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A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox. Last week, Dan Rottenstreich’s law firm got an unusual case. A woman came to the firm asking for representation in her divorce. Like most of Rottenstreich’s clients, the woman and her husband were wealthy. Unlike most of his clients, their fortune came from crypto. The husband had founded a crypto firm, Rottenstreich said, whose assets were held in offshore trusts and crypto wallets — the wife needed help finding them. “We’re going to have to go back in time, find the transfers to digital exchanges, bring in crypto forensics, find the wallets and figure out what transactions went on over time,” said Rottenstreich, partner in Rottenstreich Farley Bronstein Fisher Potter Hodas LLP (RFB+Fisher Potter Hodas, for short). “We do what we always do. We follow the money.” Following the money has become harder than ever when it comes to wealthy divorces. As today’s fortunes have ballooned in size and number, they’ve also expanded in complexity. Offshoring, holding companies, highly specialized trusts and exotic jurisdictions around the world have made finding marital assets almost impossible for all but the most sophisticated financial experts. That’s where RFB+Fisher Potter Hodas comes in. Founded in 2023 from the merger of two matrimonial law firms — one in New York and one in Palm Beach, Florida — it’s rapidly grown into the one-stop shop for today’s most expensive divorces. The firm’s team of 40 lawyers includes former government prosecutors, trial lawyers, commercial litigators, and trust and estate experts, many from the top law schools and blue-chip firms. The aim, according to Rottenstreich and partner Jeff Fisher, is to bring divorce law into the modern wealth age. “Wealth is totally different now, and so are the cases,” Fisher said. “They’re so much bigger and more complicated. We have some cases where we have a million documents.” The story behind the new law firm, and its clientele, mirrors the rapid evolution of wealth over the past two decades. Fisher, one of the founding partners, started as an assistant U.S. attorney for the Southern District of Florida, prosecuting drug and bank fraud cases in Miami in the early 1980s. He later moved to Palm Beach and started taking divorce cases, representing Angela Koch in her much-publicized divorce from Bill Koch. Over time his firm, then called Fisher & Bendeck, grew to 10 attorneys, lifted by the rising fortunes and divorces of the Palm Beach elite. He handled the divorce of Ariane Dart from packaging king and “burger-box billionaire” Robert Dart and many others he can’t name, “since we always promise confidentiality.” Business was good, but his firm had a problem. His cases were growing, but he had trouble recruiting top law talent to handle the load. Matrimonial law carried a stigma of the 1980s and 1990s, when lawyers were seen as little more than negotiators for alimony or child support. “We had great demand but no supply,” he said. At the same time, the demographics of wealth were shifting. In the 1990s and early 2000s, the wealth in Palm Beach mainly came from inheritances or publicly traded stock, with founders and CEOs. After the 2008 financial crisis, the bull market and asset boom created massive fortunes in tech, private equity, venture capital and private startups. Wealth became younger and global — and increasingly opaque. While the assets of the CEO of a publicly traded company are relatively easy to crack and divvy up — he keeps the $20 million of GE stock, she gets the Hamptons house and the $10 million Picasso — the new breed of global super rich made their money from secretive hedge funds, PE firms and private companies, with little or no public data. Fisher started thinking about how he could expand to attract more legal talent and better serve the new breed of clients. In 2017, he was representing Linda Macklowe in her divorce from developer Harry Macklowe, which centered on the couple’s $1 billion art collection. Despite bitter feuds in court, Fisher had friendly conversations with Harry’s lawyer, Dan Rottenstreich. Rottenstreich had represented Georgina Chapman in her divorce from Harvey Weinstein and Caryl Englander in her $1 billion divorce from hedge funder Israel Englander. Rottenstreich and Fisher knew many of the same people in their careers and after the trial was over, they started talking more about their firms. “We came up with this concept to merge the firms, to have an interstate presence and better serve the clients,” Fisher said. Rottenstreich added, “I liked the guy. And it’s been seamless.” Business is booming. The number of billionaires in the world has nearly doubled over the past decade, to more than 2,800, according to Forbes. The number of people worth $30 million or more has soared to over 426,000. As Fisher says “more wealth means more divorces.” At the same time, the number of so-called gray divorces, or divorces involving older couples has increased, driven in part by the highly publicized splits of Jeff Bezos and Bill Gates from their spouses. “They took away the stigma of the wealthy and divorce,” Fisher said. “Old wealth used to say, ‘I have an image to maintain.’ With Gates and Bezos, that got eroded.” Fisher said high-net-worth divorces in Florida have also surged due to the mass wealth migration during Covid from the Northeast and California. The firm recently opened a new office in Miami. Finding today’s big fortunes, however, has never been harder. In one case the firm is working on, led by founding partner John Farley, a California software tycoon moved to India in 2020 and filed for divorce. The entrepreneur, Indian-born Sridhar Vembu, co-founder of cloud software firm Zoho, engaged in a series of transactions in India that his ex-wife said reduced the marital property (which Vembu denies). None of the attorneys involved would comment on the case, but public court filings suggest it involves private holding companies in the U.S., Singapore and India with operations around the world. Trusts have become a constant challenge for divorce attorneys. More and more are being created in Nevada and Wyoming, which make it nearly impossible even for ex-spouses to collect or peer inside certain asset protection trusts. “Everyone seems to be using Wyoming now,” Rottenstreich said. “There is no doubt trusts are being used to shield assets.” Another case the firm is working on involves a social influencer and internet personality. While they can’t disclose any names, Rottenstreich said the firm is having to value the internet business with cash flow models and growth rates. He said the range “could be anywhere between $100 million to $1 billion.” They’re also trying to value the influencer’s online followers, since they’re often used to generate sales. “Social media accounts with millions of followers are an asset,” he said. “So how do you value them?” With the wealthy increasingly leading global lives, hopping from one country to another, often with multiple citizenships and homes around the world, the firm also has to work with different jurisdictions. Fisher said he was working with the American ex-wife of a French billionaire who wanted to keep custody of their daughter. He had to navigate international law to win a fine against the ex-husband of $700,000 a week until the daughter was returned. In the end, the attorneys say what matters most is coaching clients through the most stressful and emotional period of their lives. “The tough cases are where we work best,” Rottenstreich said. “Because they come to trust us. A lot of psychology goes into it.”
From left to right: Jeffrey Fisher, Zachary Potter, John Farley, Dan Rottenstreich and Benjamin Hodas, and in front: Peter Bronstein, of Rottenstreich Farley Bronstein Fisher Potter Hodas LLP.
Courtesy: RFB+ Fisher Potter Hodas
A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
Last week, Dan Rottenstreich’s law firm got an unusual case.
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