Contracts
CEO Owes Ex About $750K in Interest for 12-Day-Late Payment, Conn. Court Rules
Posted May 14, 2009, 04:02 pm CST
By Martha Neil
He's the CEO of Credit Suisse Group AG. So investment banker Brady Dougan should have understood the terms of a divorce settlement with his ex-wife, a Connecticut appeals court says.
Reversing the trial court and enforcing the agreement, the court is requiring Dougan, 49, to pay his wife of 20 years about $750,000 in interest because he made a $7.5 million payment to her 12 days after the June 16, 2006, due date, Bloomberg reports.
Dougan had anted up only $24,999.96 in interest, covering the 12-day period. But the contract called for payment of a full year's interest, at 10 percent, if the payment was made late. And Dougan opted to make use of the money for a year at no interest knowing that the penalty would apply if he failed to make the payment on time, says a 2-1 majority opinion (PDF).
A dissenting opinion (PDF) agrees with the trial court that the interest payment provision of the settlement agreement should have been declared invalid because it was an improper penalty.
A concurring opinion (PDF) was also filed in the case.