Kim Rothstein near settlement

South Florida Business Journal - by Paul Brinkmann

Date: Tuesday, March 8, 2011, 1:33pm EST - Last Modified: Tuesday, March 8, 2011, 1:35pm EST

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Kimberly Rothstein, wife of Ponzi schemer Scott Rothstein, is on the verge of settling her lawsuit with the bankruptcy trustee of her husband's former law firm.

• Paul Brinkmann
• Reporter
• Email: pbrinkmann@bizjournals.com

Kimberly Rothstein, wife of Ponzi schemer Scott Rothstein, is on the verge of settling her lawsuit with the bankruptcy trustee of her husband's former law firm.

"We have a settlement in principle," attorney Stephanie Moon said in court Tuesday morning. "A draft has been sent to her attorney's office for his review with his client."

Moon is an attorney with Berger Singerman, the law firm handling the $1.3 million lawsuit against Kim Rothstein. She did not disclose terms of the settlement.

The bankruptcy trustee for Rothstein Rosenfeldt Adler sued Kim Rothstein on March 10, 2010.

The suit alleged that Kim Rothstein spent $880,609 on company credit cards for personal expenses since 2006, $104,223 on political donations for which she was reimbursed, and received $153,198 for unspecified "professional fees."

According to the suit, Kim Rothstein used an American Express card for Rothstein Rosenfeldt Adler to purchase items including jewelry, clothing, shoes, handbags, leather goods, plastic surgery treatments, eyewear, electronics, hotel rooms and spa services, furnishings, home gym equipment, vacations, athletic club charges, groceries, charity contributions and meals.

Kim Rothstein's last big media splash came when she attended her husband's sentencing hearing in June 2010. Despite widespread speculation she would divorce her husband, there's been no report of any such filing.

Kim Rothstein's bankruptcy attorney, Michael Seese, did not respond to e-mails and calls for comment about the settlement. Kim Rothstein has maintained that she had no knowledge of any criminal activity on the part of her husband, and has filed motions refuting the bankruptcy claims.

Scott Rothstein's Ponzi scheme came to light over Halloween weekend 2009, when he was unable to pay back some investors and temporarily fled to Morocco. While he was gone, Kim Rothstein helped host a charity event at the couple's posh Fort Lauderdale home.

The complaint states that Kim Rothstein made two large political donations from her personal account and was quickly reimbursed: one for $70,000 to Republican John McCain's presidential campaign, and one for $28,500 to the National Republican Senatorial Committee.

The suit didn't allege that Kim Rothstein had knowledge of the Ponzi scheme, but it alleges the funds belonged to the law firm, that the purchases and donations provided no benefit to RRA and, thus, the firm received no or less than a reasonably equivalent value in exchange for these payments.

Attorneys in the bankruptcy researched Kim Rothstein's expenses thoroughly. They requested spending records from retailers where the Rothsteins apparently squandered law firm money: Aldo, Bebe, Bloomingdale's, Bergdorf Goodman, Burberry, Cache, Circuit City, Coach, Ermare Shoes, Gym Source, Jimmy Choo Madison Avenue, Louis Vuitton, Lucky Brand Jeans, Michael Kors, Nordstrom, OnlineShoes.com, Pacific Sunwear Stores Corp., Saks Fifth Avenue, Shop 603, Solstice Sunglass, Tiffany & Co., Touch Clothing and XTC on Melrose.

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