No end in sight for decade-long Conn. divorce case

STAMFORD, Conn. (AP) - It's a divorce and child visitation case that already has produced nearly 600 motions and rulings and evidence of insider trading that brought down a multibillion-dollar hedge fund.

And as it passes the 10-year mark, the case of former Connecticut investment adviser David Zilkha and his ex-wife, Karen Kaiser, shows no signs of nearing a final resolution. They remain embroiled in disputes over child visitation and fees for hired experts, with more court hearings set for the next two months.

The acrimony has included mudslinging by both sides and prompted a show of frustration from the judge.

"There are some cases that for whatever reason ... sort of spin out of control," Judge Michal Shay said during a hearing in Stamford Superior Court last year. "It seems impossible, it seems intractable, sometimes to pull them back and try to get them on the right track, and that's what I'm trying to do here."

David Zilkha, who hasn't seen his 12-year-old twin son and daughter for four years, alleges in court documents that Kaiser is refusing to schedule "unification therapy" for him and the children that both sides agreed on in January. He also has accused Kaiser of lying repeatedly to authorities about him and alienating the children from him.

Kaiser claims Zilkha also has lied to authorities, subjected her to libelous smear campaigns to damage her reputation and once punched her in the face, according to documents in the divorce case and a defamation lawsuit she has filed against Zilkha.

A court-ordered mental evaluation also alleged Zilkha has such a severe narcissistic personality disorder that he shouldn't be allowed to see the children, a claim Zilkha strongly disputes and says has been debunked by prominent therapists who evaluated him.

Court documents filed by Kaiser say Zilkha has had the ability to see the children under supervised visitation but has refused to do so. Zilkha is protesting the conditions of supervised visitation and says the sessions are prohibitively expensive, costing him more than $5,000 per visit. He called the supervised visit system a "racket" for lawyers and others involved in the process.

Kaiser, a 48-year-old homemaker in Southbury, and her divorce lawyer, Dori-Ellen Feltman, declined to comment about the case.

Zilkha, 44, a British citizen now living in London, told The Associated Press that Kaiser has been trying to destroy their children's love for him. He says she has failed to comply with court orders and has abused the court system, which he believes is biased against fathers in child visitation cases.

"Basically, my kids and I have been brutalized," Zilkha said, referring to the legal process. "It's been soul-destroying. It's been life-destroying."

Kaiser filed for divorce on Aug. 13, 2003, saying the five-year marriage had "broken down irretrievably." A judge granted the divorce May 31, 2005, but the case continued with scores of motions involving the children and legal costs.

The proceedings took an unusual turn in January 2009, when the divorce case unveiled evidence that led the Securities and Exchange Commission to reopen an insider trading investigation against Pequot Capital Management Inc., then based in Westport.

SEC officials said Kaiser provided them with emails she saved from her and her ex-husband's home computer that helped show Zilkha provided inside information about Microsoft Corp. to Pequot and its founder and chairman, Arthur Samberg, in 2001. The SEC alleged Pequot and Samberg used the information to trade Microsoft shares and make more than $14 million for the Pequot funds.

Pequot and Samberg later agreed to pay $28 million to settle the SEC's insider trading charges, but neither admitted nor denied wrongdoing. The SEC also obtained a $250,000 judgment against Zilkha, who was working at Microsoft when Pequot hired him in April 2001.

Kaiser and her current husband, meanwhile, got a $1 million award from the SEC for helping with the investigation _ the largest award the agency had ever paid for information in an insider trading case.

Pequot, which was a major investment firm that managed $15 billion in assets at its peak in 2001, shut down in 2009 amid the SEC investigation.

Pequot fired Zilkha in late 2001, but he later won a $2.1 million settlement in a wrongful termination lawsuit. The settlement, which was to be paid in three installments, became an issue _ and is still an issue _ in the divorce case, with Kaiser accusing Zilkha of not disclosing the award. Payment of the third installment has been delayed because of court proceedings.

Most divorce cases are nothing like Kaiser and Zilkha's case in terms of length and the volume of paperwork, said Carolyn Wilkes Kaas, an associate law professor at Quinnipiac University in Hamden. But such acrimony, unfortunately, is not unheard of, she said.

Another Connecticut divorce case, Nancy Tauck v. Peter Tauck, included an 86-day trial in 2007 that cost some $13 million in attorneys' fees. Lawyers in the case believe it was the longest divorce trial in state history. That case was filed in May 2005 and lasted to December 2011, with nearly 700 filings.

Kaas said one of her main concerns about lengthy and contentious divorce cases is the effect on children.

"Generally speaking, the evidence is overwhelmingly clear that ongoing conflict and lack of ability to resolve a matter is very bad for kids," she said.


(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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