Russian Billionaire Sued in Divorce Spat

           HONOLULU (CN) – An estranged wife sued her Russian billionaire husband – the 100th richest man in the world – claiming he diverted millions of dollars into Hawaiian property in violation of a Swiss Supreme Court order freezing his assets during their divorce.
     Elena Rybolovleva sued Dmitri Rybolovlev in Oahu First Circuit Court. She also sued Kapha North Shore LLC, which she calls a “sham” company he used to buy a $20 million property on Kauai, from actors Will and Jada Pinkett-Smith.
     The Smiths are not parties to the complaint.
     Rybolovleva also sued Kapha North Shore manager David A. Lifson, a tax accountant who allegedly helped Rybolovlev buy the property.
     “Defendant Rybolovlev is the 100th richest person in the world, with a net worth believed to be in excess of $9 billion according to the Forbes list of billionaires,” Rybolovleva says in the lawsuit.
     Rybolovleva claims she initiated divorce proceedings in 2008 in Geneva, Switzerland, where she still lives. She believes her husband is in Monaco with their eldest daughter.
     “In parallel, plaintiff requested and finally obtained from the Swiss courts on March 4, 2010, an Order freezing the main assets held by defendant Rybolovlev directly or through various entities, in order to satisfy the monetary award that will be issued in her favor at the end of the divorce proceedings,” the complaint states.
     At that time, Rybolovlev’s main assets were stakes in two Russian companies, Silvinit and JSC Uralkali, held in trust for him by nonparty holding company Cypriot, Rybolovleva says.
     She claims the Swiss court order included “a provisional freeze of shares and the assets of defendant Rybolovlev held through trusts or otherwise.”
     “Since then, defendant Rybolovlev has deployed a lot of time and energy trying to escape the effects of such decision,” the complaint states.
     It adds: “Upon information and belief, between June 2010 and April 2011, defendant Rybolovlev, in direct contravention of the Swiss Court Order, liquidated his interest in both JSC Uralkali and Silvinit, worth several billion dollars, and used the proceeds, in part, to acquire the Property.
     “Upon information and belief, Defendant Kapha was formed by defendant Lifson on or about November 2, 2011, in anticipation of the purchase of the Property.”
     Lifson managed Kapha, kept a mailing address in New York City, and is a tax accountant with nonparty Crowe Horwath LLP, according to the complaint.
     “Upon information and belief, the Property consists of 6,744 square feet and was purchased by defendant Kapha from an entity controlled by the actor Will Smith in November 2011 for $20 million,” the complaint states.
     Rybolovleva claims the sale closed on Nov. 25, 2011, but she became aware of it this year, through a newspaper article.
     “Starting a few years before, and during the pendency of the divorce proceedings and this time in violation of the Swiss Court Order, defendant Rybolovlev used property acquired during the marriage to purchase a multitude of new assets, using for this purpose vehicles such as trusts and limited liability companies to place them beyond the reach of plaintiff,” she says in the complaint.
     Rybolovleva claims the properties include a $95 million home bought from Donald Trump; a $300 million penthouse in Monaco once owned by banker Edmond Safra, where Rybolovlev lives with the couple’s daughter; and an $88 million penthouse in Central Park West, which he bought from the chairman of Citigroup’s wife.
     None of the alleged sellers are parties to the complaint.
     Rybolovlev owns stock in the Bank of Cypress, a majority interest in the Monaco soccer team run by Prince Albert, and two Greek islands bought from the Onassis family, Rybolovleva claims.
     The complaint adds: “Rather than purchase the property in his own name, defendant Rybolovlev used the couple’s eldest daughter as straw person as another tactic to place assets beyond the reach of plaintiff.”
     Rybolovleva claims the Swiss court found that her husband “engineered a debtor relationship with the help of his daughter in order to be able to transfer that property to his daughter under compulsory recovery proceedings.”
     She claims the Hawaii property was put into Kapha’s name, so Rybolovlev’s name would not appear in Hawaii public records.
     She claims that Rybolovlev’s appeal of the Swiss order was rejected by the Swiss Supreme Court on April 26, 2012.
     Rybolovleva seeks an injunction and a constructive trust, enforcement of the Swiss order and a hold on all of her husband’s assets and property until the Swiss court makes its final determination
     She is represented by Jonathan Durrett.
     EDITOR’S NOTE: A spokesman for Rybolovlev sent this email to Courthouse News after the article above had been published:
     “[T]he structures (including trusts) challenged by the wife were created long before the divorce proceedings as part of succession planning by the husband for the benefit of the common children of the couple. The husband has never had an intent to divorce and even tried to resist the divorce and save the marriage during the first six months of the divorce proceedings. The Swiss freezing order is only binding within the jurisdiction of Swiss courts. None of the trusts challenged (and which assets are challenged) by the wife is subject to the jurisdiction of Swiss courts or participates in the Swiss proceedings.
     “All the transactions challenged by the wife took place outside of Switzerland and are not affected by the Swiss order. The wife failed to enforce the Swiss order or obtain an independent freezing injunction in the relevant jurisdictions.”
     This is an excerpt from the email from the spokesman, Sergey Chernitsyn. Parentheses are as in the email.

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