No Mistake in Simkin v. Blank Divorce Agreement

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3 Responses

  1. Ken Rhodes says:

    I am confused by the confusion.

    A lot of the reasoning of your previous post centered on the question of whether the “account” was “real.” You wrote this:

    Their bargain was to split economic value both parties thought to be $5.6 million. They were both innocently mistaken about that. In reality, there was nothing to split. There were no investments, securities, or returns or losses, and without those attributes the idea of an account is a nullity.

    I have a different view. The “accounting” was bogus, but if Steven could have signed a withdrawal slip and taken $5.6 million from the Madoff firm, then the “account,” whatever it represented, had that dollar value at that moment. The idea of the account was not a nullity, because even though there were no underlying investments, securities, etc., there definitely was “something to split,” as could have been done had they simply agreed to close the “account” and split the cash.

    The mutual mistake had to be whether the so-called “account” had a redemption value at that moment in time, which apparently it did.

  2. George says:

    A comment at the NYT post shows the error of the NY opinion. It incorrectly ignores federal law that would have rendered any Simkin withdraw from the account illegal. In Ponzi schemes, anyone who withdraws proceeds holds the fraudulent funds in trust for allocation among all victims. (The comment at the NYT is #2, at 6:40 am 4/4/12, calling the judge’s “ignorance of the law” hard to believe and saying the deicion is “wildly unfair”