The last few years have seen a string of high-net worth and high profile tech divorces. Even if they weren’t entirely amicable, high profile couples like Bill and Melinda Gates have managed to keep things relatively private. Not so in the divorce of Allison Huynh and Scott Hassan. Scott Hassan was not a Google co-founder, but wrote Google’s original code. This made him a multi-millionaire by 2004, when Google went public. The divorce dragged on for 7 years before the marriage was officially dissolved in 2020. The couple are still negotiating a settlement agreement to divide all their remaining property and work out some child and spousal support issues. The divorce became even uglier when it was discovered that Scott Hassan had made a revenge website to publicly shame his former spouse.
It is normal for emotions to run high during the divorce process, which can be further complicated by high conflict personality types which if not handled correctly can derail the process. These days, however, celebrities and people of high net worth are choosing to have calmer, more private divorces.
In any divorce, especially where there are a lot of assets, caution is advised. There are specific complications to watch out for in a Massachusetts tech divorce. These divorces can be particularly complicated because income can often be speculative, and spouses’ contribution to the business, intellectual property, or support of the founding spouse can be up for debate. The divorce of Allison Huynh and Scott Hassan is a cautionary tale of what can go wrong in a divorce involving tech entrepreneurs who built a fortune from nothing.
Homemaker Supporting a Spouse
This is a common story in many divorces. The homemaker, often the wife, puts their career on hold to support their spouse as they build their business or creative venture. A Massachusetts tech or biotech pioneer might not make any money in the early days. In the divorce of Scott Hassan and Allison Huynh, Huynh said she often paid for food, travel and entertainment until Hassan paid off $60,000 in debt and made his fortune from Google stock. Hassan claimed that he had actually paid off his debts before the two were married. Huynh pointed out that she put her career on hold to raise the children and assist with the business. In Massachusetts, “equitable division,” means that even if a homemaker didn’t earn the money, their contribution is considered as having a value which entitles them to a share of property in divorce.
Speculative Income
In a Massachusetts divorce, stock options that were earned during the marriage, or a bonus that is earned in the tax year before the couple get a divorce, is considered marital property. Massachusetts is not a community property state, like California, where Scott Hassan and Allison Huynh got divorced. It is an equitable division state. Unlike a community property state, in an equitable division state, marital property does not have to be divided equally, so long as it is divided fairly. This difference often results in considerable negotiation. Speculative income like stock options or a bonus can be difficult to divide, especially if the divorce happens before the company goes public. If you are getting a divorce in Massachusetts and have speculative income in a tech or biotech company or other privately held company, it’s important to be careful about the timing of division of these assets as their value can fluctuate drastically. Spouses may want to receive the income as cash or trade the income for other assets. Your divorce attorney can advise you on the best course of action.
No Prenup
Bill and Melinda Gates divorced relatively amicably despite not having a prenup, however their marital negotiations took several years. Scott Hassan and Allison Huynh didn’t discuss money at all when they got married. Several years later, when Google had made Hassan wealthy, he proposed that Huynh waive her rights to future earnings from Google and receive only 10 percent of his shares in return. Huynh refused the deal and recalled feeling blindsided and hurt. Many tech entrepreneurs have no idea whether their venture is going to make it, so discussing money may not seem important. If high net worth spouses don’t discuss money and don’t have a prenup, it can cause considerable conflict during the divorce.
Being Dishonest About Assets
Unfortunately, when there’s a lot of money, one spouse may attempt to conceal assets in the divorce. Full disclosure of assets is legally required in a Massachusetts divorce, but it doesn’t stop people from concealing assets. Allison Huynh is claiming that Scott Hassan has more than 50 LLCs that hold his real estate and tech investments. Hassan counters that he only has about 20. Huynh also tried to halt the sale of a robotics company in which she was a shareholder. She accused Hassan of undervaluing the company to gain a tax advantage. Hassan has claimed that the company was losing money every month, and other offers for the business had been rejected. With so many complex assets under consideration, the paper trail can be incredibly complex and it might be difficult to prove which spouse is being dishonest, which is what it is important to find an attorney who understand these issues and has relationships with experts who can help find hidden assets and determine the appropriate value of those assets.
