that sort of thing.

Todd Orston:                   Then she has to pay it out of the billions in cash, and other cash equivalents that she has.

Leh Meriwether:             That would be such a tragedy.

Todd Orston:                   How does she do that? By the way, that was sarcasm.

Leh Meriwether:             Well, this is not sarcasm. We, unfortunately, are out of time. Gosh, there was actually several more things I wanted to talk about, but there just wasn't enough time. Well, hey, everyone, thanks so much for listening. If you're really enjoying this show we would love it if you could post a review about us. You could read about how to do that at MTLawOffice.com/reviewit. Again, thanks so much for listening.

Speaker 3:                        This audio program does not establish an attorney-client relationship with Meriwether & Tharp.