This Bailout Could Cost Iacocca A Bundle

Darrien Iacocca thought husband Lee might slow down when he finally quit the top job at Chrysler Corp. in 1992. But alas, a mellow retiree's life of mixed doubles and bridge with the neighbors was not to be: The world's best-paid car salesman just kept right on going, jetting around the globe to pull together a fledgling casino and entertainment empire.

That's the most irreconcilable difference cited by Darrien in an ever-uglier divorce case that has dissolved into threats, accusations of spying, and--most important--squabbles over Lee's fortune, pegged by his wife at more than $100 million. Darrien, a 55-year-old Los Angeles restaurateur who became Lee's third wife in March, 1991, wants dibs on one or more of the couple's five posh homes, as well as a chunk of the $21 million or more the cigar-chomping former auto honcho earned while they were still together.

The big question is, how big a chunk? A lot rides on a Nov. 9 hearing in Oakland County Circuit Court in Pontiac, Mich., that will determine whether the divorce is handled in Michigan or in California. Lee, who just turned 70, filed in Michigan on Sept. 1. He's eager to have the case settled there, since Michigan's "equitable distribution" rules tend to divvy up assets conservatively. To succeed, Lee must prove he was a Michigan resident for 180 days prior to filing the suit.

Darrien, meanwhile, filed papers in Los Angeles on Oct. 7. California's "community property" rules probably would give her half of what the couple accumulated during their marriage, figures Norman N. Robbins, a Michigan divorce lawyer who isn't involved in the suit.

The prospect of a California divorce already has meant more publicity. Iacocca has tried to keep the divorce hush-hush from the start. His original filing was sealed by a Michigan judge after Iacocca argued that the couple's dirty linen would promptly be aired around the globe. He also worried that bad publicity could scuttle his varied business activities, which include casino construction and an attempt to launch in-flight gambling. Indeed, Lee says in court documents, without elaborating, that his wife threatened "to wage financial warfare against me."

Only when Darrien filed in California was Lee's suit made public. And if the couple's prenuptial agreement becomes part of court files, a list of Iacocca's assets would become public. His aversion to such notoriety gives Darrien leverage. Says Constance R. Ahrons, a sociology professor at the University of Southern California and author of The Good Divorce: "He may have to pay if he wants to get this settled quickly."

The couple's colorful behind-the-scenes theatrics don't augur well for a quickie settlement. In her divorce filing, Darrien says that Lee hired private security guards and a former secretary named Montip Kongkaratana to spy on her in the couple's $4.2 million, eight-bedroom Bel Air (Calif.) mansion. The guards were stationed in vans outside the front gate as well as in the house. When Darrien ordered them to leave, they refused. "I feel as though I am a prisoner in my own home," she wrote.

COURT ORDER. Unnerved by these intrusions, according to court papers, Darrien had a "physical and emotional collapse" and checked into a Los Angeles hospital on Oct. 8 for four days of treatment. In a statement filed with Darrien's suit, her physician, cardiologist David C. Levinson, said she suffered from "severe anxiety and depression." A California judge on Oct. 14 ordered Lee's employees to stay at least 500 yards from Darrien and the Bel Air home.

Neither Lee nor Darrien will talk about the breakup, and their lawyers are cagey about their next moves. But the accelerating court fight offers clues. Legal experts expect Darrien to contest the couple's prenuptial agreement, signed just two days before their marriage in suburban Detroit. She is likely to argue that she was forced to accept its conditions under duress.

In the end, the divorce is certain to become a painfully public episode for both sides--hardly the quiet retirement many 70-year-olds hanker for.

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