Intellectual Property and Shared Financial Interests
When a high net worth tech couple in Massachusetts or another state get a divorce, it’s very likely that a significant portion of their business interests and intellectual property is shared marital property. Very often, the business was started during the marriage and one spouse supported the other during the early stages of the venture. Scott Hassan has claimed that his LLC, Greenheart Investments should not be considered marital community property because it was started with premarital funds. Allison Huynh has claimed that Hassan often blurred the line between his assets and their shared property and that Greenheart constitutes marital property. Inherited property or property acquired before the marriage can be considered separate property in a Massachusetts divorce under the right set of circumstances. However if this property is “commingled,” and mixed with marital funds for a common purpose, it will likely be considered marital property.
When it comes to intellectual property, disputes can be incredibly complex. The distribution of intellectual property during a marriage is not limited to the timing of a patent or copyright. It is considered to be an asset that is cultivated over time. If a spouse works on a project during the marriage, intellectual property issuing from the work that is done during the marriage is considered to be a marital asset. If the spouse worked on the project before the marriage, much of that interest may be separate. Intellectual property is not always limited to licensing fees or royalties earned during a marriage. The court may arrive at a projected sum of future earnings from intellectual property that will continue to earn money. The court may also decide to award the potential income in the future, if and when the value is realized.
Property Settlement After Divorce
Allison Huynh and Scott Hassan were officially divorced in 2020, but are still working out their property division. In some cases it is possible for divorcing spouses to get a “bifurcated divorce.” This allows a couple to legally move on and remarry before they have settled their property division, and/or child support and spousal support issues. In Massachusetts, a bifurcated divorce is allowed with good cause and if it won’t jeopardize the other spouse’s interests. It may, however, be less common in other states like California, where there are many high profile, high net worth couples who need extensive time to work out complex community property issues.
Disparaging Each Other in Public
Sometimes a vengeful spouse like Scott Hassan can take to social media and make negative statements about the other spouse’s reputation. Few spouses go as far as creating a website about their ex, but not everyone handles divorce well. In divorce court, “non-disparagement orders,” are commonly issued to prevent spouses, particularly parents, from lashing out at their spouses in public or in front of their children. In Shak vs. Shak, a Massachusetts court ruled in 2020 however that enforcing non-disparagement orders was an unconstitutional restriction on free speech. The court argued that the injured spouse had the recourse of suing for defamation. In the case of Allison Huynh, any unfair damage to her reputation could be good reason to sue Scott Hassan. Legally however, a judge could not force him not to disparage her. The Massachusetts ruling clarified however that the right to free speech doesn’t mean that a judge can’t take disparagement into consideration during child custody determinations. Unfortunately, however, this could be too late for an entrepreneurial spouse with a damaged reputation. If spouses can come to an agreement not to disparage each other, this could be enforceable.
Consult Your Attorney Immediately
In the divorce of Allison Huynh and Scott Hassan, almost everything that can go wrong in a divorce, did go wrong. As a result, the divorce took place in the public eye and dragged on for 7 years. Massachusetts tech founders and their spouses should be extremely careful to consult an attorney about their options to manage any future conflict. The issues involved in a “high tech” divorce are complex and therefore open to debate. Experienced high net worth divorce attorneys can exploit any loophole to argue that spouses should not get what they deserve. These assets could be part of a business portfolio for both spouses, and any damage to reputation could damage the business interests during the divorce. Call a skilled Massachusetts divorce attorney to seek advice on your strategy.
https://www.nytimes.com/2021/08/20/technology/Scott-Hassan-Allison-Huynh-divorce.html
https://www.nytimes.com/2020/05/09/us/divorcing-parents-have-right-to-post-court-says.html
https://www.freeadvice.com/legal/what-is-a-bifurcated-divorce/
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