How will Jeff Bezos' divorce impact Amazon, and will it cost jobs?

Lars Larson Show - Radio Show
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How will Jeff Bezos' divorce impact Amazon, and will it cost jobs?

Lars Larson: Welcome back to the Lars Larson Show. It’s a pleasure to be with you, and I’m glad to take your phone calls and emails. We’re live on the Radio Northwest Network serving Oregon, Washington, and Idaho, 24 cities in this region with honestly provocative talk radio.  And we’ll get to those calls shortly at 866-HEYLARS. That’s 866-439-5277. Emails go to [hidden email].

The word came this week that the richest man in America - and I checked the numbers this morning, I think he’s still the richest man in America, one of the richest men in the world - is getting a divorce. And, of course, Jeff Bezos and his wife live in Washington State which is a community property state. Not being a lawyer, and especially not a divorce lawyer, I don’t know whether that will fully apply there. But it seems that they will probably have to split somewhere between $125 and $150 billion, with a “b,” dollars. And that will make an interesting situation.  

I’ve invited Dror Bikel on who is a Manhattan divorce attorney and the author of the forthcoming, “The 1% Divorce: When Titans Clash.” Mr. Bikel, welcome to the program.

Dror Bikel: How are you, Lars?

Lars: I’m doing very well. I’m wondering how this is going to go. And from the outside, it sounds as though both Jeff Bezos and his wife, MacKenzie, are saying, “Oh, everything’s copacetic. We’re still friends. We’re still going to serve on charity boards together, and everything is okey dokey, except we’re getting a divorce after 25 years.” Is it likely to stay that way, or what are we going to see here?

Dror: That’s exactly right, Lars. They came out with a press release through Twitter that, “This is going to remain amicable,” that they’re still going to conduct business together and have ventures together going forward. So, the image that they’re trying to project as of now is that this is going to be an amicable divorce. Hopefully, it will stay that way. They have four kids. The kids are younger than 18, so they’re minors under the law. And, it’s the best thing for them that this case remains amicable. So, hopefully, it will stay that way.

Lars: It also sounds as though, because they got married 25 years ago, before Amazon was created, the company that Jeff Bezos created and headed. And his wife was involved in the creation of the company as well. But it sounds as though there was no pre-nuptial agreement as to how they might part if they ever did. So, do you see this one going to court and these two fabulously wealthy people having to expose a lot of their personal finances to the hoy Buloy.

Dror: You know, it should not go to court. There’s so much money there – $150 billion. It would frankly be absurd if they were fighting about money. It’s not like they would have a dispute about who pays for college. It should not go to court. But the interesting issue really has to do with Amazon right -- because most of the wealth is tied up in Amazon, and if Jeff Bezos has to give his wife 50% of his interest, how is that going to affect his voting rights and business trajectory of the most valued company in the world?

Lars: Well, since you’re a divorce attorney, let me ask you on the details on this. He could give her title to half the shares, but she could say, “Look, you’re running the company well. I’m going to let you vote my shares,” and he would still be in control of the company. Unless, someday, the now-divorced couple, she decides, “You’re not running the company well, and I’m taking away my shares,” and literally could snatch control of the company right out from under him. Right?

Dror: That’s exactly right. He’s done an incredible job running the country. He’s created the most profitable country in the world from nothing.

Lars: Or, “company.”

Dror: Amazon. Yeah. And, so, if their interests, to a certain extent, are aligned because if she’s going to be a shareholder, she’s going to still want him to run the company because he’s done such a good job doing it. So, the value of her stock will presumably increase under his leadership even post-divorce. To that extent, their interests are aligned.

But you’re 100% right that should she not like the way the company is being run or in the direction he’s taking it, she could then assert her own rights as a shareholder and vote against him. That is something they’re going to have to work out as part of a divorce settlement, whether she’s going to reserve the right to do that.

Lars: Now, let me ask you something. What is the biggest moneywise, biggest divorce that America has ever seen? Do you know?

Dror: I don’t know the answer to that, but I can tell you there’s billionaires litigate divorces all the time. We recently had a huge divorce in Manhattan worth tens of billions of dollars, and the parties were fighting for years in Manhattan Supreme Court. It happens all the time. And there’s a road map for this. There’s forensic accountants. There’s lawyers. There’s tax lawyers and divorce lawyers. And there certainly is a road map for a billionaire divorce, even as large as this one.

