MEDIATING THE END OF DIVORCE
 
From bitter antagonists to agreement in 20 hours
 
By Judith Valente
Special for USA Today

 
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 NASA.

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 company.

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 shots.

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 disclosure."

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' retirement accounts.

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 shouting.

"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 crowed.

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