Diamond Merchant Loses Divorce Appeal, Ordered to Pay Ex-Wife $1.2 Million

The Tel Aviv District Court recently rejected an appeal by a diamond merchant who was ordered to pay his ex-wife approximately 4.4 million shekels as part of their joint property division. Judges Naftali Shila, Sigal Yaacobi, and Yechiel Eliyahu ruled that the value of the man's company should be calculated based on the date of the couple's separation, not its current, lower value. The court also partially accepted the woman's appeal, increasing the husband's payment by about 200,000 shekels.

The couple married in the 1980s and acquired a home and two investment apartments in Tel Aviv during their marriage. The husband managed a diamond business through his company, while the wife, who holds two law degrees, worked for years in the company's accounting department. In March 2020, the wife initiated divorce proceedings and subsequently filed a property claim, alleging her husband had hidden millions of dollars worth of diamonds from tax authorities. She claimed recorded conversations revealed he admitted to possessing at least $20 million in diamonds.

A court-appointed expert valued the company, excluding real estate, at approximately 8.87 million shekels. Based on this valuation, the husband was initially ordered to transfer about 4.4 million shekels to his ex-wife. Both parties appealed this decision.

The husband argued that diamond prices had fallen significantly since the tax filings and that the inventory's value should be based on its actual realization. He also sought to hold his ex-wife responsible for half of the accumulated tax debt, which he claimed had grown to about 10 million shekels, and accused her of taking hundreds of thousands of dollars worth of jewelry from their home.

The wife countered that her ex-husband refused to transfer her share of the diamonds, thus forfeiting his right to reduce her settlement based on a claimed devaluation. She also sought compensation for the disparity in their earning capacities.

Judge Shila, writing for the court, dismissed the diamond merchant's claims. He stated that since the husband continued to manage the company after the separation, any change in its value was his responsibility. The court emphasized that the husband could have sold the diamonds near the time of separation and given his ex-wife her share, and his failure to do so did not justify reducing her rights due to an unproven alleged devaluation. The judges also rejected the husband's demand for his ex-wife to cover half the tax debt's interest and penalties, noting he could have paid the debt by selling diamonds or property but did not. His claim that she took jewelry was also dismissed due to lack of proof.

Conversely, the wife's appeal regarding earning capacity was partially granted. Judge Shila noted that despite her legal education, her work experience was limited, and she would face difficulties re-entering the job market at her age. Consequently, an additional 199,955 shekels, plus interest, were added to the husband's obligation. Finally, the husband was ordered to pay 50,000 shekels in legal costs and attorney fees to his ex-wife.