In what has become a public divorce case between the chief executive officer of Credit Suisse Group AG and his ex-wife, millionaire Brady Dougan was recently ordered to pay his wife over $750,000 in interest for a late divorce settlement payment. He was late on the payment by just 12 days, which indicates the size of the divorce settlement.
To most divorced couples, this seems like an incredibly high amount of interest. Yet the court unanimously upheld the interest payment based on the couple’s divorce settlement, which they entered into voluntarily. In addition, the justices stated that since Dougan was well educated about money and personal finance, that the terms of the settlement were valid.
So what were the terms? According to the settlement, if Dougan was late with the $7.5 million payment, which was due in June of 2006, he would have to pay his ex-wife a 10 percent interest charge starting from the date the agreement was signed in June of 2005. Dougan argued that he should only have to pay interest for the 12 days that he was late with the payment, and even voluntarily paid that amount when he sent the $7.5 million payment.
However, the state Supreme Court did not agree, and ruled in favor of the ex-wife, ordering Dougan to pay interest dating back to the June 2005 settlement agreement. Prior to the high court decision, the state trial court had found in favor of Dougan, and the appellate court had reversed, ruling for the ex-wife in a decision that was affirmed by the Supreme Court.
Source: Associated Press, “Credit Suisse CEO owes $750K for late payment,” Dave Collins, 27 June 2011