The Solow case is cited constantly in asset protection commentary, and almost always for the wrong lesson. The standard framing is simple: bad timing, panic transfer, contempt. Move on.
That framing is incomplete — and the incompleteness matters, because the court’s reasoning in Solow was legally contested at almost every significant step. Understanding what the court got wrong is as important as understanding what the Solows got wrong. Both are instructive. And both lead to the same conclusion about what legitimate pre-litigation planning actually requires.
What the Case Was:
SEC v. Jamie Solow, 682 F.Supp.2d 1312 (S.D. Fla. 2010), arose out of an SEC enforcement action against Jamie Solow for violations of the Securities Exchange Act of 1934. On January 31, 2008, a jury returned a verdict against him. The Final Judgment was entered May 14, 2008, requiring Solow to pay disgorgement of $2,646,485.99 plus prejudgment interest of $778,302.91 — a total of $3,424,788.90 — plus a civil penalty of $2,646,485.99.
In early February 2008, following the jury verdict but before the Final Judgment, Mrs. Solow retained the asset protection firm of Donlevy-Rosen & Rosen, P.A., to protect her assets. She wanted to ensure that the family’s primary residence — a homestead property valued at approximately $6 million, held as Tenancy by the Entirety since 2002 — would pass to her children rather than to Mr. Solow’s creditors if she predeceased him. To accomplish this, she established an offshore trust, arranged a mortgage on the homestead property (the proceeds of which were transferred to the trust as a certificate of deposit from an offshore bank), and transferred additional assets she had held for years beyond any applicable fraudulent transfer statute of limitations.
On January 15, 2010, District Court Judge Donald M. Middlebrooks found Mr. Solow in contempt of the Final Judgment and ordered his incarceration. He did so on the theory that Mr. Solow had created his own legal impossibility by consenting to the mortgage — and that because he had consented to the transfer of TBE property, he could not now claim he was unable to satisfy the judgment.
What the Court Got Wrong — And Why It Matters
Defense counsel Howard Rosen and the Donlevy-Rosen firm testified and argued that the court’s contempt holding was legally unsound at multiple levels. The arguments are not frivolous. They deserve a straightforward presentation.
First, the homestead was acquired in 2002 — well before any of the conduct giving rise to the SEC action. The statute of limitations on fraudulent transfers runs from the date of transfer, not the date of litigation. A transfer in 2002 that is challenged in 2008 or 2010 falls outside any voidable transaction window. The court dismissed this entirely, treating the 2002 acquisition date as irrelevant — a position that defense counsel argued contradicts settled fraudulent transfer law and the purpose of limitation periods.
Second, TBE property in Florida is shielded from the individual creditors of one spouse by operation of state law. The SEC’s judgment was against Mr. Solow alone. Under Florida law and the Florida Supreme Court’s holding in Beal Bank v. Almand and Associates, 780 So.2d 45 (Fla. 2001), there is a presumption that jointly held marital property is TBE, and that presumption requires an affirmative act to rebut. The Solow court stated explicitly that it did not have to recognize TBE protections created by state law — a position that conflicts with the well-established principle that state law creates and defines property rights, including exemptions.
Third, the court misapplied In re Lawrence, 279 F.3d 1294 (11th Cir. 2002), which was the SEC’s primary authority. In Lawrence, the debtor had the sole power to appoint trustees in his own offshore trust — meaning he retained de facto control over the assets through his ability to install a compliant trustee. The Lawrence control mechanism is entirely different from the Solow situation, where Mr. Solow was not the settlor of the trust, held no trustee appointment power, and the trust assets were funded by Mrs. Solow from assets she had held for years.
Fourth, the court’s characterization of “POD” accounts as “pay on demand” — an SEC theory adopted without evidentiary support — was simply wrong. POD designations mean “pay on death,” a standard probate avoidance mechanism found at any financial institution. Defense counsel noted that a single call to any bank would have confirmed this. The court accepted the SEC’s characterization as fact.
Fifth, the U.S. Supreme Court’s holding in Maggio v. Zeitz, 333 U.S. 56 (1948) actually cuts against the contempt order, not for it. Maggio held that an impossibility defense is unavailable only where the inability was created by the contemnor’s own act. Defense counsel argued the court inverted this: the acts it cited as creating the impossibility — the 2002 TBE acquisition, routine marital transfers years before the SEC action — were not acts of the contemnor in the Maggio sense at all. They were ordinary transactions well outside any cognizable legal window.
What the Solows Actually Got Wrong
None of the foregoing means the Solows handled this perfectly. They did not.
The mortgage is the central problem.
