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COMMONWEALTH OF MASSACHUSETTS

THE TRIAL COURT

PROBATE AND FAMILY COURT DEPARTMENT

Suffolk Division Docket No. SU12D1453DR

INAS NAGUI BASSIOUNI, Plaintiff

v.

M. READA BASSIOUNI, A/K/A

MOHAMED REDA AHMED BASSIOUNI,

A/K/A RAY BASSIOUNI, Defendant

PROCEDURAL HISTORY, FINDINGS OF FACT, AND RATIONALE

(On Plaintiff's Complaint for Divorce filed June 15, 2012) On Defendant's Counterclaim for Divorce filed February 6, 2015)

This matter came before the Court for a bifurcated trial beginning April 4, 2014, for the jurisdictional phase, and concluding on April 28, 2016, for the trial on the merits. The plaintiff, Inas Bassiouni ("Wife"), was present for all but one day of trial and represented by Attorneys Gerald Nissenbaum and Wendy Hickey. The defendant, Ray Bassiouni ("Husband"), was present for each day of trial and represented by Attorneys Regina Hurley and Keith Glidden. Proposed findings of fact were submitted in July of 2016.Upon consideration of all of the evidence, and after assessing the credibility of the witnesses, the Court hereby enters the following.

RELEVANT PROCEDURAL HISTORY

1. On June 15, 2012, Wife filed a Complaint for Divorce pursuant to G. L. c. 208, §1B, alleging that her marriage to-Husband had irretrievably broken down and remained so.

2. On August 24, 2012, Husband filed a "Motion to Stay All Proceedings Except as They Relate to Jurisdiction with Incorporated Memorandum of Law." Husband alleged that he had initiated a divorce in Egypt, where the parties were originally married and where the parties had entered into a "marriage contract." The parties have resided in Boston, however, for the majority of their marriage.

3. On October 18, 2012, the Court entered a Memorandum of Decision and Order staying all proceedings, including discovery, except as they related to the jurisdiction of the Court to hear Wife's Complaint for Divorce. Bassiouni v. Bassiouni, SU12D1453

4. On September 12, 2013, the Court appointed Attorney James De Giacomo to serve as Discovery Master for this case, given the scope of discovery and conflicts over discovery and the multiple motions regarding discovery.

5. On April 4, 9, and 16, 2014, the Court held trial on the issue of jurisdiction.

6. On January 5,2015, the Court entered a Memorandum of Decision and Order on the issue of jurisdiction, finding that the parties had obtained a valid divorce pursuant to Egyptian civil law. The Court declined, however, to extend comity to the Egyptian divorce because the process for obtaining a divorce in Egypt does not comport with Massachusetts principles of equal protection and due process. In the Order, the Court directed the parties to complete discovery for the "second half" of the trial on Wife's Complaint for Divorce by April 24, 2015.

7. On February 6, 2015, Husband filed his Answer to Wife's Complaint for Divorce and Counterclaim for Divorce.

8. On February 17, 2015, Wife filed an Answer to Husband's Counterclaim for Divorce,

9. On February 25, 2015, Wife filed a motion for attorney's fees incurred up until January 5, 2015.

10. On March 4, 2015, Wife filed a "Notice Of Appeal and Plaintiff's Motion To Stay Assembly Of The Record Pending Entry Of Judgment In The Parties' Divorce Case."

11. On March 5, 2015, the Court entered an order giving Husband seven days to file a written response to Wife's motion,

12. On March 13, 2015, filed a-"Verified Motion To Suspend Alimony Pending Entry Of Final Judgment" and "Defendant's Request For An Immediate Hearing On His Motion To Suspend Alimony Filed 3/13/15."

13. On March 19, 2015, Husband filed "Defendant's Response To Plaintiff's Motion To Stay Assembly Of The Record Pending Entry Of Judgment In The Parties' Divorce Case," wherein Husband did not oppose Wife's requested relief.

14. On April 30, 2015, Wife filed a "Motion to Re-open Discovery" so that she might obtain information about Husband's American Express accounts, depose two more of Husband's accountants, request "missing information" that she needed to finish her appraisals, and obtain records regarding Husband's alleged account at Citibank Singapore.

15. On May 6,2015, The court held a Pre-trial Conference. Following the conference, the Courtissued a Pre-trial Order setting trial for January 6, 8, 11, and 15, 2016.

16. On June 12, 2015, the Court issued a Memorandum of Decision and Order denying Wife's motion for attorney's fees filed on February 25, 2015. The Court also reduced Husband's temporary support obligation to $13,500 per month, while reserving for trial the issue of whether Husband had "overpaid" in support during the pendency of the divorce.

17. On June 26, 2015, Wife filed a renewed "Motion for Legal Fees and Costs and for a Limited Re-opening of Discovery" so that she might obtain records relating to Husband's American Express credit card and his alleged accounts at Citibank Singapore. Wife also requested that discovery re-opened so that she might depose Husband’s expert appraisers and two CPA’s who prepared the tax returns for Husband and his company.

18. On July 15, 2015, the Court entered an order inviting counsel for both parties to file a stipulation with the Court regarding re-opening discovery.

19. On August 7, 2015, Husband filed an "Opposition to [Wife's] Motion for Legal Fees and Costs and for a Limited Re-opening of Discovery."

20, On September 4, 2015, the Court held a hearing on Wife's motion to re-open discovery and her second motion for attorney's fees.

21. On September 16, 2015, the Court issued a Memorandum of Decision and Order denying -Wife's Motion for fees. The Court also authorized the Discovery Master to. extend discovery as long as it does not result in postponement of the commencement of the trial on January 6, 2016." The Court stated that it would not order the deposition of expert witnesses unless the Discovery Master found that the answers provided to expert interrogatories were deficient. The Court directed the Discovery Master to provide the Court with copies of all future discovery orders. Prior to the beginning of trial on January 6, 2016, the Court received eight discovery orders from the Discovery Master.

22. On September 30, 2015, Wife filed an "Emergency Motion to Permit Her to Take Video-Conference Evidentiary Depositions Of Certain O of Her Witnesses Who Reside and Work.in Egypt or Spain." The motion refers to six of Wife's own appraisers who she intended to depose by video conference for submission at trial pursuant to Mass. R. Dom. Rel. P. 30A (m). Wife filed a Short Order of Notice in relation to this motion as well.

23. On October 7, 2015, the Court held a hearing on Wife's "emergency" motion to permit 30A (m) depositions, Husband filed his opposition with the Court at the time of the hearing. On the same day, the Court entered an order stating: a. The parties must exchange answers to expert interrogatories concerning valuation by October 16, 2015 (except for valuations relating to Husband's business). b. Requests for further answers must be filed by October 25, 2015. The Discovery Master will rule on sufficiency of the answers, e.- If' there are no requests for further answers,- the-parties must-file written stipulation to valuations by October 27, 2015. d. Wife may record her depositions of her experts for use at trial pursuant to Rule 30A (m) e. Discovery will still need to be completed by December 1, 2015, however, the Discovery Master may extend this deadline, so long as it does not interfere with the start of trial. f. The Discovery Master will oversee the depositions. The Discovery Master is authorized to make rulings on any objections raised at the depositions.

24. The court held trial on the Wife's Complaint for Divorce and Husband's Counterclaim for Divorce over eighteen days with the following sixteen witnesses appearing for the parties:

a. January 6, 2016: i. Michael Grassi (Wife's expert appraiser for 16 East 77th Street) b. January 8, 2016: i. Mr. Grassi (cont'd) ii. Hicham El-Koussi {Wife's expert appraiser for Technoscient)

c. January 11, 2016: 1. Mr: El-Koussi (cont'd) ii. Wendy Trayers (employee of ATI) d. January 13,2016: i. Lamiaa El Meniawy (Husband's expert appraiser for Technoscient)

e. January 15, 2016: i. Ms. El Meniawy (cont'd) ii. Carmen Fernandez Hurtado (Husband's expert appraiser for real property in Spain)

f. January 20, 2016: i. Michael Tucci (outside accountant for ATI) ii. Eric Montague (outside accountant for ATI)

g. January 25, 2016: i. Stephen Bravo (Wife expert appraiser for ATI)

h. January 27;2016: i. • Stephen Bravo (cont'd)

i. January 28, 2016: i. Gregory Story (Wife's expert appraiser for 22 Union Wharf) ii. Wife

j. February 10, 2016: i. Wife (cont'd)

k. February 12, 2016: i. Wife (cont'd)

1. April 13, 2016: i, Wife (coned) ii. Richard Goulet (Husband's expert appraiser for 22 Union Wharf)

m. April 14, 2016: i. Marc Bello ( Husband's expert appraiser for -ATI)

n. April 15, 2016: i, Mr. Bello (cont'd) ii, Rocco Iocco (contractor who worked on 22 Union Wharf) iii. Husband Page 4 of 45 Bassiouni v. Bassiouni, SU12D1453

o. April 20, 2016: i. Michael Vargas (Husband's expert appraiser for 16 East 77th Street) ii. Husband (cont'd)

p. April 21, 2016: i. Jesus Hernandez (contractor who worked on 16 East 77th Street) ii. Husband (cont'd)

q. April 27, 2016: i. Kevin Francis (legal process coordinator for Boston Private Bank) ii. Barbara Searle (loan officer for Boston Private Bank) iii. Husband (cont'd)

r. April 28, 2016: i. Husband (cont'd).

25. On May 18 and 19, 2016, pursuant to Rule 30A (in), the Court watched the DVD recording of Hussein Hassan Kamel Seif s (Wife's expert appraiser for real property in Egypt) deposition with Attorneys Glidden and Nissenbaum present. The Court also viewed the deposition recordings of four other expert witnesses who were unavailable to testify at trial: Gabriel de Cristobal Vivas (Wife's expert appraiser for the real property in Spain); Mostafa Bassyouni (Wife's expert appraiser for real estate in Egypt); Abdel Louis Dawoud Makary - :(Wife's'expert appraiser for personal.property in Egypt) and Abdelfatah-Mohamad' Mohamed Yousef (Husband's expert appraiser for personal and real property in Egypt).

26. Following trial, both parties submitted proposed judgments along with requests for findings of fact and conclusions of law. Both parties subsequently filed motions to strike portions of the opposing party's requests for findings of fact and requests for judicial notice.

FINDINGS OF FACT

Based on the credible evidence presented at trial, the Court finds the following:

Basic Information

1. The Court takes judicial notice of and hereby incorporates the findings contained in the Memorandum of Decision entered on January 5, 2015.

2. The parties were married on December 20, 2001, in Cairo, Egypt. The parties stipulated that this is Wife's second marriage and Husband's third marriage. After the marriage, the parties moved to Boston.

3. There were no children born of the marriage, although each party has adult children - from their prior marriages.

4. The parties last lived together at 22 Union Wharf in Boston, Massachusetts on or about May 1, 2012.

5. Wife currently resides primarily in Europe and Egypt, but she also maintains an apartment in Boston on Garrison Street.

6. Husband currently resides at 22 Union Wharf in Boston, Massachusetts. Length of the Marriage

7. At the conclusion of trial on April 28, 2016, the parties had been married for approximately fifteen years and four months.

8. For purposes of alimony durational calculations, the parties had been married for eleven years and five months on June 15, 2012, when Wife filed her Complaint for Divorce. Conduct of the Parties During the Marriage

9. The Court finds that neither party engaged in conduct during the marriage that had an appreciable detrimental effect on the acquisition or preservation of assets in the marital estate.

10. The parties initially got along well. Husband was a generous financial provider. He paid for health insurance coverage for Wife and her parents for a period of time and Husband allowed his business assistant to make medical appointments for her and her parents. Husband also assisted two of Wife's children from her prior marriage with immigration requests. Wife was a supportive spouse and companion and traveled with Husband on frequent business trips.

11. Over time Wife began to repeatedly accuse Husband of having numerous extra-marital relationships.. However, no credible evidence was put forth regarding any dissipation of the marital estate that occurred as a result of the alleged affairs.

