Couples who mediate must at least tolerate being in
the same room. And they must be willing to do the
type of financial legwork a lawyer or accountant would
do for a fee.
Charles and Lucy Rey learned that quickly. Their
mediation took 20 hours over 11 sessions. The sessions
were videotaped for training purposes. And the tapes
provide a good look at this normally confidential
process, showing its strengths and pitfalls.
A quiet man with long hair, Charles, now 63, had
taught physics at several Midwestern universities.
After patenting a procedure to elevate small objects
with sound waves, he and a partner formed Intersonics
in 1981, which did research almost exclusively for
Lucy, 58, put aside a teaching career to raise
their children. During their divorce, she had finished
a graduate degree in social work and hoped to start
a counseling practice.
At one of their first mediation sessions, Lucy
demanded Charles give her half his ownership stake
in the company.
Lucy claimed Intersonics was a "common marital
asset," citing an Illinois law which gives
spouses a right to half of any asset acquired during
the marriage. Charles then threatened to close the
He told her, "You were never very supportive
of my effort to try to build the company up. I'm
the one who was in the office Saturdays and Sundays
tying up proposals."
"I made it possible for you to pursue your
career by keeping your home, Charlie," Lucy
countered. "I took time away form my goals.
I raised our children. There's a value in that."
When Charles refused to give her a equity stake,
Lucy demanded half of what Charles' Intersonic was
then worth in cash - $250,000 to $750,000, she said.
Charles argued that it was only worth $142,000.
Up to this point, mediator Carl Schneider had spent
most of his time helping them determine their needs
and desires. Now he stepped in. "I don't think
you have to at each other's throats," said
Schneider, who has a doctorate in clinical psychology.
"You both need some information about the business."
The mediator listed some options. The Reys could
each hire auditors or have their lawyers do it -
both expensive propositions. Or, he said, Charles
could agree to share information Lucy felt she needed.
Schneider also asked the Reys to bring to their
next meeting a list of all their financial assets.
And he gave them a form to help them calculate
their monthly expenses, including the $30 Lucy spent
on cosmetics, Charles' $35 dry cleaning bill and
$25 haircuts, and the $200 annual fee for the dog's
At the time of the divorce, Charles' gross income
was $83,808. Lucy's was $22,500.
Lucy spent $500 more monthly than she earned. Charles
monthly income fell $900 short of his expenses.
Schneider told the Reys they could "be prepared
to operate in a deficit in years to come" or
else find ways to cut costs and increase their incomes.
By the next session, Lucy had consulted a lawyer
and come armed with his demand for financial information
about Charles' business.
When Lucy said she was prepared to subpoena the
data, Schneider interrupted.
"Those kinds of threats are not helpful, Lucy,"
he said. "We work here on the premise of voluntary
Lucy had also come to the session with a proposal
for a settlement - the first of many. In it, she
asked for a one-time payment of $236,000. The payment
would include about $170,000 in cash, $59,000 in
stocks and bonds, and the transfer of one of Charles'
Charles flatly refused.
Schneider looked for ways the couple might compromise.
He noted one way to raise cash for both of them
was to sell their house and split the proceeds.
The Reys seemed responsive, but fought over who
would pay of needed home repairs.
"So much needs to be done on the house because
you neglected it so long, Charlie," Lucy began
"Can I suggest that you two count from one
to 10 real quick," Schneider intervened.
A short time later, Lucy dropped a bombshell of
sorts. She asked if she could bring in a second
mediator - a woman. "There were times when
I felt like Carl and Charlie were on the same wavelength,
and I was odd woman out," Lucy said later.
Schneider didn't object. But when the Reys learned
it would double the cost of their mediation, they
dropped the idea.
Charles now said that he is now willing to pay
Lucy $200,000 for her half of his shares in Intersonic.
But such a payment would leave him with only $19,000
in cash on hand, and he wanted to make the payments
over five years. Lucy refused.
Fearing a collapse in negotiations, Schneider sought
separate meetings with Lucy and Charles.
Away from his wife, Charles spoke despairingly
of his company's prospects. He said he risked losing
two key NASA contracts because of government cutbacks.
Schneider asked both to focus on what they could
agree on and shelve temporarily the hot-button issues.
Bit by bit, the couple made concessions. Lucy agreed
to a five year payment schedule. After reviewing
documents from Intersonics' outside counsel and
auditors, she softened her estimation of its worth.
The couple also agreed to sell their house and split
the proceeds. The Reys finally reached an agreement
that provided Lucy $206,000. It included the value
of stocks, bonds, half the proceeds from the sale
of the house and $36,000 in cash. Charles kept $169,000
and the dog.
"Crack out the champagne!" Schneider