Inside the most dramatic divorce in New York, where 'postnups' with unbelievable clauses rule
You only have to glance at the New York gossip pages this month to know not having the protection of a prenuptial agreement is an anxiety-inducing dilemma. One divorce in particular has shaken the confidence of the Manhattan elite this month. The city’s knottiest post-split battle, between David Mugrabi (an art collector whose family owns the largest private Warhol collection) and his ex-wife Libbie, is proving that when it comes to dividing up the artworks and Ferraris, you’re lost without a cast-iron prenup.
The Mugrabis were 13 years into their marriage when Libbie rose early one morning in 2018 after a dinner party at the couple’s nine-bedroom Sag Harbor home. As has been widely reported, Mrs Mugrabi pattered down stairs in the early morning light and discovered her husband fast asleep on the floor, his head in the lap of a naked lady lying on their sofa.
Both were asleep beneath a towel, with clear evidence scattered around the room that they had been skinny-dipping in the swimming pool the previous night. Mrs Mugrabi was already suspicious about her husband’s infidelities, she told a journalist soon after, because of his “unexplained use” of the family jet to go off on jaunts alone while the family were on holiday.
Mrs Mugrabi filed for divorce soon after, and the two sides went to war, with Mrs Mugrabi describing her soon-to-be-ex as a ‘starter husband’. During one of their early divorce hearings when Mr Mugrabi appeared in court, Mrs Mugrabi’s lawyer cried “cuff him and take him down to the tombs!” The couple also had a physical fight over a $500k Keith Haring sculpture, according to the New York Post.
The Mugrabi divorce was finally settled in December 2020 but the two sides were back in court in April this year. Mr Mugrabi claimed his ex-wife had yet to hand over 16 art-works, a Porsche 911 and a 1974 Ferrari.
Possibly as a result of the Mugrabi divorce publicity, postnuptial agreements are creeping into the lexicon of lawyer speak for wealthier partners in New York’s millionaire plus-marriages. Numbers are rising according to New York’s top prenup and postnup attorney, Robert Wallack, who specialises in negotiating the trickier side of high net worth romances so the lovers don’t have to.
“Prenuptial and postnuptial agreements are definitely on the rise in Manhattan,” Wallack told the Telegraph. “We are also seeing more prenuptial agreements in first-timers. Traditionally, prenups were sought by those entering second and third marriages to protect accumulated assets over a long career or from inheritances. Now people are getting wealthier, younger in New York.”
Tech business investments including start-ups, SPACS and more have brought cash into the city’s most agile generation business-wise. “Couples in their 20s and 30s who have either accumulated a great deal of wealth already or are figuring on that happening are seeking prenups more than ever.” Added our lawyer. “ They want to protect their wealth but also divide it fairly if that ever becomes necessary.”
Wallack blames the pandemic for the rise in postnuptial agreements alongside the traditional reasons, such as regret by one party over not instigating an asset-protecting prenuptial agreement before taking the vows, or a marriage hitting a rocky patch.
“During the pandemic, people’s circumstances changed or they ended up having to spend more time than ever together. We saw many who were not quite ready to pull the trigger on a divorce but looking for security and a way to resolve financial issues in advance if the worst happened.”
However, what seems like a divorce-inducing conversation to some, “How about we figure out a postnup?” is just another dinner-time chat for wealthy Manhattanites, the most forthright money-talkers in the Western World after all. Wallack suggests playing it straight to his clients. “I might suggest they say something like, 'Look, things aren’t great now. I want to work on them and try to make this marriage work but maybe we should resolve some issues. Then, if the worst ever happens to us, we won’t be fighting in years to come.'”
However, Wallack agreed that Mugrabi-style infidelity is the lightning rod for marital fury, no matter the financial scale. No-cheating clauses feature in many US celebrity prenups, often linked to the length of a marriage.
For example, five years of marriage plus one affair might equal the Hamptons mansion, $2m-a-month and one Porsche for the cheated-upon. In the event of a divorce between Catherine Zeta Jones and Michael Douglas, it’s been reported that she will get $2.8m per year of marriage plus an extra $5m on top of the whole amount if he cheats.
Angelina Jolie and Brad Pitt reportedly had a clause in their prenup which decreed that she would get full custody of the kids in a split if he cheated. Nicole Kidman and husband Keith Urban will reportedly settle on a financially generous amount for him if they split, but this will be forfeited if Urban resumes his now-defunct drug habit.
It was revealed last month along with announcement of Bill and Melinda Gates' impending divorce that the world's wealthiest couple had not signed a financial prenuptial agreement. Melinda Gates cited irretrievable breakdown of her marriage to Bill. Yet stories abound that Gates’ one-weekend-a-year arrangement with his ex Ann Winblad, a former tech consultant for IBM and Microsoft turned venture capitalist who is rumored to have played a part. It is increasingly rare that the super wealthy ever settle a divorce financially on the grounds of a prenup signed long ago. Robert Wallack laid out a couple of key factors for this.
“Mainly, it’s buyer's remorse. Someone believes they entered into an agreement they should not have, maybe their financial situation changed unexpectedly through the years and there is more money around. Or, something catastrophic happened like cheating, making some people want to invalidate the original deal they signed.”
Things can get very ugly, even on the laid-back West Coast, where hip hop mogul Dr Dre is currently embroiled in a battle royale with his wife of 24 years, Nicole Jones. He claims he can’t remember signing a prenup; she has demanded his three mistresses appear in court as evidence to support her claims for a multi-million-dollar settlement.
It seems as though parties with equal wealth in shorter marriages are more likely to stick to the rules of prenups. Kim Kardashian and Kanye West are reportedly going with their rather modest version after only six years of marriage. Kim gets one million for each year of marriage within the first ten years, with no infidelity clauses.
The only clause to leak out was the one Kanye inserted to ensure that Kim’s ‘momager’ mother Kris Jenner would have absolutely no input on business and career decisions affecting the ‘Kimye’ marriage. In-law clauses are rare, but who can blame West? On the other hand, Libbie Mugrabi is reportedly reconciled with her in-laws if not her ex-husband and is now back working for her father-in-law’s family art business, as she used to pre-divorce. Keeping the money in the family is, after all, New York’s first dynastic rule, divorce or not.
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