12. One accusation by Wife eventually led to Husband firing an employee from his business.

13. The conduct of the parties that is otherwise relevant to the issues before the Court is detailed hereafter. Age of the Parties

14. Wife was born January 5, 1959. Wife is fifty-seven years old (at the time of trial).

15. Wife was forty-two when the parties wed.

16. Husband was born February 28, 1947. Husband is sixty-nine years old.

17. Husband was fifty-four when the parties wed. Health of the Parties

18. Wife credibly testified that she has high blood pressure. Wife also experiences muscle pain and generalized anxiety. She is able to control her blood pressure and anxiety with prescription medication. Wife was no longer taking Xanax at the time of trial.

19. Husband credibly testified to having high blood pressure, which cannot be well controlled with medication.

20. Husband was also hospitalized in 2008 and 201 I for a stomach blockage. Whereas the 2011 incident resolved on its own, the blockage in 2008 was resolved through surgery. Husband's post-operative stay lasted for three weeks. Wife credibly testified that she was present at the hospital and solicitous about his care, however, Husband often did not want her to remain with him as he found her presence overwhelming.

21. Husband has also undergone elective plastic surgery.

Station in Life

22. Throughout the marriage, the parties traveled extensively between their multiple homes, frequently indulged in fine dining, and drove luxury vehicles.

23. In addition to the marital home in North End waterfront in Boston, the parties kept a townhouse in the Upper East Side -Of-Manhattan and a condo in Cairo.. Wife's family also owns a condo on the Red Sea in Egypt and an apartment in Paris.

24. The parties travelled together during the marriage to Singapore, Egypt, Turkey, India, Italy, and France, often staying at expensive hotel accommodations including several Ritz-Carlton properties. In addition, Wife would travel to Milan at least twice per year with her mother to purchase items for the high-end clothing boutique she owned and operated with her mother. She also purchased inventory in Paris and New York.

25. Wife would return to Egypt for extended stays at least once per year in accordance with the expectations of her family. Husband would usually accompany Wife for part of her visits to Egypt.

26. Husband credibly testified that the confrontation which preceded his filing for divorce in Egypt occurred during a shopping excursion on the Champs-E’lysees in Paris while the parties were on their way to visit family in Egypt.

27. While in Boston, Husband testified to dining nearly daily at "five-star" restaurants with clients. Wife would often join him for dinner meetings.

28. At the beginning of the jurisdictional phase of trial, Husband drove an Aston Martin Rapide that he credibly valued at approximately $165,000 (Ex. 11).

29. Wife states that she drove a BMW credibly valued at $65,000 during the marriage (Ex. 32).

30. The parties stipulated that Husband had a Porsche shipped to Egypt to be garaged there in order to be available for the parties' use in Cairo (Ex. 20).

31, The Court finds that the parties maintained a posh upper-class lifestyle during the marriage.

32. The parties came from very different social backgrounds in Egypt.

33. Although the parties enjoyed an opulent level of spending during the marriage, Husband testified to growing up in a very poor family in what he described as the "slums" of Alexandria.

34. Wife, on the other hand, comes from a wealthy, prominent family in Egypt. Wife testified that she always had the services of cooks, maids, and drivers while she lived with her family in Cairo. Wife specifically testified that she would ring a bell in the morning when she woke in order to be brought a cup of coffee or tea in bed. Husband acknowledged that he was aware of her lifestyle prior to the marriage. . ,

35. Husband was comfortable with her lifestyle and strove to provide an upper-class lifestyle for the both of them. Wife retained domestic help at the parties' Cairo condo.

36. Wife knew that some aspects of her lifestyle would change in Boston after her marriage to Husband and she would need to make some accommodations. While the parties had a maid for the Boston home, Wife did do the food shopping and cooking when the parties did not dine out. Education, Occupation, Vocational Skills, and Employability of the Parties

37. Wife has a chemical engineering degree from Cairo University, although she has never worked as an-engineer. She has also completed some course work towards a degree in interior design. She did not complete courses in Boston as she accompanied Husband on his frequent business travels

38. During the marriage, Wife and her mother ran a high-end women's clothing store, Donna Boutique, with locations in Cairo and Marbella, Spain, from 1993 until it was dissolved in December of 2009 (Ex. 74). Wife transferred her interest in the Cairo store location to her Mother in 2009, while she retained her interest in the Marbella storefront. The boutique in Marbella only operated about one year.Wife and her mother continued to rent out the former shop space in Spain after her clothing business closed. The Spanish store was last rented in 2014.

39. Wife described her role as meeting with designers and purchasing inventory for Donna Boutique's retail stores. As noted above, Wife would travel at least twice per year to Europe to attend fashion shows and purchase new items for the boutiques. Wife would also assist her mother in running the Cairo location during her frequent extended trips to Egypt. During the marriage and between 2002 and 2010 Wife was paid 84,000 Egyptian pounds or about $10,000 U.S, dollars in connection with her work at Donna Boutique.

40. Although Wife discovered that she was issued W-2s from Husband's business, ATI, during the marriage, Wife did not actually work at the company; Husband added her to the payroll without her knowledge. Other than operating her own business with her mother, Wife did not work during the marriage. She remains currently unemployed.

41. The Court finds that Wife is potentially employable as a purchasing agent or store manager for an upscale retail clothing business or is able to engage in some interior design work which she did in Egypt prior to the marriage, although the latter is less likely.

42. Husband earned a degree in mechanical engineering in Alexandria, a master's degree in engineering in Ottawa, and a PhD. in acoustical.engineering from Syracuse University, for which he had received a scholarship.

43. After his graduation from Syracuse in 1976, Husband worked for Avco Research Laboratory in Everett, Massachusetts, where he developed a missile defense system that could theoretically destroy airborne missiles without triggering their nuclear payload by reducing the acoustic shockwaves. After Avco, Husband briefly worked at Stone & Webster in Stoughton, Massachusetts, where he specialized in designing systems for environmental noise control. Husband left Stone & Webster in 1981 to form his own company.

44. Since 1981, Husband has been self-employed as the sole owner of Acoustic assembles loudspeaker warning systems for nuclear power plants, oil refineries, colleges, and military installations. Husband credibly testified that he has also expanded his business to include designing early warning system for areas prone to natural disasters, particularly in Latin America.

45. Husband reports he is in the process of transitioning active day-to-day management of ATI to his son, Tarek, although he intends on retaining a consulting role at ATI.

46. Husband continues to be the face of the company. While he may have cut back on his hours, the Court does not credit Husband's testimony regarding his role as a mere consultant. Husband testified he continues to travel on behalf of the company to meet with clients and potential clients because he believes his personal involvement is essential to building and maintaining trusts with the customers.

47. Husband also testified that he will remain as the president, secretary, treasurer, and director of the company because all of ATI's loans are personally guaranteed by him and if he were to resign from his position as the sole board member, he believes all of the loans would need to be refinanced (although Barbara Searle, a loan officer from Boston Private Bank, indicated that the loans are secured by the assets of the business in addition to Husband's guarantee).

48. Husband also has some experience in construction. Husband worked for a contractor during his studies_ at Syracuse and he subsequently served as his own general contractor in renovating several investment properties in Boston and the marital home in the North End.

49. Husband is currently collecting his full Social Security benefit,

Amount and Sources of Income

50..On her financial statement filed January 6, 2016 (Ex. 32), Wife credibly lists an annualized income of approximately $180,500, including $162,000 .in alimony and approximately $18,500 in dividends from her family's Egyptian business, Technoscient. Wife credibly testified that she did not become aware of her entitlement to receive dividends from Technoscient until the financial phase of discovery in this case. Wife has been receiving dividends since at least 2009, but she believed the money she occasionally received from her father during the marriage were simply cash gifts unrelated to any of the family businesses. Wife uses her dividends to pay a small domestic staff at her Cairo condo. Wife credibly reports that she has no current net rental income from Donna Boutique's former store locations.

51. On his financial statement filed January 6, 2016 (Ex. 31), Husband credibly lists an annualized income of approximately $475,500, including $120,000 from consulting for ATI , $292,000 in rental income, $31,500 in unspecified dividends, and $32,000 from Social Security.

52. As alluded to above, Husband also receives in-kind compensation and dividends in the form of business meals and entertainment with clients, as well as travel, paid for with ATI funds. Wife's expert business appraiser, Steven Bravo, credibly reported that Husband typically charges over $400,000 per year on an American Express Centurion Card ("Black Card") in travel and meal expenses for which he is completely reimbursed by ATI. Husband's statements relating to the Black Card were admitted as exhibits at trial (Exs. 99, 101-105).

53. In addition, ATI provides Husband with medical and dental insurance. Combined Estate of the Parties

54. The parties maintained separate estates throughout the marriage and each party has considerable assets titled in his and her names respectively.

55. The parties maintained a joint-account only for purposes of paying household expenses, to which Husband contributed the majority of the funds, In addition to household bills, the funds were used by Wife to shop for clothes, furnishings, artwork, flowers, and to dine out without Husband. Although Husband was generous in providing Wife with plenty of "walking around money," the Court does not find Wife's testimony regarding her purported $100,000 per year clothing budget to be credible.- Wife's Estate

56. Husband was not aware of the full extent of Wife's property interests until the divorce got underway. A large part of Wife's estate is made up of interests in family assets that are controlled primarily by her father. Wife herself had limited knowledge of the same assets.

57. Other than the Cairo conch and antiques, Husband made no contribution to Wife's Egyptian assets. Technoscient

58. Wife credibly testified that she has a twenty percent equity interest in Technoscient, a company that was started by her father and is still owned by her family in Egypt. Other shareholders include Wife's father, mother, and brother. Wife at the first phase of trial had believed she owned twenty two percent equity interest but I find it to be a twenty percent equity interest.

59. Wife credibly testified that she is not involved in the management of the company, which is controlled primarily by her father.

60. The expert appraisers presented by the parties both generally described Technoscient as an Egyptian company that imports and distributes scientific and optical equipment in Egypt. The two main product lines are surveying equipment and laboratory equipment (microscopes etc.). Technoscient sells to both public and private sector end-users. The profitability of the company depends on the margin between the wholesale price obtained by Technoscient and the sale price to Tecimoscient's customers, Technoscient typically uses a five percent markup. Technoscient has an exclusive license to import and distribute equipment manufactured by "Thermo Electron Company," "GBC Scientific Equipment PTY," "Satorious," "Layca Herbroge," and "Geotech Company."

61. Technoscient leases space in an office building located 15 minutes from Tahir Square in Cairo, which the Court finds to be a prestigious business address. It holds five leases in connection with the operating space.

62. The expert appraisers offered by the parties were both qualified by the Court,

63. Wife's expert appraiser, Hicham El Koussi, valued Wife's interest in Techoscient at 3,300,000 EGP ($421,456 USD)1 using a five year discounted cash flow method,(Ex 94). Mr. El Koussi holds a degree in economics and an MBA in finance (Ex, 87). Mr. El Koussi has been performing valuations for over 10 years and he estimates that he has provided an opinion on nearly 200 businesses. He is currently employed by MH Financial Adv'iSory.The Egyptian government regulates non-- • banking financial activities through the Egyptian Financial Supervisory Authority (EFSA). In order to become Managing Director of MH Financial Advisory, he had to be approved by the EFSA which he was.

64. Mr. El Koussi relied on the financial statements provided by management of Technoscient and conversations with the managers of the company and Wife's father, who is the chairman of the company. Mr. El Koussi also reviewed the articles of incorporation, "commercial registry," and "tax card" for Technoscient.

65. Husband's expert appraiser, Lamiaa El Meniawy, valued Wife's interest in Techoscient using two methods. Ms. Meniawy valued Wife's interest at 30,680,000 EGP ($3,918,263 USD) using the replacement value method. Ms. Meniawy valued Wife's interest at 30,160,000 EGP ($3,851,852 USD) (Ex 108) using a discounted cash flow method relying solely on financial statement provided by management (as that was all she was provided with). Ms. Meniawy has a bachelor's degree in accounting from Cairo University and she is a member of several international tax and accounting societies. She is also certified as a "peer reviewer" by the American Institute of CPAs (AICPA). She is not authorized by the EFSA. _________________________________________________________________________________________________ 1 All of the expert appraisers for the parties' Egyptian assets rendered their opinions of value denominated in Egyptian pounds. As the parties did not stipulate to an exchange rate, the Court will take judicial notice of the historical currency exchange rates published by the U.S. Department of the Treasury and apply a consistent rate of 7.8300 EGP per USD, as reported by the U.S. Treasury for December 31, 2015.

