2:46pm PT by Eriq Gardner
Rupert Murdoch Divorce Filing: What's Next (Analysis)
This morning, Rupert Murdoch filed papers in New York Supreme Court to divorce Wendi, his wife of 14 years.
By lodging papers in New York, the Murdochs will have the benefit of the state's liberal allowance of secrecy. Unlike California, New York is extremely lenient when it comes to sealing court proceedings in family disputes. It's one of the big reasons why celebrities like Tom Cruise and Katie Holmes have flocked to this jurisdiction. And if there's any doubt about whether Rupert -- who has homes around the world, but is a naturalized U.S. citizen -- belongs in New York court, it should be settled by the fact that the Murdochs' wedding happened aboard a yacht on New York Harbor in 1999.
Since this is a media mogul whose fortune is estimated to be more than $11 billion, there will naturally be attention paid to the prenuptial agreement between the Murdochs. A source tells The Hollywood Reporter that they had one -- and that it is "a traditional prenup, nothing out of ordinary." Wendi and her two children have 8.73 million shares of Class A nonvoting shares of News Corp. stock, under another reported agreement.
Besides secrecy, Rupert's other advantage in filing for divorce in New York is that the prenup is more likely than not to be upheld as valid. According to Laura Zwicker, an attorney at Greenberg Glusker who counsels high-net-worth individuals and their families, "New York favors enforceability of prenup agreements, and unless Wendi is able to establish [she signed in] fraud or duress, it is likely to withstand a challenge."
The most pressing concern is that the News Corp. chairman is no spring chicken. At 82-years-old, he should be concerned about his mortality.
One of the quirks of divorce law in many states (including New York) is what happens while the parties are in the midst of completing the split. Typically, an immediate restraining order is entered that freezes assets. So unless Murdoch dances around this by having his will changed very carefully, much of his assets would still go to Wendi in the event that he dies before the two are able to effectuate the divorce.
To make matters more morbid, as the current spouse, Wendi likely holds power of attorney over key life-or-death decisions regarding Murdoch. "He'll need to change his advance health care directive," notes Zwicker.
The divorce could happen quickly if there is no quarreling between the parties. Family law experts say that over the years, athletes -- not media moguls -- have provoked the most drawn-out cases because of disparity in education levels among marrying partners and arguments over who had adequate legal representation during the course of drawing up a prenup.
Before Wendi was married to Rupert, she earned a masters degree from Yale and worked in television. Any argument that the then-31-year-old didn't know any better when she married the then-68-year-old mogul would seemingly be outweighed by her educational pedigree and her professional history.
But if she does successfully argue that the prenup was entered into under fraud or duress -- or if she is able to use as leverage in settlement discussions New York's preference toward awarding custody of children to mothers -- there could be ramifications.
Zwicker points to a landmark ruling in U.K. appeals court earlier this week that involved an oil trader who had concealed wealth in corporate assets. The appeals court pierced the corporate veil and gave a victory to the trader's ex-wife, who was seeking a share in properties owned by his company.
News Corp. certainly owns U.K. assets and Zwicker says, "Wendi and her lawyers might be thinking about that decision today."