Lars: It’s funny, because you started by saying, “Well, there’s so much money there that it really shouldn’t be a problem.” Because nobody, not MacKenzie Bezos or Jeff Bezos, is going to see their lifestyle change enough… In other words, they’ll still fly in private planes. They’ll still have plenty of money for homes and vacation homes and all that. So, when these multi-billionaires get divorced, what’s the fight about? Is it, “Well, I want $15 billion and he’s only offering me $10 billion?” when it comes down to that?

Dror: Right. So, it’s usually a fight about control. It’s often not about the money, the amount of money. It’s about control. Some party, or both, feel aggrieved for whatever reason. They’re human. They suffer pain, and anger, and aggravation, and disappointment. And that drives the dispute and the conflict, and there’s fighting about control, whether they want control of art, whether they want control of real estate, whether they want control of the children. Whatever it is. That’s usually the precipitating factor that drives these high conflict divorces.

Lars: Let me ask you this. I’m talking to Dror Bikel who’s a Manhattan divorce attorney and the author of “The 1% Divorce: When Titans Clash.” Because these children are under the age of 18, are the courts required to set up, for instance, custody and child support?

I know the judges usually set child support based on how much money somebody makes. So, a lawyer is probably going to pay more in child support in a divorce than somebody who drives a truck for a living. Would they set child support based on the wealth of Jeff and MacKenzie Bezos?

Dror: No. There’s just way too much money there, and I’m sure the Bezos, the parents, have set up trusts for the children. There’s no need to set up some sort of formal child support payment.  But custody is an interesting issue because the press release that was issued through Twitter states that they’ve been living separate and apart for a period of time. So, that tells us that the children know that the parents are no longer living together and that they’re going to spend a certain amount of time with Mom alone and a certain amount of time with Dad alone.  

And if the parents have worked that out, if they’ve agreed on a schedule, that goes a long way in settling any custody disputes. So, it seems like they have substantially worked that out.  Although we don’t know the details, the fact that they have been separated for a period of time suggests that they’ve worked out the issues relating to custody.

Lars: From the outside, do you read this that the reason they made this announcement is a number of press organizations were about to report, and did report this week, that Jeff Bezos has been with somebody else, not his wife, for a period of time?

Dror: It’s hard to tell, but it wouldn’t be surprising. The National Enquirer had apparently been after him. He’s been engaging in an extramarital affair. Whether she knew about it or not is not known, and they have been separated, so it may not have been illicit. It may have been open. We don’t know. But, apparently, the tabloids have been after him and were about to disclose information. So, the timing may not be coincidental. It may be intentional. He may be trying to get ahead of the storyline.

Lars: I just wonder whether or not they value their privacy more or the control and money issues more. It sounds like, from this Manhattan divorce you talked about, that they were willing to throw their privacy out the window because the minute you have one of these extended fights, the public gets to know a whole lot more about very personal details than they ever would if you just sat down and subtled it out.

Dror: You’re 100% right. And the First Amendment allows people to actually go into courtrooms and observe the proceedings. So, whenever there’s a litigation, the press and individuals are allowed to go in and listen and watch. So, privacy goes out the window in many of these cases. So, you’re right. If you’re going to fight, you’re opening up your private life to the public for their criticism and analysis. You have to decide which way you want to go.

Lars: If you had to bet, based on what’s happened so far and what they publicly announced this week, do you think this is going to be settled quietly and behind closed doors or in a courtroom in Seattle?

Dror: I think it’s up to MacKenzie Bezos. It’s really her call. If she’s willing to leave him in substantial control of Amazon and if, in fact, he’s having an illicit affair, if she’s willing to, just for the benefit of the children really, not get into mudslinging, then this will resolve amicably.  And, she should be given a lot of credit if that happens. I actually think that is what is going to happen. I think it will be resolved out of court but mostly because of her.

Lars: That sounds like what’s best for the kids, especially since the kids are not adults yet. Mr. Bikel, thank you very much. We appreciate your time.

Dror: Thank you so much for having me.

Lars: That is Dror Bikel who is a Manhattan divorce attorney, author of the upcoming “The 1% Divorce: When Titans Clash.” You’re listening to the Lars Larson Show.