 

66. The Court finds that replacement value is an inappropriate method to apply to an entire business operating as a going concern, The Court will accordingly focus its attention on the experts' competing opinions of value arrived at through the discounted cash flow method of valuation.

67. The court notes two important factors that materially impact the accuracy of the opinions offered by the two experts: (1) the political and social upheaval in Egypt between 2011 and 2014, which was an extraordinary event that greatly affected the company's revenue for a certain period, and (2) the "shadow economy" of Egypt, which undermines the reliability of the financial statements specifically provided by the management of Technoscient and used by the experts to arrive at their opinion of value.

68. Beginning with the political-environmental factor, both experts credibly testified to their hesitation in relying on the financial statements relating to the performance of the company during the period of economic uncertainty between January of 2011 and August of 2013 as an accurate predictor of future performance, due to the volatile climate in Egypt at the time following the ouster of President Hosni Mubarak and the brief ascendancy of the Muslim Brotherhood.

69. Mr. El Koussi credibly reported that recorded sales for Technoscient decreased by 17.1 percent in 2011, increased by 8.9 percent in 2012, increased by 0.9 percent in 2013, and then increased by 53.2 percent in 2014.

70. The Court notes that sales growth between 2007 and 2010, prior to the "revolution," occurred at a compounded annual rate of approximately 14 percent, according to the financial information appended to Mr. El Koussi's report (Ex. 94).

71. For purposes of projecting figure growth under the discounted cash floW method of business valuation, Ms. El Meniawy assumed a simple 21 percent annual growth per year and Mr. El Koussi assumed a compounded 10.5 percent annual growth rate. The Court finds that the true growth potential likely lies somewhere in between the two estimates,

72. With regard to the second factor, Ms. El Meniawy credibly testified about the existence of a pervasive "shadow economy" in Egypt, which is entirely cash-based and generally operates off-the-books. Ms. El Meniawy testified to her opinion, based upon a review of official statistics put forth by the Egyptian government and her experience in auditing companies in Egypt, that the "shadow economy" comprises approximately forty percent of the overall Egyptian economy.

73. Husband testified that his employees' salaries and other office expenses in Egypt are all paid in cash. Wife also credibly testified that she paid all the contractors who renovated the parties' Cairo condo in cash.

74. The Court notes that the existence of a large, cash-based "shadow economy" presents an attractive opportunity to underreport revenue and presently-held assets, both of which would significantly affect the results of a discounted cash flow valuation.

75. With respect to the operations of Technoscient, Husband's expert appraiser was placed at a significant disadvantage. Ms El Meniawy credibly testified that she was not given access to any sales receipts, invoices, or other documents that could have been used to verify the data reported in the company's financial statements, even after she signed a non-disclosure agreement with the company. The Court consequently makes an adverse inference, based upon the management's non-cooperation and suspicious inclination towards secrecy, and finds likely that Technoscient in-fact participates in the "shadow economy" and has revenue that was not included in the company's prepared financial statements.

76. The company also likely has more cash-on-hand than what is reported in the financial statements. If the financial statements provided by the company's management and appended to Mr, El Koussi's report are to be believed, cash-on-hand in 2014 would represent only thirteen percent of total assets and would meet only twenty-seven percent of current liabilities (Ex. 94). This seems like an unlikely scenario for an economy in which cash is the preferred medium of exchange. The Court consequently finds that the company's cash-on-hand is likely much higher than what is reported in the financial statements provided to the expert appraisers.

77. In consideration of all of the above, particularly the likely pernicious underreporting of revenue and assets, the Court finds that a value for Technoscient cannot be determined with much precision.

78. The Court, nevertheless, cannot credit Ms. Meniawy's valuation of Technoscient because of serious flaws in her methodology. Ms. Meniawy (1) assumed an unrealistic twenty-one percent sales growth per year, (2) more than doubled the reported value of assets held by the company without providing any support for her estimate, (3) eliminated all capital expenditures, which likely resulted in an unrealistically large net income, and (4) included the value of Technoscient's leased office and storage space as assets, although company does not have an ownership interest in the properties. This would increase the value of Technoscient by 35 million Egyptian pounds.

79. The Court will accordingly credit Mr. El Koussi's estimate as the more reliable Appraisal for the Wife's interest in Technoscient at 421,456, although the Court-views Mr. El Koussi's estimate to be fairly conservative and the true value of the business may be much higher.

Cairo Condo and Antiques

80. The parties stipulated that Wife owns a condo located in the Zamalek neighborhood of Cairo, after Husband transferred title to her name in 2004. Husband purchased the condo at the insistence of Wife's father for one million Egyptian pounds (approximately $160,000 USD in 2004). Husband spent approximately $700,000 renovating the unit over a three to four year period..

81. Wife spent considerable time and energy decorating and furnishing the apartment with items purchased in Egypt and the United States, including artwork (such as a painting that adorns the ceiling in the unit) and as well as modern and antique furnishings purchased at high-end auction houses. Husband generally provided the funds for the items.

82. Only Husband offered an expert appraiser, Abdelfatah MMohamed Yousef, to testify regarding the value of the Cairo condo.

83, Mr. Yousef credibly testified that the two bedroom condo is located in high-rise building in an affluent neighborhood on an island in the Nile River. The condo also contains a dressing room, housekeeper's room, a storage room, reception area and dining room, living room, high end kitchen and minibar. The neighborhood contains several embassies. Mr.Yousef credibly-testified that the unit contains many high end fixtures, especially in the kitchen area.

84. Mr. Yousef valued the condo at 12,903,000 EGP ($1,647,893 USD) after reviewing three comparable property sales, including one property in the same building as the subject property (though it is not clear when this was sold) and the other comparable does not have a view of the Nile River. Mr. Yousef also valued the fair market rental value at 85,000 EYP ($10,856 USD) per month,

85. Wife testified to her opinion that the condo is worth $1,150,000. Wife did not offer a basis for her opinion other than "internet research." Wife testified to her belief that she could rent out the apartment for $3,000 per month.

86. The Court credits Mr. Yousef 's opinion as to the fair market purchase price of the condo and his opinion as to the fair market rental value,

87. Wife contends that she has incurred a one million dollar obligation to a Marcus Margulies that is secured by the Cairo condo, however, the Court was not presented with any credible evidence of a recorded mortgage on the property. The Court therefore values Wife's equity in the condo at $1,647,893.

88. Mr. Yousef also separately appraised the antique furnishings in the apartment at 2,353,000 EYP ($300,511 USD). Mr. Youslef prepared his appraisal of the ninety-five items with the assistance of an associate, Sanaa Zewar, who has over twenty years of experience in appraising items on behalf of auction houses.

89. Wife's expert, Adel Louis Dawoud Makary, valued the antique furnishings at 714,300 EGP ($91,226 USD) (Ex. 159). While an experienced appraiser there were some instances in his deposition testimony where he stated a value but could not explain why beyond saying that was what the object was worth.

90. After considering Mr. Youser s and Mr. Makary's deposition testimony and reviewing the pictures of the artwork and furnishings stthmittcd by the parties in connection with Mr. Yousers testimony, the Court credits Mr. Youser s appraisal of the Cairo condo antiques.

Agricultural Land in Egypt

91. The parties stipulated that Wife has a twenty-five percent interest in farm land in Egypt. The other owners are Wife's mother, father, and brother. Wife's father pays the taxes on the property.

92. Wife credibly testified that she derives no income from the operation of the farm.

93. Wife credibly testified that a portion of the farm was appropriated by the Egyptian goverment in 2014 to.expand,a-highway. Wife credibly-testified-that the, government paid approximately $400,000 for four acres of the property. The remaining land is approximately 7.5 acres.

94. Wife testified that she voluntarily remitted her $100,000 share of the government compensation to her father. Wife will be charged with constructive continued possession of this money, which constitutes proceeds from the sale of a marital asset received by her after she filed her Complaint for Divorce.

95. Wife's expert appraiser; Mostafa Banyouni;•valued the land .at 9,782,378 EGP ($1,249,346 USD) including the four acres taken by the government. The Court infers that Mr. Bassyouni consequently valued the remaining portion at approximately $800,000.(note 2) Mr. Bassyouni testified that lie viewed the land, questioned local brokers, and examined the irrigation and type of plantation. Mr. Bassyouni also testified that he relied on the appraisal done by the government for the seized portion and his appraisal essentially matches the compensation paid by the government per acre. The Court ultimately rejects this valuation because the amount paid by the government per acre is unlikely to be reflective of the price that would be bargained for in a fair market transaction between a willing buyer and a truly willing seller. 96. Wife admitted that her father has filed a suit in Egypt alleging that the amount paid by the government for the taking was inadequate.

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2 The remaining portion is 7 feddans, 8 carrat, and 20 sehms or 7.368 feddans (Ex. 157). Mr. Bassyouni valued the land at 850,000 EGP/feddan, therefore the Court infers that he would value the remaining 7.368 feddans at 6,262,847 EGP ($799,853 USD).

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97. Husband's expert appraiser, Mr. Yousef, valued the land at 19,452,000 EGP ($2,484,291 USD), not including the acreage taken by eminent domain. In estimating the value of the land per acre, Mr. Yousef relied on the sale of only two properties, both of which were under two acres, which the Court finds to be poor proxies for estimating the potential sale value of the subject property. Both were in different locations. The Court therefore rejects Mr. Yousef s opinion as well.

98. The Court instead finds that the fair market value of the remaining agricultural land is $1,200,000, which represents a reasonable fifty percent premium over the price per acre paid by the government and reasonable adjustment between both experts.

99. The agricultural land in Egypt is not subject to a mortgage. Accordingly, Wife's twenty-five percent interest is worth $300,000.

Villa in Abu Rawwash

100. The parties stipulated that Wife has a twenty-five percent interest in her family's villa located in Abu Rawwash, Egypt. The other owners are Wife's mother, father, 7 ;

101. Wife's expert appraiser, Hussein Wafik Hassan Kamel Seif, valued the villa at 5,786,148 EGP ($738,972 USD) based upon a review of sales for two properties he believed were comparable to the subject property. The two "comparable" properties were both primarily agricultural properties containing a house, horse stables and poultry coops. . .

102. Husband's expert appraiser, Mr. Yousef, valued the villa at 21,400,000 EGP ($2,733,078 USD). Mr. Yousef credibly described the property as a 5,300 square meter compound containing a residential structure, a swimming pool, and a garden. The three story residential structure is approximately 600 square meters with five bedrooms, three bathrooms, a gymnasium, a sauna, a kitchen, a dining room, and a terrace. Mr. Yousef credibly testified that the compound also has a separate structure for security guards and other staff. Mr. Yousef based his valuation upon a review of the listing price for three comparable properties from the area consisting of large residential structures. One of the comparables was a three story residential structure situated on a 3,450 square meter plot. The Court finds that the comparables selected by Mr. Yousef more closely resemble the subject property and therefore are more likely to produce a more accurate estimate of the subject property's fair market value.

103. The Court accordingly credits Mr. Yousef s valuation as the more accurate estimate of the fair market value of the villa.

104. The villa is not subject to a mortgage. Wife's twenty-five percent interest is therefore worth $683,270.

Condo on the Red Sea

105. Wife states in her financial statements filed prior to the jurisdictional phase of the trial that she is a fifty percent owner of a condo located on the Red Sea in Egypt, along with her mother (Ex. 10). Wife and her mother are also specifically identified as the buyers in the purchase and sale agreement for the property executed in December of 2005, which was submitted as an exhibit at trial (Ex. 76),

106. Wife testified during the second phase of trial, however, that she believes title to the property was never effectively transferred to her and her mother. She believes title is still held in the name of the developer, although the Court was not provided with a copy of any of the deeds, or the Egyptian equivalent, relating this property. Both parties instead appeared to concede that there is no deed to the property which leaves the Court somewhat adrift.

