On October 15, 2025, the Appeals Court in Karim Suwwan De Felipe vs. Leila El-Youssef Suwwan considered anew issues that have long confounded courts and family law practitioners, wrestling with complex equity compensation in private companies. In his appeal, the Husband challenged both the particulars of the equitable division of the marital estate as well as the alimony award.
It is not likely an overstatement to project that this case will earn its place in Massachusetts’ equitable division jurisprudence. When complex compensation intersects with marital contributions, it exemplifies the challenges courts often face. More specifically, alongside Baccanti v. Morton (2001) and Adams v. Adams (2011), this case is the next step in the progression of a trail of oft-cited cases dealing with the legal issues of using a tried-and-true formulaic time-rule for asset division. Courts have used the latter approach to resolve the difficulties inherent in the valuation of non-traditional assets and interests. That approach is complex. It blends the concept of economic partnership with the equitable division of the marital estate.
What distinguishes this case is that future courts handling high-asset divorces involving private company equity now have an alternative framework. This model guides the division of equity compensation and other complex compensation without relying on traditional immediate-valuation standards. The Baccanti approach focuses on unvested stock options earned during the marriage that vest post-divorce. The Adams method is well-suited for the valuation of speculative assets and interests. We now have a fresh perspective to evaluate and divide non-traditional executive compensation in asset-rich marriages.
BACKGROUND
The Husband was employed by Fidelity in 2015 and continued to work there as a research analyst and portfolio manager to date. The Wife was an associate dentist between 2016-2020. In 2020, after 9 years of marriage, the Husband filed a Complaint for Divorce. Thereafter, the Wife filed an answer and counterclaim. The length of the divorce trial spanned 2 years over several days in 2022-2023. Suffolk County Probate and Family Court Judge, Mehan H. Christopher, entered findings of fact and conclusions of law on April 12, 2024.
Her judgment addressed the details of the equitable distribution of the couple’s lavish and sizeable marital assets. Regarding the Husband’s Fidelity interests, the Judge analyzed the case carefully. She had to examine the varying rules and vesting tranches across three types of equity interests. One was Nonvoting Common Shares (“NVCs”). Another was
Investor Entity Units (“IEUs”). The third were performance shares. What made all of this particularly challenging to divide is the fact that Fidelity is not a publicly traded company.
First, the Judge awarded the Husband all of the Fidelity performance shares that were granted, but not as then distributed. She also directed the inclusion of income from those performance shares. This income must factor into the Husband’s child support and alimony.
Second, the Judge had the arduous task of allocating the NVCs and the IEUs. Of particular note, just 3 months after the Husband initially filed for divorce, he became eligible for — and purchased — an initial tranche of 20,000 NVCs ( “2020 NVCs”. ) Two years later, he purchased an additional 20,000 NVCs (“2022 NVCs”). Contemporaneously, he purchased an initial tranche of IEUs (“2020 IEUs”). Later, the Husband purchased additional IEUs 2 years later (“2022 IEUs”).
NVCs AND IEUs
Fidelity and the employees receiving NVCs both benefit, making these grants a true “win-win.” The highly valued employee has the benefit of enjoying part of the company’s financial success. The company enjoys the dual benefits of incentivizing top talent to remain with the company. Simultaneously, it maintains firm control over power and decision-making.
NVCs offer ownership interest in the company to a select group of valued employees. These employees must qualify as accredited investors under SEC rules and regulations. However, NVCs do not provide any voting rights on Fidelity’s corporate decisions. Since Fidelity is not a publicly traded company, there is no public share price for the NVCs. Therefore, Fidelity sets the net asset value for the shares internally. As an additional incentive for this select group, Fidelity enables their valued NVC-eligible employees to purchase additional shares. To support this, the firm offers low-interest loans, which employees repay as the NVCs vest.
The Appeals Court described IEUs as “stocks in companies owned or partially owned by Fidelity. Employees receive the opportunity to invest in IEUs when they purchase NVCs. IEUs many also be distributed to NVC owners in lieu or in addition to cash dividends. IEUs pay intermittent dividends at the discretion of the individual companies.” Just as with NVCs, companies determine the net asset value for IEUs. A key difference between NVCs and IEUs is that the latter are fully vested when issued. IEUs can be transferred only to authorized holders or assignees. This transfer can occur once the Fidelity loan used to purchase them has been fully reimbursed.
APPEALS COURT
The subject of the Appeals Court’s decision centered on the portion of the equitable division of the marital estate. In particular, it addressed the Husband’s Fidelity 2020 NVCs as well as his 2020 IEUs.
Judge Christopher awarded the Wife a 50% interest in both the 2020 NVCs and 2020 IEUs. She also assigned her 50% of the responsibility for the associated loan balances used for their purchase. The Wife received dividends or distributions, net of taxes, on her percentage interest in the 2020 NVCs and 2020 IEUs. (The court did not assign the Wife any interest in the 2022 NVCs or 2022 IEUs.) The Judge further instructed that if the Husband were not able to assign the Wife’s interest to her (directly or in trust), then he must hold them for her benefit until such time as he leaves the employ of Fidelity or until the Wife directs the Husband to sell the shares on her behalf.
