×

Lorna Wendt, of GE Capital 'corporate wife' divorce, dies

The woman whose bitter big-bucks divorce made national headlines in the 1990s when she dared to demand half of her GE Capital CEO husband's assets — arguing she was an equal partner in his corporate rise — died Thursday after a short fight with cancer.

Lorna Wendt, who was in her early 70s, "was an amazing person," said Arnold Rutkin, one of her lawyers in her protracted divorce from high-powered executive Gary Wendt in Stamford, Conn., court.

"She knew what she had done to help Gary, and she hung in there," Rutkin told CNBC. "People still talk about the case ... they saw it as groundbreaking, both on employee benefits and the value of a woman's work in the family."

"Lorna was the numero uno corporate wife," Rukin said. "She had a set of b---s."

Lorna Wendt.
Andrew Savulich | NY Daily News | Getty Images
Lorna Wendt.

The Wendt divorce generated widespread media coverage — with Lorna ending up on the cover of Fortune magazine carrying the headline "What's a Corporate Wife Worth?" — because of the large amount of money at stake: Up to $130 million.

But the case — which also sparked countless office water-cooler arguments and much concern in C-suites — also hinged on two tricky legal questions.

One was whether a stay-at-home wife should be considered an equal partner for the sake of dividing marital assets that had been largely, or completely, acquired as a result of the corporate husband's job.

Connecticut law requires an "equitable distribution" of marital assets — not an automatic 50-50 split. And "equitable" in the courts often translated into "not nearly as much as 50 percent" for many stay-at-home corporate wives.

Former General Electric executive Gary Wendt leaves court in Hartford, Connecticut, on April 4, 2000. Wendt's former wife, Lorna Wendt, was appealing her $20 million divorce settlement and the state Court of Appeals was hearing the appeal.
Bob Child | AP
Former General Electric executive Gary Wendt leaves court in Hartford, Connecticut, on April 4, 2000. Wendt's former wife, Lorna Wendt, was appealing her $20 million divorce settlement and the state Court of Appeals was hearing the appeal.

The other key question was how to value the many unvested General Electric stock options, restricted stock and other benefits that Gary had been awarded during the course of an extremely successful career at the company. Gary, who ran GE Capital at a time when that finance arm was company's most profitable division, didn't think she was entitled to any of that deferred compensation after they split.

The Wendts, who were high school sweethearts from Wisconsin, had been married for 32 years when Gary decided in 1995 that he wanted to separate. Lorna had last worked outside the home in 1968, as a public music school teacher, around the time the couple had their first daughter.

Lorna sued for divorce, claiming that she was entitled to half of the marital estate, which was then valued at between $45 million and $130 million. Her argument was that she had raised their two daughters, took care of their home and also had helped Gary's ascension to CEO by attending charity events, business dinners and other corporate functions over the decades.

She later told Fortune, "I complemented him by keeping the home fires burning and by raising a family and by being CEO of the Wendt corporation and by running the household and grounds and social and emotional ties so he could get out and work very hard at what he was good at."

"If marriage isn't a partnership between equals, then why get married?" she asked.

She told The New York Times in 1998, "I assumed we would split everything 50-50. ... If he wanted to dissolve the marriage, I just assumed I would get 50 percent."

For Lorna, that meant about $50 million, which took into account the future estimated value of the unexercised stock, options and other benefits.

Gary, however, wanted to give her just $8 million, and $250,000 in annual alimony indefinitely.

"I know what Lorna's needs are, and I want her to be able to live very, very comfortably after we're divorced, and I think that's the kind of a number that should allow her to do that," Gary said in a deposition, according to a 1996 Wall Street Journal article.

Lorna didn't get the amount she was seeking, even after a contentious 18-day trial in an extremely cramped courtroom that featured more than 100 exhibits, multiple expert witnesses and her irritated husband making faces at her lawyer Rutkin from the witness stand.

But a 420-page decision by Judge Kevin Tierney in 1998 awarded Lorna $20 million — much more than what Gary had offered her.

And some of that money represented the estimated value of the deferred compensation, which Gary Wendt's lawyers had argued should not be considered part of the marital estate.

Both parties later appealed Tierney's leviathan-like decision, which references, among much else, hotel heiress Leona Helmsley, the Irish poet W.B. Yeats, King Henry VIII and Claudia Sanders, the wife of Kentucky Fried Chicken's Colonel Harlan Sanders.

Gary and Lorna ultimately settled out of court for an undisclosed sum.

"It certainly wasn't 50-50. On the other hand, it was substantial," said Rutkin, who later married his co-counsel in the Wendt divorce, Sally Oldham.

Lorna Wendt, who had several grandchildren at the time of her death, went on to found the Institute for Equality in Marriage, a clearinghouse of divorce-related information, and often spoke out about her case.

An active traveler who visited Mount Kiliminjaro and participated in long-distance bicycle rides, Lorna served as vice chairman of the board of directors of Outward Bound International. She also had served several stints on the board of directors Outward Bound USA, and of the Stamford Symphony in Connecticut.

"She was an extraordinary woman," said Barbara Soroca, CEO of the symphony, who lived across the street from Lorna in Stamford both before and after her split with Gary.

"I think she did an amazing job at creating equality in marriage, and making certain that women have a say at the table," Soroca said.

Gary Wendt, who resigned from GE Capital after his divorce when then-General Electric boss Jack Welch wanted to clear the path for a successor, later ran the then-troubled insurance and finance company Conseco, which lured him with a $45 million signing bonus. He spent just over two years as CEO there before stepping down in 2002, shortly before the company filed for bankruptcy protection.

Now chairman of the management committee at Deerpath Capital Management, Wendt could not be immediately reached for comment about the passing of his ex-wife.

In a 2001 BusinessWeek story, he was quoted saying about Lorna, "I don't lose much sleep over her, as I can't change the fact that she has made the divorce her career."

Rutkin, who with his law partner wife stayed friends with her over the years, said he did not believe Lorna kept in contact with Gary because of how bitter their split was.

And after the divorce case, "I never really heard her talk about him," Rutkin said.