107. Relying on the credible but imperfect evidence presented at trial, the Court finds that Wife has either legal title to the property or a potential claim to the property or its value by virtue of the purchase and sale agreement. The Court therefor concludes that Wife's interest in the condo may be included in the marital estate and valued for purposes of property division pursuant to G. L. c. 208, §34.

108, Wife did not offer an expert witness to value the property. On her trial financial statement, Wife values the condo at $153,256. Wife also states that there is no mortgage on the property.

109. Husband's expert appraiser, Mr. Yousef, valued the property at 1,400,000 EGP ($178,800 USD), based upon a review of sales for three comparable properties, including two in the same resort development.

110. The Court credits Mr. Yousef s valuation and finds that the fair market value of Wife's fifty percent interest in the Red Sea condo is $89,400.

Commercial Real Estate in Marbella, Spain

111. Wife has a twenty-five percent interest in two adjacent commercial units located on Antonio Banderas Plaza in Marbella, Spain. Wife and her mother, along with two partners, purchased the units in 2001 to set-up a retail location for Donna Boutique in Spain. The purchase price was $554,508. Unfortunately, the Spanish venture was not quite the success that Wife had hoped for and the store location in Marbella ended up closing within about a year of opening.

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Note 3 Husband submitted a "negative certificate" prepared by the "Real Estate Documentation Authority" for Suez stating that the Authority found no documents relating the Red Sea condo when it queried the records for the developer, Wife, and her mother (Ex. 138).

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112. As noted above, after Wife and her mother closed the Spanish location of Donna Boutique, they have been successful in intermittently renting out the former store location in Marbella. The store space was last rented in 2014. Wife reports a weekly loss on the property of $155 which is paid by her Mother. (Ex 32).

113. Both parties offered expert appraisers who were both well qualified to give an opinion of value.

114. Wife's expert appraiser, Gabriel de Cristobal Vivas, has fifteen years of real estate appraisal experience. He holds a degree in technical architecture and is registered with the Royal Charted Institute of Surveyors. (Ex 156).

115. Mr. Vivas valued the two units at 987,989 EUR4 ($1,075,070 USD) after reviewing the sales of six comparable properties. Wife's expert testified that he was able to determine sale prices by contacting the seller's agents for recently-sold commercial properties in the area. Prices for which properties are sold are not public in Spain.

116. Husband's expert appraiser, Carmen Fernandez Hurtado, valued the two units at 1,515;983 EUR-EUR after reviewing sales of six comparable properties. Husband's appraiser is also a technical architect with a degree from the University of Granada, Spain and is licensed by the Official Association of Technical Architects and Building Engineers and is also licensed by the General Council of Architects of Spain.. Husband's appraiser was not given access to view the interior of the property, but she was able to look through the windows during her site visit. The Court notes that Wife 's expert did not report any latent structural defects affecting the value of the property that would not have been visible from a window observation. The Court accordingly finds that the Husband's expert inability to view the interior appears not to materially affect the accuracy of her estimate of fair market value.

117. In addition Husband's appraiser also used a cost replacement approach which the Court does not find to be as useful a valuation method for this already constructed building which appears in good condition. She calculated the replacement cost of the property at 1,045, 365 Euro.

118. The Court finds that both appraisers used similar methodologies (essentially a comparable sales approach) in estimating the fair market value of the commercial space and neither expert opinion appears to be any more reliable than the other. In reconciling the two expert opinions, the Court will adopt a mean appraisal value for the units of 1,251,986 EUR ($1,362,335 USD) .

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Note 4 Both Spanish experts rendered their opinions denominated in Euros. In converting the estimates to U.S. dollars, the Court applied a consistent exchange rate of 0.9190 EUR per USD, as reported by the U.S. Treasury for December 31, 2015.

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119. The units are not encumbered by a mortgage. Court therefore values Wife's twenty-five percent interest at $340,589.

Bank Accounts and Other Personal Property

120. Wife credibly lists the following account with the following balances on her attested-to financial statement filed January 6, 2016 (Ex. 32): (a) Bank of America (x5213) $7,624 (b) Bank of America (x2659) $284 (c) Bank of America (x3669) $35,012 (d) Citibank (x5053) $349 (e) Banq. Misr.(x8073) $869 (f) CIB (x5956) $1,924 (g) CIB (x3730) $270 (h) Banco Popular (x5881) $230 (i) Banco Popular (x0469) $1 457 Total: $48,019

121. Wife also lists jewelry appraised by DePrisco worth $217,560,

122. In her trial financial statement, Wife also discloses that she owns six fur coats although she does not provide a value for them,

123. The total value of Wife's estate is $4,0.48,698 (plus $100,000 Government taking). Husband's Estate

124. At the tithed the marriage, Husband owned ATI, 22 Union Whirr, and 30 Jeffries Street, as well as two investment properties at 67A Chestnut Street and 180 Beacon Street, Husband subsequently sold the Chestnut Street and the Beacon Street property at some point during the marriage. Husband testified that he also previously owned property in New York City, although it was not clear when he owned the those properties and no documentary evidence was offered in relation to the New York properties (aside from 16 East 77th Street). Husband also claimed he had an "old stock account" which funded his acquisition of some of the property purchased though there is no documentation of this account, when it was acquired, what its value was and what if anything remains.

ATI

125. As noted above, Husband is the sole owner of ATI, a business incorporated in Massachusetts since 1981 that designs and assembles wide-area emergency warning systems. Husband testified that he has either consulted with or provided systems to eighty percent of the nuclear facilities in the United States. More recently, Husband testified that the business has been expanding internationally to service natural disaster prone areas. Husband credibly testified to designing systems for local governments in Mexico, Chile, Peru, and Brazil. Husband testified that ATI has approximately thirty current clients located in the United States, Europe, South America, the Middle East, and Asia. The majority of his clients are in the New York/New Jersey area. Husband business greatly expanded after September 11th, 2001.

126. With respect to Husband's foreign ventures, ATI usually partners with a local company to sell ATI products in the regional market in order to avoid establishing a business presence in the foreign jurisdiction. ATI has partners in Singapore (Wah Loon), Kuwait, Israel, and Brazil.

127. When Husband first started ATI in 1981, he rented office space on Commercial Street in the North End for eighteen months before moving the company into 22 Union Wharf.

128. Husband worked hard to begin the business. Husband initially did mostly consulting work with nuclear facilities due to a non-compete agreement he had signed with his former employer Husband would design the plan for the client who would then accept bids for the actual manufacturing.

129. Husband also attended public hearings to answer questions, and engaging in lobbying efforts to influence safety regulations for nuclear power plants.

130. During the early years, Husband consulted with eighty percent of the nuclear facilities in the United States and helped the Nuclear Regulatory Commission develop regulations to evaluate the safety plans of power plants.

131. Once Husband moved ATI to 22 Union Wharf, he hired an assistant and an engineer. To save money, Husband hired Ph.D. students to complete some of his design work. Husband moved ATI out of 22 Union Wharf in 1988.

132. ATI now operates primarily out 30 Jeffries Street in East Boston, where employees design, assemble, and test equipment before shipping it to clients. The 30 Jeffries Street property is owned by Husband and is leased to ATI. Husband purchased the property in 1988.

133. ATI also maintains a warehouse at 6 Ericsson Street in Dorchester. ATI directly owns the building, at 6 Ericsson Street in Dorchester, which the parties stipulated to valuing at $1,140,000.

134. ATI has 33 employees and designs and services emergency warning systems and notification systems for the campus, community, industrial, and military markets. ATI uses wireless systems that combine audible (sirens and loudspeakers) with visual warnings (lights) linked together using radio and satellite communication technology.

135. ATI develops customized design plans based upon the relative dimensions of the client’s proposed project site. ATI engineers use proprietary software to create an effective system that reflects the specific characteristics of the client's facility. The engineers also develop the software component that will run the systems for the client.

136. ATI has contractors who manufacture the component parts of the hardware systems. Once the component parts are delivered to ATI, employees assemble and test the systems before shipping them to the clients. After the product is delivered to the client, ATI employees provide follow-on training for the clients on system operations and maintenance. ATI also services installed systems. Husband testified that ATI is not paid until the system is installed and tested, and the customer is satisfied and accepts the system.

137. ATI has patented its software system, "Mass Alert." ATI's systems can be operated from on-site control stations and from mobile devices,

138. Husband credibly testified that ATI has back-office employees in Egypt who do coding work for ATI. As noted above, Husband wires approximately $30,000 per month to an ATI bank account in Egypt and then his local agents pay all of the office expenses, including salaries, in cash.5 Husband testified that he uses Egyptian employees for some of the routine coding work because labor costs for software engineers are lower in Egypt compared with the United States. These Costs are deducted on ATI's US tax returns. Husband gave conflicting testimony about whether ATI is registered to do business in Egypt.

139. Husband denies that he paid expenses related to this divorce litigation with ATI funds held in Egypt.

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Note 5 Wife has alleged that Husband has been using the transfers to the Cairo office to divert ATI profits to clandestine off-shore accounts. The Court was not presented with any credible evidence, however, indicating that the amounts transferred by Husband were not actually spent on running the Cairo office. However, Husband had salary, rent, supplies, maintenance and insurance expenses for Cairo.. Wife herself also at least acknowledged the existence of ATI's Cairo office, which she testified to visiting on several occasions. The Court ultimately finds that the amount expended is credible given the skilled technical work done by the Egyptian employees and method of payment is an-appropriate-and reasonable business arrangement given the general customary preference for cash in Egypt, as credibly testified to by Ms. El Meniawy and Husband. The Court notes Husband did not produce much documentation of the Cairo office. Husband testified at trial that he did ask for documents from Cairo and he produced what was given. While he claims he gets a listing of expenses every few months from Cairo, few documents were produced.

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140. Wife credibly testified that she introduced Husband to her family's connections in Egypt, including President Hosni Mubarak's son, which the Court finds was likely helpful in allowing Husband to establish his business presence in Egypt. Wife also helped Husband furnish his business office in Cairo.

141. Husband's primary role at ATI is in business generation. He serves as the primary salesman for the company. Husband testified that he finds opportunities mainly through referrals and leads from existing clients and through following-up on inquiries submitted on ATI's website. Husband testified to having an employee in New York City who works exclusively on identifying potential clients and projects for ATI.

142. Once a potential contract is identified, Husband personally pitches his systems to prospective buyers, whom he will invite to either Boston or New York. Husband testified that his sales presentation typically involves a presentation followed by an invitation to a local restaurant. As noted above, Wife would often accompany Husband at dinner meetings.

143.Husband also hosted clients at 22 Union Wharf. Wife credibly testified to assisting Husband in hosting potential clients in the marital home approximately once per month. Wife testified that she was primarily responsible for decorating the home and acting as a social hostess. She would also occasionally be responsible for cooking dinner for the guests when the parties did not have the event catered.

144. Husband also rtravels to meet clients arid potential clients around the country and around the world. Husband often travels to Miami in order to meet with his South American clients and Singapore to meet with his Asian clients. Wife would frequently accompany Husband on these business trips.

145. Husband has also traveled to Chile and Brazil to explore potential new markets. Wife joined Husband on these trips as well.

146. Husband acknowledged at trial that Wife would often accompany him on his trips.

147. Although Wife made no financial contribution to the company, the Court finds that Wife's contribution towards acquiring and maintaining clients likely had a positive effect on the success of ATI.

148. Husband testified that the company has recently encountered some growth headwinds due to increased competition from less expensive SMS-based warning systems. No testimony or other evidence, however, was specifically offered as to whether the regulatory environment surrounding nuclear power plants, the core of ATI's business, would allow for only SMS-based systems without requiring a redundant physical speaker system as well.

149.In any event, Husband testified to partnering with another company that offers SMS-based systems in order to create an integrated product for clients interested in a physical loudspeaker system combined with an SMS-based system.