The Husband believed the Judge lacked authority to assign the Wife a 50% interest in the 2020 NVCs. The Appeals Court rejected the Husband’s claim that NVCs are only “retention tools.” Instead, it ruled that NVCs reward past performance, thereby tying it to the possibility of marital contribution. Fidelity’s controller’s testimony supported this conclusion.
Judge Christopher and the Husband disagreed whether the Husband actually earned the 2020 NVCs during marriage since he purchased the first tranche after filing for divorce. In her clear-eye rationale, the Judge reasoned that even though the Husband’s opportunity to purchase that asset occurred 3 months after the date of the divorce filing, “the efforts needed for [him] to be considered such a valuable employee were exerted during the marriage and the assets required to be qualified as an accredited investor were acquired as a result of the marital partnership.” That said, the Judge explained that while there was a nexus between the marital partnership and the 2022 NVCs, she segregated the latter by not awarding them to the Wife, consistent with her broad discretion as to apportionment of assets when dividing the overall marital estate.
The Husband claimed the Judge erred by not using the “modified time-rule formula” from Baccanti. He unsuccessfully challenged the Judge’s award of 50% interest in the 2020 NVCs to the Wife. The Husband’s position was that correct application of that analysis would have entitled him to over 50% apportionment of the compensation. He asserted he used only post-date of divorce efforts to obtain the asset.
While the Judge countered that, as the trier of fact, she had the discretion to determine whether it was applicable to the facts at hand. The burden rests squarely on the shoulders of spouses challenging the inclusion of the assets subject to equitable division. They must
prove that the assets come only from “future services performed after the marriage dissolves”. They must also prove that the “non-employee spouse did not contribute to the employee spouse’s ability to acquire” them.
The Appeals Court came down squarely on the side of the Judge, admonishing “there really is not a serious question that at least a portion of the assets belong in the marital estate.” Their rationale was that the Husband gained the opportunity to acquire the 2020 NVCs during marriage. He also amassed sufficient marital wealth to meet the SEC accredited investor standards.
After a considered analysis, drawing upon a panoply of relevant cases, IRS revenue rulings, and scholarly treatises, the Appeals Court readily distinguished why the Husband’s position advocating for a more favorable (to him) Baccanti analysis was inherently flawed. In sum, there are different vesting outcomes when a court considers the equitable division of stock options vs. NVCs. Moreover, the Appeals Court emphasized that courts cannot apply a “one size fits all” rule to employment-related assets. The court must allocate these assets equitably to ensure justice in marital divisions.
ALIMONY
The Husband’s appeal also challenged Judge Christopher’s alimony award. The Husband must pay the Wife $10,673 weekly in general term alimony. Alimony continues until the Wife remarries, either party dies, or the Husband reaches full retirement age. Payments also end 117 months after Judgment entry. In connection with alimony, one instructive takeaway in preparing client Financial Statements is that, under certain circumstances, there may well be a place for projected additional costs. These costs may include spousal need for health insurance; housing; and child-care. For the instant purposes, although the Appeals Court analysis is enlightening as to what a Judge must take into consideration and under what circumstances a Judge may be overturned on appeal, it is instructive to note what can tip the scales in favor of one spouse versus the other.
The Appeals Court weighted heavily was that the alimony challenges asserted by the Husband, in the end, involved “credibility determination within ‘the domain of the trial judges, in which the judge’s assessment is close to immune from reversal on appeal except on the most compelling of showings.” In short, while some may see a trend in our state’s post- Alimony Reform Act matrimonial universe to circumscribe or eliminate alimony, this case affirms that high-alimony awards are justifiable in certain spheres, especially when a judge carefully tics-and-ties the facts to the relevant statutory factors.
CONCLUSION
Judges will always fashion rough justice when dividing marital estates. Challenges will increasingly confront them. They must clearly explain the reasoning behind their findings of fact and conclusions of law. Predictably, there will likely be a direct correlation between the ever-increasing complexity of non-traditional compensation for high-earners (and, all the more so for those who work for non-public companies like Fidelity) and the imaginative albeit sound manner in which judges reason and dispense justice in their equitable division. This case, the latest pronouncement on the subject, will add to the body of landmark Massachusetts cases judges will take into account in apportioning equitable spousal awards.
While judgments will always be susceptible to appeal, this case emphasizes that (within bounds) judges have tremendous flexibility and broad discretion as the triers of fact to determine equitable outcomes. Moreover, the concept of “marital economic partnership” will continue to evolve with more progressive thinking as to how a spouse’s very indirect contribution may still merit inclusion in the marital estate (and be thereby subject to division). In addition, that there may well be times when it is appropriate to cast aside traditional methodologies for dealing with illiquid and highly-speculative assets in private companies. And, last, but certainly not least, for a select few, high-end alimony is alive and well, and here to stay under the right set of facts and circumstances.