Former Shark Tank Star Ordered to Pay Ex-Wife $125,000 Per Month in Support
In a recent ruling by the Ontario court the husband, well-known TV-celebrity Robert Herjavec was ordered to pay his ex-wife, Diane Plese, $125,000 per month in spousal support for an indeterminate period. He was also ordered to pay her about $25 million, representing an equalization payment and her entitlement to shares in a cottage and vacation property. This is in addition to about $20 million she already received in assets from the marriage.
Herjavec, one of the stars of television’s Shark Tank and Dragon’s Den reality shows, had been married to Plese for 24 years before they split in 2014. Their separation was prompted by the revelation that he had been having an extramarital affair.
At stake in the divorce was what they considered an “unimaginable fortune,” which had snowballed from an original $31 million sale of Herjavec’s cyber-security company called “Brak” in 2001. This funded the development of a similar, equally-lucrative business later on. The influx of wealth had a significant effect on the couple’s lifestyle, as the court explained:
After the Brak sale, the family’s spending patterns changed dramatically. A new family home was purchased for over $7 million. It was located in the exclusive Bridle Path area of Toronto. In addition to many bedrooms, bathrooms, living and dining and family room, it also featured an indoor swimming pool, a ballroom, teahouse, and a huge garage, large enough to store many vehicles.
They acquired a new recreational property on Fisher Island in Florida. It cost more than $2.6 million. Boats and cars were purchased. The children were sent to exclusive private schools. Ultimately, Ms. Plese stopped working outside the home altogether.
In the context of settling their family law issues, the court turned to valuing the former couple’s property, including their 22,500-square-foot matrimonial home now valued at around $17 million, their $5 million cottage, their $4.8 million property in Fisher Island, as well as various boats, vehicles, and even their Aeroplan points. This was a considerable challenge due to the significant difference in valuations provided by their respective experts: For example, respecting the value each expert attributed to Herjavec’s current business alone, there was a spread of $30 million.
After concluding that Plese was entitled to about $25 million for her share of these items, the court turned to the issue of how much spousal support Herjavec should pay her. In doing so, the court cited from a paragraph of his own book, as evidence of the importance of the marriage and Plese’s support to his success. The court said:
This was a lengthy marriage of nearly three decades. The parties both testified they worked as a team. Mr. Herjavec himself perhaps put it best in his book titled Driven: How to Succeed in Business and in Life. At page 286 he says:
I’m fortunate in so many ways to have Diane as my spouse. She earned her optometry degree over six strenuous years of study, years that included countless nights of study and work as an intern. She knows what it’s like to work eighteen or twenty hours a day in pursuit of a goal; she understands the motivation behind it. Having obtained her degree she could count on a good income from steady employment, providing a safety net if one of my projects went belly up. This was enormous comfort to both of us, especially during my first years as an entrepreneur.
Clearly, Ms. Plese’s contributions from her own work were critical to Mr. Herjavec’s financial success, particularly in the early years of the marriage when he began Brak. Brak, of course, provided the foundation for [the later company] and its ultimate success. What Ms. Plese lost when she stopped working outside the home was that very steady employment and her own financial safety net created from her own separate earnings. This is a compensable loss.
In all the circumstances, the court concluded that Plese was entitled to spousal support of $125,000 per month, with no set termination date. Although this amount was actually lower than what the Spousal Support Advisory Guidelines would otherwise dictate, it incorporated the ongoing capital positions of each of the former spouses, and represented a reasonable balancing of the economic consequences of the end of their marriage.
For the full text of the decision, see:
At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com