150. In applications to extend lines of credit submitted by Husband to Boston Private Bank between 2008 and 2014, Husband consistently valued ATI at $50 million (Exs, 186-191). Husband also admitted that he did not inform Boston Private Bank after his expert business appraiser valued the company at a mere $3 million.

151. Husband formulated his opinion of value based upon the sale of a similar company for $46 million. The Court, however, finds that the $50 million figure is likely an overly-optimistic estimate of value, used by Husband to maintain his line of credit and obtain loans. The parties all appear to agree that ATI's average earnings before taxes was well below $1 million per year making the $50 million figure a fairly unrealistic assessment-of value. The estimate also far exceeds the valuesoffere0y the parties' professionally-trained expert business appraisers.

152. Both parties offered highly-credentialed experts who were each qualified by the Court to give an opinion of value for ATI (Exs, 113 and 152).

153. Mr. Bravo, Wife's expert, is a graduate of Suffolk University and holds a Master of Science in Taxation from Bentley College. He is a principal of Apogee Business Valuations Inc. The company performs business appraisals'and financial analysis for various purposes including marital dissolution. He has written and lectured extensively in this area. (Ex 113).

154. Husband's expert, Mare Bello, is a graduate of Ithaca College and holds a Master of Science in Taxation from Bentley College. He is a partner in Edelstein and Company LLP and specializes in Business Valuation and Litigation Support. (Ex 152.)

155. Both considered the standard of value to be fair or equitable value wherein parties are treated as fiduciaries entitled to equitable distribution of marital assets and not as arms length hypothetical buyers and sellers.

156. Husband's expert appraiser, Mare Bello, valued ATI (including the property 6 Ericsson Street) at $2,955,000 as a going concern. Mr, Bello arrived at the figure following a net asset value approach (Ex,165). As detailed more fully in his report, his process required adjusting book value of ATI assets to actual or estimated fair market value and subtracting out liabilities to reach a net.

157. Wife's expert appraiser, Stephen Bravo, valued ATI at $4,416,000 as a going concern. (note6) Mr. Bravo arrived at that figure following a capitalization of future income approach relying on six years of financial statements. Mr. Bravo did not, however, receive all of the documents he requested-to-perform his valuation. In determining average net income to use in his valuation, Mr. Bravo backed out certain expenses from the income statements provided by ATI. Specifically, Mr. Bravo adjusted Husband's salary to a level consistent with industry peers; reduced the rent paid to Husband for 30 Jeffries Street to an amount consistent with the fair market appraisal for the space; eliminated the rent paid for the New York City apartment owned by Husband; reduced the meals and travel expenses incurred primarily by Husband by twenty-five percent; and reduced the "professional fees" category of expenses by $49,000 following the conclusion of the company's patent infringement litigation. The net effect was a decrease in average annual "operating expenses" from $2,173,545 to $1,519,731. (Ex 118 at 23). In reducing meals Mr. Bravo noted that most occurred in New York or Boston where he maintained a residence and there was a lack of documentation to establish these meals were for business purposes,

158 The Court finds that these adjustments were permissible, reasonable, and appropriate in this particular business valuation where one party is not only the sole shareholder and officer of the subject entity, but he is also the entity's landlord and chief salesman.

159 The Court additionally finds that an income-based valuation method is more appropriate than an asset-based method in this matter, given Husband's testimony about .the nature of his business. Husband testified that although ATI produces some .. "turnkey" systems, the majority of his engagements are for custom-built systems based upon computer modeling his company undertakes to create unique systems that reflect the specific characteristics of the proposed site. The majority of the value of his company would seem to be derived from the engineering know-how of his firm as well as his personal reputation among safety equipment consumers. Additionally, given the nature of his business, it seems his company would be

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Note 6 The Court notes that Mr. Bravo's opinion of value complies with the holding of Bernier v. Bernier, 449 Mass. 774 (2007), in that he did not apply a "key man" discount or any other general marketability discount. 7 The rent paid by ATI to Husband relating to the New York City property varied widely from year to year- 4360,000 in 2011, $80,000 in 2012, $135,000 in 2013, and $120,000 in 2014 (Ex. appears to have bared-no rational relationship to the actual value derived by ATI from occasional use of the parties' living room for casual business meetings. In 2011 and 2014, the exorbitant rent was paid despite the company operating at a "loss." In 2014, Husband's accountants began apportioning the rent on ATI's tax returns because of audit risk concerns they had about deducting the entire amount. The Court considers these payments to be disguised dividends to Husband, which were appropriately excluded from the business expenses account by Mr. Bravo.

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unlikely to carry a tremendous amount of valuable inventory or permanent equipment at any one point in time, especially where jobs tend to be single sales and the manufacturing is primarily done off-site by third parties. It would seem then that an asset approach focusing on the carried inventory and fixed assets of the business would result in a stark underestimate of the inherent value of the company. An income-based valuation method, on the other hand, would be more likely to accurately capture the value of ATI’s particular technological approach ag well as Husband's business reputation and personal relationships, including his relationships with former clients and federal regulators. Husband himself testified to the importance of his personal relationship with Mayor Rudy Giuliani in securing certain contracts in the New York City area, including at the new World Trade Center.

160 The Court accordingly credits and adopts Mr. Bravo's valuation of $4,416,000 for ATI.

161 The Court also notes that a considerable amount of time at trial was consumed by questions relating to ATI's tax returns and, specifically, the propriety of certain business. deductions claimed by ATI that certainly have the appearance of being Husband's personal expenses (i.e. meals and entertainment expenses, travel expenses, car repairs ect.).

162 It is clear to the Court that Husband is attuned to the tax advantages of the current structure of ATI's operations and ownership. In addition to his salary, Husband also owns two properties that he leases to ATI (16 East 77th Street and 30 Jeffries Street) for above-market rent. The result is that ATI is able to avoid FICA withholdings on what is essentially compensation paid to Husband while also providing Husband :- with ordinary. income that. he can offset with depreciation deductions on the leased properties. As alluded to numerous times above, Husband also has ATI pay for many of his personal meals and travel expenses which are then deducted from ATI's taxable income while also being excluded from Husband's taxable income.

163 Wendy Trayers, a bookkeeper for ATI, testified regarding a petty cash account maintained by ATI. She testified that Husband frequently has her write checks drawn on the account which Husband then cashes ostensibly so that he would have cash when traveling for the company.

164 Husband claims that ATI has been audited recently and all of the above-described deductions were allowed by the IRS, however, he was unable to produce any documentation to substantiate this claim and his outside accountants who testified at trial were unaware of any audit taking place recently.

165 The Court also finds it unlikely that an audit by the IRS would not generate a tremendous amount of documentation that would have been easily available for Husband to produce at trial.

166 The Court accordingly does not credit Husband's testimony that ATI has been audited in recent years. The Court declines, however, to venture any further into the labyrinth of the Internal Revenue Code as such an exercise would be unnecessary to decide the issues before the Court. The definition of income under federal tax law is not necessarily the same as the definition of income under Chapter 208. Whether an expense is deductible on a return for an employer or excludable from income for an employee does not dictate whether the Court may consider the expenditure to be perquisite income to an employee-owner in a divorce proceeding. Similarly, expert business appraisers are not confined by tax law definitions in generating their opinions of value so long as the opinion is the product of reliable principles and methods that conform to the professional standards generally governing the practice of the expertise.

167 Wife has also argued that in valuing ATI, the Court should increase the value by $1.2.2 million after adding back$ 2,880,000 for rent paid DR the New York City. _ . property, $4,680,000 for funds transferred to Cairo, $4,680,000 for unsubstantiated meals, travel, and entertainment expenses. The Court declines to do so as the Court has already accepted the adjustments of Wife's expert in performing his business valuation. Secondly, the $12.2 million in value pulled from ATI is presumably already accounted for in increases in values for other the other marital assets (through renovations and mortgage payments funded by ATI) and in Court's finding regarding the high standard of living enjoyed by both parties that might not . have been possible if Husband left more value in ATI.

22 Union Wharf

168. Husband owns a property located at 22 Union Wharf in the North End of Boston, which served as the marital home for the parties. The property is a three-story two-bedroom waterfront residence with three outdoor private decks. It is a north-facing unit on the end of the pier looking directly out onto the harbor. It also has two deeded outdoor parking spaces (Ex. 120). Husband purchased the property, which was originally just a shell of a building, well before the marriage in 1983 for $285,000. Husband continues to use the property as his primary residence.

169 In the first year of the marriage in 2001, a pipe burst in the townhouse causing significant water damage. Wife assisted with the initial clean-up and then hired workers and a cleaning lady to assist with the cleaning efforts until a professional cleaning service's firm was able to finish the work. Insurance covered the repairs and Husband and Wife moved to the Ritz-Carlton while the property was being fixed. Extensive repairs were necessary including new floors, new sheetrock, and new paint. Wife was responsible for packing and unpacking the parties' belongings for the moves.

170 In 2009, the parties gutted and renovated the townhouse. Wife credibly testified to assisting the architect in sketching out an open floorplan for the unit and being the one to suggest that the parties install a dumbwaiter. Wife also credibly testified to picking out furnishings for the home. She would then give the product number to Husband's assistant at ATI to order the items.

171 Husband used his license to act as the general contractor for the renovations. Husband obtained permission from the condo association for the construction. Husband also obtained the necessary permits and hired all the subcontractors, including carpenters, plumbers, and electricians, to complete the work. He also testified to revising the architect's plans for the unit during construction.

172 During this construction in 2009, the parties lived in an apartment in Chinatown.

173 The expert appraisers offered by the parties were both well-qualified to give an opinion of value for 22 Union Wharf.

174 Husband's expert appraiser, Richard Goulet, is a certified general real estate appraiser and owner of the Appraisers Group. His appraisals focus on residential single family and multi-family houses in eastern Massachusetts.

175 Mr. Goulet, valued 22 Union Wharf at $2,725,000, based upon a review of four comparable sales, including two units in the same complex as the subject unit (Unit 25 and Unit 18).

176 Unit 18 at Union Wharf sold in August of 2015 for $2.725 million, to which Mr. Goulet made no adjustments. This unit was part of a combined contiguous property with Unit 19 when it sold. The sellers apparently agreed to restore the interior wall between Unit 19 and Unit 18. In applying the sales comparison method, Mr. Goulet adjusted the per square value up 0.7 percent. The Court finds that the anticipated conversion costs for the buyers in turning the previously combined unit into a stand¬alone unit likely depressed the sales price on this unit making it a poor proxy for estimating the value of Unit 22.

177 Unit 25 at Union Wharf sold in August of 2014 for $2.7 million, to which Mr. . Goulet made no adjustments. Unit 25 is located in the same structure at the subject unit.

178 Wife's expert appraiser, Gregory Story, is a certified real estate appraiser in Massachusetts and New Hampshire. Mr. Story owns A.M. Appraisals Associates, Inc. He is the city appraiser for many communities north of Boston. He has conducted 1,000 appraisals and testified in courts throughout Massachusetts on nearly fifty occasions.

179 Mr. Story valued 22 Union Wharf at $2,900,000, based upon six comparable sales, including two at Union Wharf (Units 25 and 214).

180 Mr. Story also relied on sale of Unit 25 which sold in August of 2014 for $2.7 million, as noted above. In applying the sale comparison method, Mr. Story adjusted the per square foot value up five percent on Unit 25 because it is an interior unit with less natural light than Unit 22 which is a corner unit at the end of the pier,

181 Unit 214 at Union Wharf was sold in March of 2014 for $2.5 million. In applying the sale comparison method, Mr. Story adjusted the value up fifteen percent on Unit 214 as it lacked the two fireplaces of the subject unit and had one-and-a-half less bathrooms.

182 Mr, Story also testified that a third unit at Union Wharf, Unit 6, sold after he drafted his initial report. Mr. Story testified that Unit 6 sold in August of 2015 for $2,896,000. Upon learning of this sale, Mr, Story adjusted his opinion of value from $3 million (Ex 120) to $2.9 million.

183 The Court credits Mr. Story's opinion of value for 22 Union Wharf.

184 Husband credibly lists the mortgage balance on 22 Union Wharf as $1,693,849, as - - of January 6, 2016. Consequently, Husband's equity in 22,Union Wharf is $1,206,151.

