Things are getting even uglier in the ongoing, bitter divorce war between Jenny Paulson and her ex, billionaire hedge funder John Paulson.
Jenny had now accused him of using a “sham” real estate deal to take $10 million out of a family trust — but his lawyer’s blasting her lawsuit as a “selfish money grab.”
On Wednesday, Jenny’s lawyer filed an amended complaint alleging that Paulson used a trust set up in 2009 to buy a “sham” apartment at the St. Regis Bahia Beach Resort in Puerto Rico.
The resort is owned by his company, Paulson & Co.
While the penthouse spot is worth $15 million, the suit alleges Paulson purchased it in 2020 for “an artificially low price of $5.6 million,” thus, “such transaction, among other things, had the effect of JP Morgan Trust Company of Delaware, as trustee of the 2009 Trust, making an impermissible distribution of at least $10 million to Mr. Paulson,” says the suit.
Jenny has also accused her loaded ex of racking up “hundreds of thousands of dollars in unpaid hospitality charges relating to this condominium.”
John’s lawyer, James T. Smith of Blank Rome, tells us, “There are numerous factual inaccuracies in the amended complaint. The condo purchase was not a sham purchase – Mr. Paulson signed a contract for the full list price in 2020. Because he has not yet closed on the apartment, there are no unpaid hospitality charges.”
Paulson has been trying to dismiss the case, and a hearing was set for Thursday. His team is claiming the amended complaint is “a ruse to avoid a hearing. Jenny is afraid the case will be dismissed, and will do anything to avoid a hearing,” they fired back.
Jenny first filed suit in July 2022 in New York state Supreme Court, accusing John of fraud and claiming he’d been secretly siphoning the couples’ assets into a trio of trusts, “totaling several billion dollars,” according to the suit, in order to shield it from her in the event of a divorce.
The trusts, whose beneficiaries include their children, benefit “Paulson’s legal wife,” meaning that Jenny would be deprived of the assets upon their split, court papers show.
“While the trusts created by Mr. Paulson ostensibly served as vehicles for the financial benefit of his family, in reality they were post-nuptial substitutes made unilaterally by one spouse without the other’s knowledge or consent and served to evade Mr. Paulson’s lawful obligations in the event of divorce,” reads the suit.
But Paulson and his lawyers are calling Jenny’s suit a “money grab.”
“This remains a selfish money grab by Mrs. Paulson to strip her children of their inheritance,” Smith told us in a statement. “The extent of her greed is unconscionable.”
Paulson’s team further argues that, “The amended complaint does not cure the fatal flaws in their original complaint, including: a) Paulsons’ daughters and other Trust beneficiaries were not named as defendants, b) These claims are time barred and c) There was no fraud – Jenny knew about the trusts for over 20 years.”
The couple were married for 21 years.
Paulson, who famously made a fortune by betting against the housing market before the 2008 crash, is worth $3.5 billion according to Forbes.
Jenny is asking for a billion in the trust case.
A separate case has the couple fighting over $200 million real estate portfolio with properties in fancy places like the Hamptons, Aspen, Colo., and Palm Beach, Fla.
Paulson is also separately being sued by a former business partner, Fahad Ghaffar, for $50 million, who claimed fraud and breach of contract over an investment in a car company — which Paulson has denied.