When Mrs. Solow placed a mortgage on the TBE homestead in February 2008, she required Mr. Solow’s signature. He signed. That signature — executed days after a jury verdict and while a disgorgement order was pending — gave the court what it needed. Even if the TBE homestead was legally unreachable by the SEC on the underlying judgment, the act of mortgaging it, with Mr. Solow’s knowing consent, in the immediate aftermath of the verdict, created a factual record that the court found sufficient to establish participation in an asset transfer designed to frustrate the pending payment obligation.
The timing of the trust formation itself, while legally defensible from a fraudulent transfer standpoint for the assets held beyond the statute of limitations, created a narrative problem that no amount of correct legal argument could fully overcome with this judge. Judge Middlebrooks stated in open court that he wanted to incarcerate Mr. Solow. Defense counsel characterized the resulting contempt order as result-oriented. Whether or not that characterization is correct — and the legal arguments for it are serious — it illustrates a fundamental enforcement reality: when a federal district court judge has decided what he wants to do, legal correctness is necessary but not sufficient protection.
The assets in the offshore trust remained beyond the court’s reach. The court could not compel the foreign trustee. It could — and did — compel Mr. Solow’s person. His incarceration ultimately forced Mrs. Solow to sell the homestead to obtain his release. The structure protected the trust assets. It did not protect the people from a judge who was determined to use his contempt power as a collection mechanism regardless of the underlying legal analysis.
The Four-Pillar Analysis
Timing is where the case fractures.
The underlying assets — particularly the homestead acquired in 2002 and the marital transfers made years before the SEC action — were defensible on fraudulent transfer grounds. The statute of limitations analysis was sound. But the mortgage executed in February 2008, days after the jury verdict, was indefensible on timing grounds regardless of whether the underlying property was reachable. That single act, requiring Mr. Solow’s knowing consent at the worst possible moment, handed the court the factual hook it needed.
Control is the mechanism of the contempt holding.
The court found that because Mr. Solow consented to the mortgage, he retained constructive control over the TBE assets — and could therefore not disclaim the ability to satisfy the judgment. Whether or not this was legally correct under Maggio and Lawrence, it was the court’s finding, and it resulted in incarceration. The practical lesson is the same regardless of where the legal error lies: a judgment debtor should not take any affirmative act with joint marital property after a creditor’s claim becomes visible. The consent was the act. The act created the contempt record.
Jurisdiction performed as designed on the trust assets themselves.
The offshore trustee held independent authority. The court had no mechanism to compel the foreign trustee. The trust assets were not repatriated. On the jurisdictional question, the structure worked. The court’s frustration with its own inability to reach the foreign assets is visible throughout the opinion — and that frustration is what drove the aggressive contempt analysis against Mr. Solow personally.
Collectibility produced an outcome that defense counsel correctly describes as partial.
The trust assets remained protected. The homestead was sold under duress created by Mr. Solow’s incarceration. The SEC recovered something — but not from the trust, and not through any mechanism that successfully pierced the offshore structure. A private civil creditor without the SEC’s institutional resources and federal enforcement authority would almost certainly have walked away long before any of this reached the contempt stage.
The Real Planning Lesson
Solow is not a case that proves offshore trusts fail. It is a case that proves result-oriented judicial decision-making is a real risk in federal court enforcement proceedings — and that the best defense against it is a factual record so clean that a motivated judge cannot find a hook.
The Solows had most of the right assets in most of the right places for most of the right reasons. The homestead was a six-year-old TBE acquisition. The marital transfers were years old. Mrs. Solow’s planning motivation — protecting assets for her children in the event she predeceased her husband — was legitimate and documented. Her attorneys testified to it.
The single act that undermined all of it was the mortgage. It required Mr. Solow’s consent. He gave it, in February 2008, three weeks “after” a jury found him liable in a federal securities case.
That consent is what the court converted into a finding of self-created impossibility. Without it, the contempt record looks entirely different.
The planning lesson is not “don’t use offshore trusts.” The planning lesson is: once a creditor’s claim is visible, a judgment debtor must not touch anything. Not TBE property. Not joint accounts. Not marital assets that require dual signatures. The moment that signature goes on a page, it becomes evidence — and in a federal court with a judge inclined to find contempt, evidence is all that is needed.
Pre-litigation structure, established before any identifiable creditor exists, eliminates this problem entirely. The TBE homestead, properly handled, was already protected without any trust. The trust was created to solve a different problem — the testamentary problem of what happens if Mrs. Solow dies first. That was a legitimate goal. The execution, timed as it was and requiring Mr. Solow’s consent on the mortgage, created the contempt exposure that cost them the homestead.
Structure before stress. And once the stress arrives — do nothing without counsel, and do not sign anything.
By: Brian T. Bradley, Esq. – Asset Protection Attorney
