The ongoing divorce war between Jenny Paulson and her ex-husband, billionaire hedge funder John Paulson, has taken a new turn. Jenny has accused John of using a “sham” real estate deal to take $10 million out of a family trust. According to Jenny’s lawyer, John used a trust set up in 2009 to purchase an apartment at the St. Regis Bahia Beach Resort in Puerto Rico, which is owned by his company, Paulson & Co. The lawsuit alleges that John purchased the $15 million penthouse for an artificially low price of $5.6 million, resulting in an impermissible distribution of at least $10 million from the trust to John. Jenny has also accused John of accumulating hundreds of thousands of dollars in unpaid hospitality charges related to the condominium.
John’s lawyer, James T. Smith of Blank Rome, has strongly denied the accusations. He stated that there are numerous factual inaccuracies in the amended complaint. According to Smith, the condo purchase was not a sham, and John signed a contract for the full list price in 2020. Furthermore, Smith emphasized that since John has not yet closed on the apartment, there are no unpaid hospitality charges as claimed by Jenny.
Paulson’s legal team has been working towards dismissing the case, and a hearing was scheduled for Thursday. However, they argue that the amended complaint filed by Jenny’s lawyer is simply a ploy to avoid the hearing. They claim that Jenny is afraid the case will be dismissed and is willing to do anything to avoid it. It is clear that both parties are firmly standing their ground and fighting for their interests.
The bitter divorce battle between Jenny and John started when Jenny filed a lawsuit in New York state Supreme Court in July 2022. She accused John of fraud and claimed that he had been secretly diverting their assets into trusts totaling several billion dollars in order to shield them from her in the event of a divorce. These trusts, which include their children as beneficiaries, currently benefit John’s legal wife, meaning that Jenny would be deprived of the assets upon their separation.
The lawsuit asserts that the trusts were created unilaterally by John without Jenny’s knowledge or consent. Furthermore, she argues that the trusts served to evade John’s obligations in the event of a divorce. However, John and his lawyers have refuted these claims, labeling Jenny’s suit as nothing more than a “money grab.” Smith stated that Jenny’s actions are a selfish attempt to strip her children of their inheritance, suggesting that her greed is unconscionable.
In response to the amended complaint, John’s legal team has outlined several arguments against the accusations. They point out that Paulson’s daughters and other trust beneficiaries were not named as defendants in the lawsuit. They also argue that the claims made by Jenny are time-barred. Additionally, they assert that there was no fraud, as Jenny had knowledge of the trusts for over 20 years.
The animosity between Jenny and John became public when Jenny discovered that John had filed for divorce and was involved with Alina de Almeida, a much younger fitness influencer, through an article in Page Six. John, known for making a fortune by betting against the housing market before the 2008 crash, is currently worth $3.5 billion according to Forbes. In contrast, Jenny is seeking a billion in the trust case.
Besides the ongoing divorce battle, John Paulson is also facing another lawsuit from his former business partner, Fahad Ghaffar. Ghaffar is suing John for $50 million, alleging fraud and breach of contract related to an investment in a car company. However, John has denied these allegations.
The divorce war between Jenny and John Paulson continues to escalate with new accusations and counterarguments. Both parties have diverging perspectives on the financial matters at stake. As the legal battle proceeds, it remains to be seen how the courts will determine the division of assets and the resolution of these complex allegations.