Vans Founder Owes Ex-Wife $10.5 Million, Judge Rules

SANTA ANA — One of the founders of sneaker manufacturer Vans Inc. should pay his ex-wife half the $22 million he made on the sale of his company stock, a judge said Friday, after telling her when they divorced that the stock was worth only $1 million.

Serge and Sally d’Elia divorced in July, 1986, after what her lawyers said was 22 years of marriage. As part of the settlement, he gave her $500,000--half the $1 million he told her his one-third ownership in Vans was worth. But when he and the company’s two other founders sold the Orange-based company in early 1988, he got $22 million because his stock represented a controlling interest in the company.

Sally d’Elia, who lives in Costa Mesa, then sued her ex-husband, who now lives on a Wyoming ranch.

Friday’s ruling is said to have broken new ground in California law. Even though the earlier $500,000 deal was between husband and wife, Orange County Superior Court Judge Nancy Wieben Stock agreed with the wife that the deal should be subject to state securities laws.

That made it easier for Sally d’Elia to prove her case and allowed her to collect half the $22 million, said her lawyers, Marc Gross and Marvin Gross of Los Angeles.

Sally d’Elia will get $11 million--minus the $500,000 she already received for the stock.

Serge d’Elia and his lawyer could not be reached for comment late Friday afternoon. They didn’t say in court whether they would appeal. The unusual, complicated trial took place over more than a week in April.

This is thought to be the first case in which securities laws have been applied in transactions between husbands and wives. The law requires that company insiders disclose all relevant information about the company to other parties in stock transactions.

The judge’s ruling is likely to add fuel to a growing debate in the courts and the state Legislature over how to ensure that divorce settlements are fair.

The judge agreed that Serge d’Elia had not told his wife that Vans, which had just emerged from bankruptcy at the time of the divorce, was actually doing well.

Vans was founded in 1976, but sales took off in the early 1980s when the skateboard set saw the black-and-white checkered sneakers in the hit movie “Fast Times at Ridgemont High” and couldn’t buy them fast enough.

The company expanded too quickly, however, and in 1984 slid into bankruptcy. It emerged from bankruptcy in late 1985 solidly profitable. About six months later, the d’Elias divorced.

Vans was sold about a year and a half after the divorce to a Menlo Park venture capital firm, McCown De Leeuw & Co., for $70 million. The two other founders stayed on, but d’Elia left.