May 7, 1997 in City
High-Stakes Split Craig And Wendy Mccaw Haggle Over How To Divide Fortune
The divorce of Craig and Wendy McCaw has become a money-making industry of its own, with lawyers and accountants likely to make millions in fees before the split is finalized.
Twenty months after divorce papers were filed, both sides are still haggling over how to equitably split the McCaw fortune, estimated at roughly $1.3 billion. Experts say it is the most money ever at stake in a divorce in Washington state.
The McCaws, who have no children, separated after 21 years of marriage because of personal differences. Each declined Seattle Times’ requests for interviews. Their lawyers, too, declined comment.
Perkins Coie, one of Seattle’s largest law firms, is representing Craig. Bogle & Gates, one of the city’s oldest, is representing Wendy.
An attorney from Bogle & Gates told a judge that within the first year the McCaw divorce had become the second or third largest case, of any kind, that the firm has ever handled. One larger case he cited: the fallout from the Exxon Valdez oil spill in Alaska.
Craig McCaw and Wendy Petrak met in the early 1970s while undergraduates at Stanford University. They married in 1974.
Craig McCaw’s father, Elroy, was a pioneer in the cable and radio business in rural Washington. Soon after his father died in 1969, Craig McCaw began taking control of the family ventures.
The McCaw family went on to make a fortune through McCaw Cellular, which in the 1980s became the nation’s largest wireless phone carrier.
In 1994, Craig McCaw, the company’s chairman, sold McCaw Cellular to AT&T; for $11.5 billion. As part of the deal, he took ownership of roughly 13 million shares of AT&T; stock, today worth about $435.5 million.
Washington state divorce law is governed by a principle called community property: Any property earned after a couple is married is presumed to be owned by both people. Property owned before the marriage is considered separate.
Craig McCaw, 47, who initiated the divorce, has indicated in legal documents that much of the $1.3 billion fortune should be considered his own.
He says much of it came from a series of investments he made, along with his brothers and mother, with money passed down after his father’s death.
Wendy McCaw, 45, claims financial lines have blurred during 21 years of marriage, making much of the fortune community property.
For the past 20 months, their lawyers and accountants have been poring over financial records stored in thousands of boxes and bank files from Redmond to Manhattan to Honolulu.
One accountant on a team headed by Evan Schwab, Wendy McCaw’s lead attorney, summed up the task: “The job … requires tracing and analyzing literally over a billion dollars’ worth of assets over 22 years through hundreds of business transactions and bank loans, dozens of bank accounts, and hundreds of corporate entities.”
The divorce hasn’t slowed Craig McCaw’s business ventures.
He and Microsoft Chairman Bill Gates are majority investors in Teledesic, a privately held Kirkland company proposing to launch roughly 300 communications satellites by 2002. Craig McCaw is the company’s chairman.
Craig McCaw, his mother and brothers have invested roughly $365 million in Nextel, a wireless-phone and mobile-radio company effectively controlled by him.
If a judge did rule to split things down the middle, one associate mused, Craig McCaw could still run his businesses.
After all, he said, we could all “do pretty well with half a billion dollars.”
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