185. Mr. Story also offered an opinion as to the value of the property in 2001 of $1.5 million by looking at the available sales data for the North End waterfront between December of 2000 and March of 2002, Mr. Story was unable to offer an opinion as to the condition of the property in 2001 for purposes of selecting meaningful comparables.

16 East 77th Street

186 Husband owns a property located at 16 East 77th Street in New York City. Husband credibly described the townhouse property as a six unit apartment building located one block from Central Park between Fifth Avenue and Madison Avenue. The property is in the Upper East Side Historic District and close to various cultural and recreational amenities, The Court finds this to be a highly desirable location. Page 29 of 45 Bassiouni v. Bassiouni, SU12D1453

187 Husband credibly testified that he bought the building in 2006 for approximately $10.4 million. Husband financed the purchase partially with the proceeds from the sale of premarital assets. Husband testified that lie paid between $2.5 and $3 million in cash derived from the sale of an "old stock account," although no evidence of the account was offered at the time of trial. The rest of the purchase price was obtained through a mortgage, the balance of which was $5,374,939 on November 30, 2015 (Ex. 70). Title is held in the name of 16E77 LLC.

188 Husband "inherited" two rent-controlled tenants when lie purchased the property. One of the rent-controlled tenants subsequently agreed to relinquish his rights in exchange for $500,000. The other rent-controlled tenant was less agreeable and remains a resident of the building. Husband typically has market-rate tenants in four of the other units.

189 The parties spent considerable time and money renovating the building after its purchase in 2006. Husband testified that the renovations cost $1.5 million and was also funded, in part, by "an old stock account." Jesus Hernandez, a contractor who worked on the renovations, testified that he was paid for his work by checks issued by ATI and signed by Husband. Wife testified that she also paid some of the contractors in cash provided by Husband.

190 The parties used the top-floor sixth unit of the building as a personal residence whenever they travelled to New York City. Husband testified that he would usually go to New York once per week, typically staying in New York from Thursday to Sunday. Wife testified that she would usually accompany him on these trips. - .

191 The parties re-modeled the top floor unit by adding an additional floor to create a . two-story penthouse complete with kitchen, dining room, living room, three bedrooms, an in-unit washer/dryer, and three-and-a-half bathrooms. The parties redesigned the kitchen and completely gutted the bathrooms.

192 Although Husband hired a local general contractor because he is not licensed as a general contractor in New York, Husband brought in contractors from his Boston renovations and oversaw all of the work efforts, acting as the de facto general contractor for the renovations. Husband was involved in obtaining the requisite permits and drafting the construction plans. Husband testified to the rigorous permitting process required to build the additional floor because the property had been designated as a historical building.

193 Husband credibly testified that he was able to obtain discounted bathroom fixtures from a hotel across the street that was refurbishing its own bathrooms.

194 Wife credibly testified that she was also substantially involved in the renovation and refurbishment process for the New York City property. Although the parties wisely utilized the services of a professional architect to design and draft the construction plan, Wife helped select materials (marble for the bathroom and tiles for the kitchen ect.), cabinets, fixtures, appliances, and paint colors. Wife also shopped in upscale stores like Tepper Galleries and Roche Bobois for furniture and other decorative elements like carpets, chandeliers, a dining room set, sofas, and kitchenware.

195 Husband has claimed that Wife was not actively involved in the renovations for the New York property because she was preoccupied with renovating the Cairo condo and the Red Sea condo during this period from 2006 to 2007. The Court does not credit this testimony, however, as the Cairo condo was purchased in two years earlier in 2004 and the Red Sea condo was purchased a year earlier in 2005. Her passport also indicates that she did not spend significant time in Egypt in 2006 or 2007 (Exs. 24, 25).

196 The Court finds that Wife was actively involved in the renovation process and she enjoyed decorating the parties' units, as evidenced by her background in interior design.

197 Husband credibly testified that he sometimes used living areas of the first floor of the penthouse unit as a meeting space for ATI clients in the New York City area, although he did not keep a record of which clients met with him there. ATI previously rented an apartment in New York City for $9,000 per month before Husband purchased the property at 16 East 77th Street, although the Court finds that his decision to purchase the property was primarily a personal rather than business decision, Nonetheless the purchase was consistent with his level of financial 'success and accomplishment.'

198 As noted above, Husband credibly testified that ATI has many clients in the region around New York City. Husband's clients include the new World Trade Center, Indian Point Nuclear Power Plant, Hudson County in New Jersey, the Port Authority of New York, Lincoln Center, the United States Military Academy at West Point, Kinder Morgan, Amtrak, Long Island University, Westvaco, Abacus, and Desktop Alert (among others). Husband also meets with some of his international clients in New York, including representatives from Kuwait, Israel, Brazil, and Peru. Husband also frequently meets with his installation contractor for the New York/New Jersey region, Kevco Electric.

199. Husband testified that when he is unable to meet with clients and potential clients at the client's office in New York, he prefers to meet at the parties' New York residence rather than at a hotel conference room because Husband believes that the residence provides a more comfortable and relaxed environment for his business meetings, thereby potentially increasing prospective clients' receptiveness to his sales presentation. Husband also wants to avoid the potential headache of trying to book a meeting space at the last moment when a sales opportunity suddenly presents itself.

200. Husband typically meets with potential clients during the morning and then follows-up the presentation by taking the clients out to lunch at a nearby restaurant. The Court concurs with Wife’s position that top floor living quarters were not used for business purposes.

201 As noted above, Wife credibly testified that she often accompanied Husband on his weekly trips to New York. Wife testified that she would often spend some of the time shopping or meeting with designers for her business. Wife testified that she filled one of the closets in the unit occupied by the parties with designer clothes for Husband,

202 Husband's expert appraiser, Michael Vargas, valued the property at $15,000,000 (Ex 161). Mr. Vargas is principal and co founder of Vandebuilt Appraisal Co. with over 20 years experience in appraisal and valuation. Mr. Vargas opined, that the highest and best use of the property would be as individual condos. Mr. Vargas then applied a gross sell-out analysis relying on comparable condo sales... Vargas' . "comparables" included properties located in Midtown and as far away as Harlem and Hamilton Heights. Mr. Vargas concluded that the aggregate sale value for all six of the units as individual condos would be $25,594,000. Mr. Vargas then subtracted the estimated cost of renovations (although he did not view the inside of five of the units), marketing, and closing costs, as well as a twenty percent "entrepreneurial profit" to arrive at his $15 million figure.

203 Wife's expert appraiser Michael Grassi, valued the property at $27,000,000. (Ex 1'12). -Mr. Grassi is Executive Vice-President-of Miller Samuel Inc.• He, has close to -.¬20 years experience in appraising and has testified as an expert in various New York courts on valuation. He too was unable to view the interior of all the apartments. Mr. Grassi opined that the highest and best use of the building would be as a single-family townhouse. Mr. Grassi arrived at his opinion of value by combining a comparable sales-based approach with an income-based approach. Mr. Grassi's comparables were all located in the Upper East Side. Mr. Grassi then applied a fifteen percent discount to his assessed value in order to account for the presence of the rent-controlled tenant.

204 The Court also notes that Husband consistently valued the New York City property at $25 million on his loan applications to Boston Private Bank submitted between 2008 and 2014 (Exs. 186-191).

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Note 8 In determining the potential sale value of the unit occupied by the rent-controlled tenant, Mr. Vargas utilized a capitalization of future income valuation method based upon the expected rental income.

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205. The Court credits and adopts Mr. Grassi opinion of value. The Court finds that his methodology represents a reasonable and reliable approach and the fifteen percent discount appropriately accounts for presence of the rent-controlled tenant since it essentially contemplates a generous $4.7 million buyout for the holdout tenant deducted from the subsequent gross profits.

206 Husband credibly lists the mortgage balance on the 16 East 77th Street property as $5,299,939, as of January 6, 2016, Accordingly, Husband's equity in the 16 East 77th Street property is $21,700,061,

30 Jeffries Street

207 Husband owns a property located at 30 Jeffries Street in East Boston. The building is used by ATI for its business operations. Husband leases the building to ATI for $320,000 per year (Ex. 31). Husband sometimes forgives part of the rent when ATI does not have a sufficient cash flow to make the payments.

208 The parties stipulated to valuing 30 Jeffries Street at $2,075,000.

209 Husband credibly lists the mortgage balance on 30 Jeffries Street as $1,006,827, as of January 6, 2016. Therefore, Husband's equity in 30 Jeffries Street is $1,068,173.

210 Wife made no contribution to this asset.

2201 Collins Avenue, Units 627 and 629

211- Husband owns two condo units located at 2201 Collins Avenue in Miami, Florida; at the W Hotel.9 Husband purchased the units in October of 2011 for $2.4 million, although Husband could not recall the source of the funds used to purchase the units. The mortgage documents relating to the existing loan secured by Unit 629 for $800,000 are dated February 1, 2012.

212 The units are actually a connecting studio and one-bedroom units that can be rented separately or together.

213 The parties stipulated to valuing the units at $950,000 (Unit 627) and $1,750,000 (Unit 629).

214 Husband credibly lists the mortgage balance on Unit 629 as $643,047, as of January 6, 2016. Accordingly, Husband's equity in Unit 629 is $1,106,953.

215 Unit 627 is unencumbered by a mortgage.

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Note 9 Unit 627 is titled to a "Tarek-Adam LLC" (Ex. 64), however, the parties do not appear to dispute that Husband is owner of this unit and that the property should be included in the marital estate

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Investment, Retirement, Savings, and Checking Accounts

 

216. Husband lists the following accounts with the following balances on his attested-to financial statement filed January 6, 2016 (Ex. 31): (a) Bank of America (x5690) $2,274 (b) Citibank (x2329) $9,165 (c) "B of A" (x9067) $23,130 (d) Citibank (x8746) $38,068 (e) Citigold (x6050) $1,931,221 (f) Citigold (x2843) $3,176 (g) "B of A" IRA (xxxx) $19,228 (h) ATI Def. Contribution Plan (x1633) $140,766 Total: $2,167,028

217 The total value of Husband's estate is $32,614,366.

218 There was much conflict during the discovery phase of this matter over whether Husband or ATI maintains a bank account at Citibank Singapore. Wife testified to her recollection of overhearing &telephone conversation prior to the parties' - separation in May of 2012 in which Husband allegedly discussed moving funds to a bank account in Singapore. Wife also credibly testified to Husband giving her a credit card issued by Citibank Singapore during the marriage. Wife specifically credibly testified that she used the Citibank Singapore card to purchase a Hermes purse in Paris just prior to the parties' May of 2012 separation, a purchase that does not appear on any of Husband's American Express Black Card statements (Ex. 102).

219 Husband, on the other hand, testified emphatically that neither he nor ATI currently maintains nor ever maintained a bank account at Citibank Singapore. Husband claims that all payments to ATI from its Asian clients are made through a local partner company, Wah Loon, which then wires the funds to ATI's account at Boston Private Bank. Husband also denied that he ever had a credit card issues by Citibank Singapore, although he admitted that he was once given a pre-loaded "curtesy card" by one of his Asian clients, however, he only used the card for three months.

220 The Court also notes and takes judicial notice of the Discovery Master's Order dated December 17, 2015, in which the Discovery Master describes a letter sent in November of 2015 from Citibank Singapore to Husband's counsel stating that the bank has -no record of an account currently held in the name of Ray Bassiouni (and alternate spellings) or ATI (and alternate spellings).

221 The Court accordingly finds that Wife's recollection of a conversation she overheard in which Husband (a party-opponent) referenced a Singaporean bank account is insufficient evidence for the Court to conclude that there is an account currently in existence that would be subject to division in this proceeding. 222 The Court, howeve4-notes that Husband-has-hindered-an attempts to gather necessary information to confirm the non-existence of the bank account, Husband refused to sign an authorization that would have allowed Wife to request documents directly from the bank (after Wife's attempt to serve the bank with a third party subpoena was unsuccessful). Wife instead had to make repeated requests for documents through Husband, which he initially ignored until the Discovery Master compelled Husband's cooperation. Husband then finally passed on requests for documents to the bank through local counsel in Singapore at the eleventh hour in October of 2015, two months before the beginning of trial.

