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Credit Suisse CEO facing his own late fee
HARTFORD, Conn. - Even the chief executive of banking giant Credit Suisse Group is complaining about late fees these days.
As Congress and the president talk about ending so-called abuses in the credit card industry like sudden rate hikes and late fees, Brady Dougan is in Connecticut courts fighting claims that he owes his ex-wife nearly $1 million for being 12 days tardy with a $7.5 million divorce-related payment.
The 49-year-old chief executive, who lives in Greenwich, suffered a blow in his legal case Wednesday, when the state Appellate Court ruled 2-1 that he must abide by the late payment penalty terms in his 2005 divorce agreement with Tomoko Hamada Dougan.
Retired state Supreme Court Justice David Borden, sitting on the Appellate Court for Dougan v. Dougan, wrote that Brady Dougan is a "highly educated and financially sophisticated" person who "wants to avoid the obligation that he knowingly undertook."
Supreme Court Justice C. Ian McLachlan, appointed to the high court in January, voted with Borden in the appellate ruling. He noted that at the time of the divorce agreement, Brady Dougan's estate was worth nearly $80 million and it appeared he could have made the $7.5 million payment soon after signing the deal.
The Appellate Court overturned a Superior Court decision and sent the case back to the lower court to decide how much Dougan should pay his ex-wife.
It was not clear if Dougan planned to appeal to the state Supreme Court. A message was left Thursday with his attorney, Gary Cohen.
The June 2005 divorce deal called for Dougan to pay his ex-wife $7.8 million soon after a judge granted them a divorce, which happened later that month, and another $7.5 million by June 16, 2006. The penalty for being late was 10 percent annual interest and any expenses Hamada Dougan had in collecting the late payment.
Dougan made both payments, but paid the second one on June 28, 2006. He did, however, give his wife nearly $25,000, representing the 10 percent interest for the 12 days the payment was late.
Hamada Dougan sued her ex-husband, saying he was liable for just over a year's worth of interest dating back to when the agreement was signed. The Appellate Court sided with Hamada Dougan, saying the contractual terms were clear.
Brady Dougan asked the court to throw out the entire penalty provision. His main argument was that there is a long-established legal precedent against contracts imposing penalties for breaches.
McLachlan and Borden agreed there is such a precedent, but noted the state Supreme Court also has recognized the importance of private agreements in divorce cases.
Judge F. Herbert Gruendel, who took Brady Dougan's side, criticized the majority opinion. "In its effort to graft new standards for the enforcement of marital contracts, the majority departs from centuries of binding precedent and seeks to create new yet unworkable decisional law."
Hamada Dougan, 52, also lives in Connecticut. Her attorney, Gaetano Ferro, said he was pleased with the court's decision.
"I was very surprised that Brady Dougan ... would do what he did, which was basically try to repudiate an agreement," Ferro said.
Ferro said Brady Dougan now owes his ex-wife about $975,000 in penalty interest not paid over the past three years, plus legal fees.
The couple married in 1988 in Japan and had two children.
He has been with the investment bank since 1990 and was named chief executive of Suisse Credit Group in May 2007. He has a bachelor's degree in economics and an MBA in finance, both from the University of Chicago.
Except if it goes against the woman; then the private agreement "shocks the conscience of the court" and is invalidated.