N.Y. Times News Service
PONTE VEDRA BEACH, Fla. _ For an admitted felon who arrived in
Ponte Vedra Beach just a step ahead of the irate victims of his
insider trading, Martin A. Siegel manages to live quite well,
thank you. The former Wall Street investment banker occupies a
$3.25 million, 7,000-square-foot beachfront home whose purchase
put Siegel's assets out of reach of a $2.75 billion civil suit.
Just up the road at the Marsh Landing Country Club lives Bowie
K. Kuhn, the former baseball commissioner who moved here in 1990
as his Manhattan law firm was going through bankruptcy
Kuhn enjoys the benefits of a Florida life style in his
million-dollar, five-bedroom, five-bath house, which he bought
after creditors seized his weekend house in the Hamptons and were
just about to attach his $1.2 million home in Ridgewood, N.J.
Good weather and the many golf courses and beach resorts
scattered across this elegant Jacksonville suburb are not the
only advantages of a legal residence in Florida.
As Siegel and Kuhn knew when they came here, a state law
prohibits the seizure of a person's legal residence in bankruptcy
proceedings, regardless of the value of the property. Florida
also allows debtors to protect a broad array of financial assets,
ranging from wages to annuities and pension plans.
The law is part of a broad and increasingly controversial
network of legal exemptions from bankruptcy claims that have led
Florida to be dubbed "the deadbeat's haven" and "the debtor's
"I believe this law is grossly unfair," said Judge A. Jay
Cristol, a federal bankruptcy judge in Miami who has been an
outspoken advocate of overhauling Florida's bankruptcy and
homestead exemptions. "Theoretically, you could shelter the Taj
Mahal in this state and no one could do anything about it."
Siegel and Kuhn are not alone in their decision to seek refuge
in Florida. A multimillion-dollar horse ranch near Ocala is now
owned by Marvin Warner, an Ohio banker and former U.S. ambassador
to Switzerland with more than $4 billion in claims against him as
the result of the collapse of the savings and loan association he
owned. In April 1991, Warner began serving a prison term of 3
years for violating securities laws and making unauthorized money
And Harvey Myerson, Kuhn's law partner in the New York firm
Myerson Kuhn, moved to Key West in the midst of his travails,
where he bought a $1.75 million Mediterranean-style oceanfront
home known locally as "the southernmost house in the United
Had Myerson remained in New York, he would have been allowed
to shelter only $10,000 in a homestead. In California, he could
have sheltered $50,000 for a home that he alone occupied or
$75,000 for a family home. Texas and a few Plains and Midwestern
states also have unlimited homestead exemptions, but none seem to
draw wealthy debtors like Florida.
"It has been my experience over the years that people from all
sorts of places suddenly seem to move to Florida once they know
they are in trouble with the law," said Frank Maas, a New York
lawyer who represented Marine Midland Bank, which lost a $3.1
million claim against Kuhn and Myerson.
What is more, Florida has sweetened the attraction with
numerous other broad exemptions that attract millionaire debtors
from other states. In addition to sheltering their homes, people
filing for bankruptcy in Florida are allowed to exempt all of
their wages, including wages deposited in bank accounts, and the
total value of any annuities, pension plans, individual
retirement accounts, life insurance policies or profit-sharing
benefits they have. Creditors can go after cars, boats, jewelry
and other personal property.
Florida's homestead exemption is part of a populist tradition
that dates to the 19th century, when a person could buy a
comfortable house in the city, or a large working farm, for
$1,000 or less. …