The disgraced chief executive of Lehman Brothers transferred ownership of a $14 million Florida mansion to his wife for $100 in a possible attempt to move assets beyond the reach of infuriated investors of the collapsed bank.
Fuld deeded the house at 265 South Beach Road on Jupiter Island to his wife Kathleen on Nov. 10, according to records on the Web site of Martin County. Kathleen Fuld paid her husband $100 in the transaction, the minimum amount allowed to transfer a property.
The single-family home on 3.3 acres was assessed with a market value of $7,855,310 for the land and $5,459,840 for the house. The property is on the eastern side of the island, facing the Atlantic Ocean, records show.
"This is not a true sale," said Laurie Delong, a customer service representative in the Martin County assessor's office. "He more than likely quit-claimed this property over to her. That's an instrument used when there's no money involved."
Such transactions are typically done between family members for estate planning purposes or in the case of a divorce, she said.
Lehman spokeswoman Kimberly Macleod said Fuld would not comment on the transfer. Two Florida attorneys said Fuld may have made the move for estate planning purposes or to shelter assets from potential creditors under Florida's homestead act.
"Florida does have very strong homestead protection, which is designed to protect the principal family home from creditors — it's in the Florida Constitution," said Danaya Wright, a law professor at the University of Florida Levin College of Law.
If Kathleen Fuld makes the home her principal residence, it might be protected from any actions taken against her husband, Wright said.
Fuld also could have transferred the house to his wife to reduce her estate taxes, said Michael Lampert, a tax and estate planning lawyer. Fuld, 62, relinquished his posts as chairman and chief executive officer at Lehman on Dec. 31. He has stayed on as Lehman disperses assets to pay creditors after the fourth-largest investment bank filed the biggest U.S. bankruptcy with $613 billion in debt. He was paid $34.4 million in 2007.
Mary Schapiro, chairman of the Securities and Exchange Commission, said the agency sent letters to the 19 largest banks requesting information about Repo 105, an accounting strategy that has been blamed for the collapse of Lehman Bros. In testimony at a congressional hearing, Schapiro said the agency is looking into Lehman's use of Repo 105. Former Lehman CEO Richard Fuld said he has "absolutely no recollection whatsoever" about the firm using Repo 105 transactions. Meanwhile, the Financial Accounting Standards Board sent a letter to lawmakers saying it will work with the SEC to make changes to accounting rules for repos.