Liabilities of the Parties

223 Wife lists the following unsecured liabilities on her attested-to financial statement (a) Hussein Ngi.ri (father) $819,851 (total) (b) Marcus Margulies $1,709,000 (total)° (c) Inas Eldeghedy $40,000

(d) Al Kamel Law Office $445,264 (e) Mintz Levin $53,040 Total: $3,067,155 224 Husband credibly lists the following unsecured liabilities on his attested-to financial statement filed January 6, 2016 (Ex. 31): (a) NYC Finance (prop. tax) $140,141 (b) Miami-Dade County (prop. tax) $47,007 (c) Pacific Pluming $12,500 (d) ATI (officer loan) $109,933 (e) Citigold (margin loan) $981,870 (1) Hoda Bassiouni $98,00011 (g) Verrill Dana $475,90612 Total: $1,865,357

 

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10 Wife testified that one million dollars of her loan from Mr. Margulies s secured by an unrecorded mortgage on the Cairo Condo. While the Court did not Ceduce the value of Wife's equity in the condo as a result of the unrecorded obligation, the Court did consider the note in determining Wife's current and future needs.

II Hoda Bassiouni is Husband's sister. The loan was apparently used to finance part of the Egyptian divorce litigation.

12 1n his post-trial submissions Husband states that he now owes $938,267 to Verdi Dana.

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Wife's Needs

225. Wife credibly reports her post-separation weekly expenses as $3,176 on her attested-to financial statement filed January 6, 2016 (Ex. 32). This amount includes $1,164 per week in rent for her Boston apartment on Garrison Street where she admittedly spends little time, as well as $250 per week on meals and $464 per week on clothing (in addition to $190 per week on housekeeping and a driver in Cairo).

226 The Court notes that the approximately $60,528 per year that Wife spends on rent for her Garrison Street apartment far exceed the likely cost of staying a hotel during her court appearances in this divorce proceeding. Excluding her rental expenses in Boston, the Court. finds that Wife's reasonable expenses total approximately $105,000 per year.

227 Spending $105,000 per year, Wife testified that she is still able to dine out frequently with her friends and family and travel around the globe.

228 Wife testified that she spends considerable amounts of time living with and traveling with a Marcus Margulies from London, England. Wife described Mr. Margulies as a "close friend," Wife testified Mr. Margulies is seventy-four.

229 In the past two and a half years, she and Mr. Margulies have travelled to Mauritius, Alaska, Uruguay, Argentina, Brazil (for the World Cup), Italy, and Switzerland. Wife testified that Mr. Margulies typically pays all of the pair's travel expenses. Wife testified that Mr. Margulies also pays for her expenses, including airfare, when she travels to London to visit him.

230 Wife testified to her intention of re-locating to New York City and buying a home there at the conclusion of the divorce proceedings in Massachusetts.

Husband's Needs

231 Husband credibly reports his weekly expenses as $4,977, excluding the temporary alimony paid to Wife and the $323 per week he voluntarily pays to his other former spouse in alimony (Ex. 31).

232 Husband reports a net weekly income of $8,213 (Ex. 31). Husband's true income is considerably higher once personal expenses run through his business are considered.

233 If Husband were to stop receiving his consulting income from ATI, his rental, investment, and Social Security income would still total $6,830 per week (pre-tax)

234 The Court finds that Husband has enough reasonably secure income to meet his own needs for the foreseeable future.

Contribution of the Parties to the Acquisition, Preservation or Appreciation in Value of the Parties' Respective Estates and the Contribution of Each of the Parties as a Homemaker

235 Wife introduced Husband to her family's contacts in Egypt, including President Hosni Mubarak's son, which likely helped Husband establish and maintain his business presence in Egypt despite the recent tumult.

236 Wife spent time and energy decorating and refurnishing the parties' North End home and the New York City home with artwork, furniture, and flowers.

237 Wife joined Husband at business dinners and hosted existing and potential clients at the marital home in Boston and at the parties' New York City home.

238 Wife joined Husband on his business trips.

239 When the parties did not dine out, Wife would cook dinner.

240 Wife dropped off and picked up Husband's dry-cleaning. Wife packed Husband's bags far• his business trips.

241 Wife shopped for and helped choose Husband's clothes, filling his closets with fashionable designer apparel. Wife managed his daily medication and vitamin regime.

242 Wife cared for Husband when he was stricken with a stomach blockage.

243 Husband was the primary financial provider for the parties. He was extremely generous with Wife and her family. Husband also supportive in facilitating Wife's work with Donna Boutique by financing her trips to Europe and Egypt, as well as joining her on her shopping excursion in New York and Paris.

Opportunities for Each of the Parties to Acquire Future Assets and Income

244 The Court finds that Wife has a promising ability to continue to grow her net worth through passive investments (such as rental properties and fixed income securities) and entrepreneurial ventures like Donna Boutique, as well as through inheritance from her parents and gifts from family and friends. Wife has only one sibling and her parents are quite wealthy. Her mother maintains a rented apartment in the Claridge Hotel on the Champs-Elysées in Paris as well as vacations homes in Spain and on the North Sea.

245 The Court finds that Husband has a demonstrated ability to grow his net Worth through passive investments and compensation from his successful business.

Amount and Duration of Alimony Awarded

246. The Court does not award alimony to Wife. In consideration of the division of property contained in the attached Judgment of Divorce, the Court fundamentally finds that both parties will be able to independently maintain a comfortable standard of living similar to the marital lifestyle through income derived from their assigned assets. Wife will have significant liquidity available to her and with the assistance of a financial advisor should be able to structure a portfolio to generate income to meet her needs.

247 Husband is also at the customary age of retirement and has credibly testified to his intention to step-back from active management of ATI (although it does not appear that he will suffer any precipitous decline in income as a result of his retirement).

248 The Court also notes that general term alimony in this case would constitute a relatively minor transfer of value between the parties compared to the size of the parties' combined estates—$1.22 million' in the context of a $37 million combined estate.

249 Conversely, the Court of course considered the absence of alimony in crafting the division of property reflected in the attached Judgment of Divorce.

250 Additionally, each party has sufficient assets to provide their own health insurance,

RATIONALE

This is a marriage of moderate length. While the parties maintained their assets separately, they worked together in a social partnership to attain a comfortable lifestyle and advance Husband's business interests. Theirs vas also initially a genuine romantic relationship marked by mutual affection between the parties. Wife attended to the details in the home like keeping the marital home well-stocked with chocolates that she knew Husband enjoyed. Husband was willing to indulge Wife's family whenever they came to visit. The Court is satisfied, however, that the marriage has been irretrievably broken-down for some time due to no fault of either party. Accordingly, the Court shall grant the parties a divorce pursuant to G. L. c. 208, § 1B. The primary issues remaining in this matter are division of the parties' combined assets, "re-imbursement" for temporary alimony, and attorney's fees.

Property Division

In dividing the combined estate of the parties pursuant to a divorce, the Court is tasked with making an "equitable" division, which does not necessarily require a strictly "equal"

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Note 13 For purposes of the alimony duration calculation, the parties were married for eleven years and five months (137 months). Pursuant to G.L. c. 208, 49 (b)(3), the maximum duration for general term alimony would be eight years (96 months). If the Court were to order general term alimony of $152,000 per year (one third the difference of $475,500 and $18,500), the total amount of alimony received by Wife would be $1.22 million, before taxes.

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division of the parties' combined assets, See Williams v. Massa, 431 Mass. 619, 626 (2000). The Court is not required to follow any particular mathematical formula in arriving at an equitable division. See Bacon v. Bacon, 26 Mass. App. Ct. 117, 120 (1988). The Court is also not required to afford equal weight to all of the factors contained in G, L. c. 208 § 34, so long as they are all considered. See id. at 120-22. Amount and duration of alimony is an additional factor to consider in making an equitable division under G.L. c 208 s 34. Hassey v. Hassey, 85 Mass. App. Ct 518, 523 (2014). Propoerty divisions are not modifiable in the future Drapek v Drapek 399 Mass 240, 244 (1987).

Additionally, the assets in the combined estate subject to division may include premarital assets and the Court is not constrained to considering only the marital portion of the appreciation in value for those assets. See Brower v. Brower, 61 Mass. App. Ct. 216, 218 (2004); Moriarty v. Stone, 41 Mass. App. Ct. 151, 156-57 n. 4 (1996).

In this case the Court specifically declined to value only the marital portion of appreciation for the assets because a reliable premarital value was not established for all of the premarital assets (including Husband's business) and such a calculation would be unfair under the circumstances of this cases as Husband sold several of his premarital assets to purchase and renovate marital assets thereby losing a large portion of his premarital basis, whereas Wife has preserved her entire premarital basis in the family assets held in Egypt." Multiple experts testified herein. The Court may accept one reasonable opinion and reject another. Fechtor v Fechtor, 26 Mass. App. Ct. 859 , 863 (1989).

The Court considers that each party has been previously married with children, that they married later in life and each came to the marriage with assets which they largely maintained separately. As in all cases, the parties' respective contributions to the marital partnership provides the touchstone for crafting an equitable distribution, with contribution to the marriage measured as a whole as opposed to on asset by asset basis. See Moriarty, 41 Mass. App. Ct. at 157; Putnam v. Putnam, 7 Mass. App. Ct. 672, 674-75 (1979). In many ways, this was a typical marriage in which each party contributed to the marital partnership in-valuable but-different ways. Husband was the primary financial provider and was very generous and supportive when the marriage was ongoing. Husband underwrote Wife's shopping and he also even participated in her shopping excursions. Wife was able to purchase fashionable clothing and expensive jewelry. She dinned at fine restaurants and travelled around the world, including yearly visits with her family in Egypt. She essentially wanted for nothing. Wife, for her part, was Husband's social partner. Although Husband has generally failed to acknowledge Wife's contribution to his personal success, it is clear to the Court that she had a meaningful role in helping Husband attain and maintain the lifestyle he now enjoys, which deserves recognition. Wife introduced Husband to her family's impressive circle of influential contacts in the Egyptian State and society, which undoubtedly helped secure Husband's continued business presence in Egypt. In addition, Wife was supportive in Husband's efforts in dinners and graciously hosted clients at the marital home, which she decorated with chic high- end furnishings and artwork, as well as fresh flowers. Wife also accompanied Husband on his

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Note 14 Post-separation appreciation was also included for the simple reason that a value as of May, 2012, was not provided for any of the assets.

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business trips and shopped for his designer clothes. While it is difficult to quantify Wife's exact contribution to Husband, she essentially helped Husband cultivate an image of cosmopolitan refinement that he was then able to present to potential clients from around the globe. Wife was also available for Husband when he became ill with his stomach issues and she attended to his needs while he was in the hospital. In crafting an equitable division of property, reasonable entitlement to a comfortable standard of living comparable to the marital lifestyle, albeit slightly more modest, going forward. See Richman v. Richman, 28 Mass. App. Ct. 655, 661 (1990); Bacon, 26 Mass. App. Ct. at 120-22. In the case of high net-worth couples, that objective is most effectively accomplished through the division of income-producing assets rather than through alimony. See Rosenberg v. Rosenberg, 33 Mass. App. Ct. 903, 905 (1992); Bacon, 26 Mass. App. Ct. at 122; see also G. L. c. 208, § 53 (c)(1) (excluding certain passive investment income from consideration in awarding alimony).

