For $10, Lehman Brothers’ Fuld sold Florida mansion to wife
Housing prices are falling around the country, but this one sounds hard to believe: A seaside mansion on Jupiter Island in Florida, bought for more than $13 million five years ago, was just sold for $10.world Updated: Jan 26, 2009 22:40 IST
Housing prices are falling around the country, but this one sounds hard to believe: A seaside mansion on Jupiter Island in Florida, bought for more than $13 million five years ago, was just sold for $10.
That’s right, 10 bucks. But in this case, the transaction is likely to raise eyebrows for reasons other than the price.
The seller, according to county records, was Richard S. Fuld Jr., the former chairman and chief executive of Lehman Brothers. The buyer was his wife, Kathleen.
The motivation is unclear, but Fuld has been under intense scrutiny since Lehman declared bankruptcy in September.
The longtime leader of the brokerage firm is at the centre of a federal investigation into whether Lehman executives misled investors about the state of the company. And he was grilled by lawmakers at a Congressional hearing in October.
Fuld said in sworn testimony before a Congressional panel last year that while he took full responsibility for the debacle, he believed that all his decisions “were both prudent and appropriate” given the information he had at the time.
The couple jointly bought the home in Hobe Sound, Florida, for $13.75 million in March 2004, and the sale to Fuld on November 10 was first reported by Cityfile.com.
It is possible that he is now transferring properties because of his fears of investor lawsuits or a possible bankruptcy, lawyers in Florida said.
“This is the oldest trick in the books” said Eric S. Ruff, a lawyer with Ruff & Cohen in Gainesville, Fla. “It’s common when you hear the feet of your creditors approaching to divest yourself.”
Fuld has been accused by some of doing too little too late to save the firm. However, he has said publicly that the blame should be shared by regulators and that he took steps to try to save — or sell — the investment bank.
It is unclear how much Kathleen Fuld paid for the house. It is standard for property deeds to contain a placeholder number. The $10 on the deed in Martin County could simply be a placeholder, and Kathleen Fuld might have paid more, lawyers said.
The tax stamp on the deed says there were 70 cents of taxes, which would suggest that she may have paid as much as $100 for the house.