By DAVE COLLINS, Associated Press
HARTFORD, Conn. (AP) _ Credit Suisse Group AG chief executive Brady Dougan owes his wife more than $750,000 in interest for being 12 days late with a $7.5 million divorce-related payment, the state Supreme Court ruled Monday.
The high court unanimously upheld a section of the Greenwich resident’s divorce settlement dealing with interest on late payments that he argued shouldn’t be enforced. Justices noted that Dougan is a “financially sophisticated” businessman and had agreed to the terms.
The disputed section said that if Dougan was late with a $7.5 million payment due in June 2006 to Tomoko Hamada Dougan, he would have to pay her interest at a 10 percent annual rate dating back to when the agreement was signed in June 2005. Dougan said he should owe interest only for the 12 days the payment was late, and when he made the payment, he gave her an extra $25,000 representing the dozen days’ worth of interest.
“The record demonstrates that the plaintiff understood the language of the interest provision,” Justice Dennis G. Eveleigh wrote in the decision. “By now asking the court to refuse to enforce the provision, the plaintiff is taking a position clearly inconsistent with his previous position.”
The ruling upholds a decision by the state Appellate Court, which overturned a trial court ruling in favor of Brady Dougan. His main argument was that the interest provision was a penalty clause that violated public policy and was unenforceable under state law.
Dougan’s attorney, Gary Cohen, didn’t immediately return a message Monday.
Gaetano Ferro, Tomoko Hamada Dougan’s lawyer, said the Supreme Court’s decision was expected, though it was a surprise to him that the case made it all the way to the high court.
“Mr. Dougan knew what the agreement was,” Ferro said. “He should have been above board, met his obligation. I don’t understand, given his wealth, why he was taking the position he did.”
Ferro also said Brady Dougan should have to pay 10 percent interest for each of the five years he hasn’t paid the $750,000 interest penalty, which would bring the amount he owes his ex-wife to about $1.1 million. That issue is expected to be brought up at another court hearing.
Under the divorce settlement, Brady Dougan, whose estate was worth nearly $80 million at the time, agreed to give Tomoko Hamada Dougan $15.3 million in cash in two installments, the $9.6 million Greenwich home they once shared, accounts totaling about $143,000 and a 2000 BMW car.
The couple married in 1988 in Japan and had two children.
Brady Dougan, 51, has been with the Zurich-based investment bank since 1990. He was named chief executive officer in 2007.
(Copyright 2011 by The Associated Press. All Rights Reserved.)