Appeal from the Circuit Court of Lake County; the Hon.
Terrence J. Brady, Judge, presiding.
PRESIDING JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:
William M. Block appeals from the portion of the judgment dissolving his marriage to Ruth Ann Block which divided property and awarded the wife unallocated maintenance and child support. The husband also appeals from an order disposing of reserved matters not incorporated in the decree of dissolution.
In the decree entered September 25, 1981, dissolving the 1957 marriage of the parties, the trial court determined that the gross marital assets of the parties were between $1,750,000 and $1,810,000 and that there were marital debts of $1,621,000. The court arrived at a net worth of $437,501 as follows:
I. Excess Marital Assets Pledged
State Bank of Antioch $ 73,000 Marine Bank $ 25,000 Zion State Bank $ 24,000
II. Equity in Weldon Square Apartments $ 35,000
III. Current Value of Profit Sharing Plan $226,183
IV. Current Value of Pension Plan $ 54,018 ________ Net Marital Assets $437,501
The court refused to consider as marital debts a second mortgage on the marital residence ($122,000) and a purchase money mortgage on a racing boat ($70,000). The court found that the husband incurred these debts in contemplation of divorce and in dissipation of the marital estate. Also, the court found that the husband was in debt to his daughter Stephanie for dividends on shares of family stock which he had used during the marriage. The court then ordered, inter alia, that the wife be awarded $328,125 representing 75% of net marital assets, payable in a lump sum or in monthly installments; that the husband pay the medical, dental and college expenses of Stephanie, the minor daughter of the parties, until she reached the age of emancipation or graduated from college; that the husband place in trust for Stephanie's benefit her stock shares and that he repay all dividends earned on shares which he had used; that each spouse be awarded 700 shares of non-marital stock registered to each; and that the marital home be sold with the net proceeds to be applied toward the wife's property award. The court reserved for later hearing questions regarding payment of attorney fees and certain marital home debts and other matters then pending under various petitions.
Various questions are raised by the husband.
The Outstanding Bank Loans
Principally in issue is whether the trial court properly found that certain pledges of stock against loans were excess marital assets which increased the net marital estate.
A. The State Bank of Antioch loan — the parties stipulated that the balance due on the loan incurred in 1966 or 1967 to purchase Quaker Industries stock, and renewed in 1980 by a co-signed note of the parties, was $334,500. The note was secured by 4073 shares of Quaker Industries, a Block family-operated closely held corporation. The husband is the son of Hattie Block, the principal shareholder of Quaker Industries and is a salesman and executive vice-president of the company. The husband pledged 1000 shares of Quaker Industries stock registered to the "Hattie Block Trust," 930 shares registered to William M. Block individually, and 2143 shares registered jointly to the parties against the loan.
The court placed a fair market value of $100 per share and calculated the marital equity in the Quaker Industry stock at $407,300 (4073 shares at $100), deducted the $334,500 debt, leaving $73,300 which the court found to be "excess marital assets" to be divided. We find no basis in the record for this disposition.
The Hattie Block trust stock certificates bear a May 1, 1980, date, approximately 10 months after the parties separated as found by the court. In 1967 the board of directors of Quaker Industries passed a resolution providing that if Quaker Industry shares were pledged against loans, the corporation would repurchase the shares for the amount of loan in default.
The wife argues that the trust shares were available to the husband to use at his will, and for his tax advantage. No trial testimony, however, related to the circumstances surrounding the pledge of the shares of the Hattie Block trust. While, in effect, the wife urges that the Hattie Block trust stock was essentially a gift to the husband presumably commingled with marital collateral disguised to afford the husband tax advantages as well as to avoid payment of a gift tax, there is no support for this argument in the record. Nor is there support in the record for the husband's insistence that the trust shares were for accommodation only. There was no testimony produced by either party which would aid us in analyzing the effect of a repurchase of the stock. Nevertheless, the wife argues here that in the event of a default Quaker Industries could buy back its shares at less than the determined $100 fair market value (i.e., 4073 shares for the $334,500 indebtedness). There was also no testimony to support the wife's argument here that the husband will receive tax benefits ...