After careful consideration of all of the factors identified in G. L. c. 208, § 34, particularly the parties' respective contributions to the marital partnership and Wife's present inability to independently meet her own needs at a lifestyle comparable to that of the marriage, the court will allow each party to retain their separate estates, however, the Court will also order a payment of seven million dollars from Husband to Wife:The result will be an equitable division of property that appropriately recognizes Wife's contribution to Husband, his business, and the parties' homes. The ordered transfer will also allow Wife to pay off her liabilities and adequately support herself in the future through income derived from her assigned assets like the Cairo condo, which Wife may choose to rent out. The effect of the transfer will be to leave Wife with approximately thirty percent of the parties' combined estate calculated as follows:

Husband's Estate ATI $4,416,000 22 Union Wharf, North End $1,206,151 16 East 77th Street, NYC $21,700,061 30 Jeffries Street, East Boston $1,068,173 2201 Collins Street, Miami Unit 627 $950,000 Unit 629 $1,106,953 Bank of America (x5690) $2,274 "B of A" (x9067) $23,130 Citibank (x2329) $9,165 Citibank (x8746) $38,068 Citigold (x6050) $1,931,221 Citigold (x2843) $3,176 "B of A" IRA (x9410) $19,228 ATI Defined Cont. Acct. (x1633) $140,766 Total: $32,614,366

 

Wife's Estate Teclmoscient (20 percent interest) $421,456 Cairo Condo $1,647,893 Antiques in Cairo Condo $300,511 Agricultural Land in Egypt (25 percent) $300,000 ompensation or ov , a mg Villa in Abu Rawwash (25 percent) $683,270 Condo on Red Sea (50 percent) $89,400 Commercial Prop. in Spain (25 percent) $340,589 Bank of America (x5313) $7,624 Bank of America (x2659) $284 Bank of America (x3669) $35,012 Citibank (x5053) $349 Banque Misr. (x8073) $869 CIB Acct. (x5956) $1,924 CIB Acct. (x3730) $270 Banco Popular (x5881) $230 Banco Popular (x0469) $1,457 Jewelry Appraised-by DePrisco $217560 Total: $4,148,698

Order re Property Division: ($7,000,000) Order re Equitable Property Division $7,000,000 Total: $25,614,366 Total: $11,148,698 (70% of combined estate) (30% of combined estate)

As calculated above, Wife will retain $11 million in assets, including $9.2 million under her direct and exclusive control (i.e. non-family assets). . . Wife's post-separation lifestyle, which appears to be very similar to the marital lifestyle, is maintained on reported weekly expenditures of $3,176. With this amount, Wife is able to dine-out with her friends, travel around the world, and spend nearly $500 per week maintaining her wardrobe. In meeting these expenses going forward without alimony, the Court notes that Wife could rent out the Cairo condo for• $10,000 per month, at least during the periods she is not in residence. Additionally, Wife could make a more vigorous effort to lease the storefront in Marbella, Spain. The Court also anticipates that Wife will use part of order for property division to buy a home in New York City and thereby eliminate her rental expenses in Boston. Wife could then prudently invest the balance of the order in fixed-income securities that pay a steady return. If Wife is able to put $4 million towards investments paying a modest 2.5 percent yield, it could generate returns of $100,000 per year, taxed at capital gains rates, Alternatively, Wife could use the balance as start-up capital in a new entrepreneurial venture similar to Donna Boutique or her interior design business that she ran prior to the marriage. Ultimately, the division of property contained in the attached Judgment of Divorce will provide Wife with all the resources she needs to produce enough of her own income in the future to maintain a reasonably comfortable standard of living. The Court also notes that Wife is a well-educated, urbane woman and if her investment income should prove to be insufficient to maintain her current lifestyle, she has the ability to find gainful employment in a fashion boutique or in interior design (or perhaps adjust her spending to correspond with her income). Wife at some point is expected to inherit a share of her parents estate which, though it appears substantial, is not valued. The Court notes of course that Husband, quite evidently, will also be left with considerable assets with which to support himself. In fact, Husband will retain eighty percent of his pre-property-transfer estate, which is equitable considering the main engine that generated Husband's remarkable wealth was his solely-owned business (and a healthy market demand for Park-block condos in Manhattan). See Bacon, 26 Mass. App. CL at 120. "Re-imbursement" for Temporary Alimony During the course of this four-and-a-half-year divorce proceeding, Husband was ordered to pay approximately $1 million in temporary alimony.15 Husband has filed several motions to terminate or reduce his temporary alimony obligation to a level consistent with his view of Wife's needs. In a Memorandum of Decision and Order entered On June 16, 2015, the Court eventually reduced Husband's temporary support obligation from $21,500 per month to $13,500 per month due to reservations the Court had about continuing to rely on Wife's representations contained in her attested-to financial statements. In that order, the Court explicitly reserved for trial the issue of reimbursement for temporary alimony Husband allegedly "overpaid" during the pendency of this proceeding. Husband alleges that Wife had no genuine need at all for alimony during this divorce proceeding and he is now essentially seeking restitution of the entire amount he paid to Wife. In addressing Husband's claim, the Court begins by noting "Restitution is an equitable remedy by which a person who has been unjustly enriched at the expense of another is required to repay the 4 . injured 'party:" See Keller v:-O'Brien, 425 Mass. 774, 778 (1997),'citing' Salainori v. Terra, 394 Mass. 857, 859 (1985). "The fact that a person has benefitted from another 'is not of itself sufficient to require the other to make restitution therefor.' Id., quoting the Restatement of Restitution. "Restitution is appropriate 'only if the circumstances of its receipt or retention are such that, as between the two persons, it is unjust for [her] to retain it.' Id., quoting the Restatement of Restitution. The necessary finding of "unjust enrichment" typically requires a finding that the recipient of the alleged undue benefit engaged in some type of fraudulent behavior. See id. and cases cited therein. In this case, Husband alleges that Wife misrepresented her income and expenses in her initial financial statements as part of an attempt to manipulate the Court into ordering a more generous support amount than she should reasonably have been entitled to. While the Court is sympathetic to Husband's frustration with Wife's disclosures regarding her economic situation, the Court notes that "need" is inherently subjective and financial statements are tools for 15 There have been three support orders in place during this litigation: On December 3, 2012, the Court ordered Husband to pay $27,000 per month in temporary support; on October 14, 2013, the Court reduced his obligation to $21,500 per month; and on June 12, 2015, the Court reduced his obligation again to $13,500 per month. Totaling the orders together, Husband was ordered to pay $27,000 for 10.5 months, $21,500 for 20 months, and $13,500 for 19 months (for a total of $970,000).Husband himself has also been less than forthright about his own true income and expenses). While it is clear that Wife included some expenses in her initial financial statements that were more anticipatory or wishful, as opposed to actual expenses—for example, $1,800 per week for travel and $1,923 per week for clothing (Ex. 10)—Wife also made adequate disclosures in the corresponding footnotes explaining how the estimated values were arrived at. See Maillet v. Maillet, 64 Mass. App. Ct. 683, 691-92 (2005); Kirtz v. Kirtz, 12 Mass. App. Ct. 141, 146 (1981). The Court accordingly concludes that although Wife was potentially overzealous in her initial representations about her expenses, her conduct does not rise to the level of outright fraud requiring the Court's intervention to remedy. With regard to Wife's alleged underreporting of income from her rental properties and her family's business in Egypt, Wife credibly testified that she has not received any net rental income from the Spanish commercial property post-separation and she did not become aware of her eligibility to receive dividends from Technoscient until the financial phase of discovery in this case (as noted in the findings above). Wife was not privy to the management decisions of the family company, which were made by her father. Wife was dependent on her alimony for support. The Court therefore declines to order any reimbursement of the temporary alimony paid to Wife. Attorney's Fees Each party in to pay- his/her own fees. In his submissions Wife's counsel asks the Court to award him three million dollars in fees, based in part, on his representation that Husband has had the benefit of some $6,120,000 (See Wife's proposed findings of fact at pages 95,96) based on what counsel contends is the amount of Husband's undocumented personal expenses for food, entertainment, travel and rent run through ATI during the marriage which counsel contends should be considered income to Husband. In addition, he cites Husband wiring $360,000 (in some years more) annually during the marriage to his Cairo office. Wife contended these transfers were not all business related, however Husband ran part, of his business there.. (See Court's finding infra). Further Husband's counsel fees while less than Wife are well in excess of one and a half million dollars. Each counsel and experts in Spain, Egypt and the United States. The divorce entailed 18 days of live testimony, and five additional video depositions which had to be reviewed by the Court. Over 194 exhibits were introduced, multiple witnesses were called. Husband's business needed to be valued along with Wife's interest in her family's business, as well as several pieces of property. A Discovery Master had to be appointed to oversee extensive discovery. The Discovery Master issued eight orders. The marital estate was ultimately valued after trail in excess if what was set forth on their financial statements. After consideration of Mass. Gen. Laws c. 208 sec 38 the Court declines to make an award of attorney’s fees to either party. Both parties will have sufficient assets to pay his/her own legal bills. The Court has considered fees as a liability in making an assignment of assets. Page 43 of 45 Bassiouni v. Bassiouni, SU12D1453 This was a second marriage of intermediate length with no children and with each party bringing in assets he/she already established, particularly Husband's business which as noted previously was the primary engine in driving the parties' lifestyle during the marriage. For reasons already set forth herein the Court ordered an equitable but not equal division of assets. Husband is left with an estate of over twenty five million dollars and Wife with an estate of over eleven million dollars from which to pay fees. Furthermore, substantial fees were incurred by the parties in part as a direct result of parties' own inflexible positions throughout this whole litigation. Moreover counsel and parties were often unable to cooperate on the most basic things. As an example, at trial Wife's counsel would not stipulate to which assets were in the marital estate after submission of financial statements, even after the Court suggested parties would retain their right to assert that additional assets had been dissipated. When Wife offered a chaulk at trial listing figures taken from exhibits already admitted in evidence, Husband's counsel would not review and stipulate that the chaulk figures were accurately taken from the admitted exhibits. The. Court had to appoint a Discovery Master to oversee discovery, not only because of _ • the extent of discovery but because of the high conflict between parties and counsel. Neither ATI (Husband) nor Technoscient (Wife) produced all the requested documentation which made it difficult for the expert appraisers to provide the Court with an accurate opinion of value for these important assets. Husband also refused to sign an authorization for Wife to view documents from Citibank in Singapore to confirm the existence/non existence of an alleged account held-by Husband. Both parties counsel were skilled and experienced in domestic matters and business valuation issues. An award of fees being ordered in matrimonial litigation to be paid by one party to the other must be made on strictly conservative principles. Kane v Kane, 13 Mass. App. 557, 434 N.E. 2d 1311 (1982). Hayden v Hayden, 326 Mass 587 (1950). .The Court is not required to hold an evidentiary hearing particularly where, as here , the Court is able to consider its own observations over 18 days of trial (plus 4 trial* days relating to the jurisdictional phase of this case), assess the difficulties of the issues, skill of each counsel, results obtained, ability to pay. Robbins v Robbins, 19 Mass. App. 538, 476 N.E. 2d 230 (1985); Ross v Ross 385 Mass. 30 (1982) Appellate courts have expressed concern that the issue of attorneys fees in matrimonial matters could also evolve into ancillary major litigation, particularly here given the size of the fees. Id. Kenned v Kennedy 27 Mass. App. Ct 176 (1986). Sanctions

Additional work had to be done by Wife's counsel in connection with Wife seeking discovery from Husband concerning a potential bank account in Singapore. This was based on information from Wife that Husband was called at night from a banker in Singapore, Husband had provided her with a credit card on a Singapore bank, and both had charged expenses to it in the past and that he had it when parties were shopping in Paris in 2012 prior to their separation. Husband was ordered by the Discovery master to execute a document for the Bank to confirm Husband did or did not have an account at Citizens Singapore. Husband failed to do so and the Discovery Master recommended non specified sanctions be imposed. The Court has reviewed the issue independently. It is not disputed that Husband did not execute the necessary document as ordered by the Master and this Court is unable to make a definitive determination of whether an account did or did not exist. If an undisclosed account does exist it remains an asset subject to division under 208 sec 34 if such can be established in the future. After consideration of the issue the Court imposes financial sanction on Husband in the amount of $2500 to be paid in 60 days to Wife.

Hon Elaine Moriarty, Associate Justice

Suffolk Probate and Family Court - 2/21/17


Links to all Court Documents

1 - Sharia Law does not apply to property
2 - Findings of Fact for Property Settlement
3 - Property Settlement