Family Law

The divorce battle involving one of the three brothers who run Fry's Electronics has evolved into a legal attack on a family partnership, offering a glimpse inside the private family that owns the San Jose retail powerhouse, the SaberCats football team and a controversial golf course in Morgan Hill.

Laurie E. Fry is suing ex-husband William R. ``Randy'' Fry, his two brothers John and David, and the partnership -- dubbed ``the Taw'' -- that controls the Fry's Electronics chain. She is seeking to invalidate a post-marital agreement that limited her ability to cash out her stake in the partnership that attorneys say is about 6 percent of the Taw. She also wants financial records about the Fry's empire.

The lawsuit was filed last week in Santa Clara County Superior Court in San Jose. In 1996, the brothers formed the Taw and contributed their shares of Fry's Electronics and other assets to the partnership, according to the suit. Through the Taw and other partnerships, the Fry brothers have purchased an island in the Bahamas, a sheep ranch in New Zealand and planes, the suit states.

Laurie Fry is seeking financial records to buttress her belief that her ex-husband shortchanged her when she signed a post-marital agreement in November 2002 -- just months before he moved out of the couple's Cupertino home and filed to end their 18-year marriage. She is contesting the agreement and provisions of the partnership that limit her ability to sell her share.

Her stake initially was valued at $16 million in 2002, according to divorce court filings. The post-marital agreement indicates the couple's combined stake in Fry's Electronics and the Taw was worth an estimated $600 million at that time.

During their contentious divorce proceedings, Laurie Fry has claimed that her ex-husband ``commenced coercing'' her to sign the agreement on the grounds that it ``would preserve and prolong their marriage.'' Later, she alleges, she learned that he was involved romantically with another woman.

One of Randy Fry's attorneys on Thursday rebutted the argument that Fry had pressured his wife to sign the post-nuptial agreement or failed to disclose holdings. As for the accusation that Randy was cheating on his wife, attorney Ken Chiate of Quinn Emanuel said, ``I'm informed that is simply not true.''

He contends Laurie Fry is shifting the battle to civil court because she has repeatedly been thwarted in her attempts to get a bigger piece of the empire in divorce court. The couple's divorce was granted in 2005, but the fight over the division of assets continues.

``This new lawsuit, in my opinion, is an attempt to circumvent and sidetrack and do an end run on the family law judge,'' Chiate said. But Laurie Fry's lawyers counter that she is taking the fight to civil court because it's the proper venue to challenge the terms of the partnership. She claims the partnership pays only enough profits each year to cover each shareholder's taxes. But if she wants to cash out, she can sell her stake only to the Taw, and its rules stipulate that she must be paid in installments over 35 years.

``The basic rule in California is any restrictions on selling your interests has to be reasonable,'' said Laurie Fry's attorney, Michael Ackerman of Ackerman, Kevorkian & Mash. Randy and his brothers, John C. Fry and David A. Fry, and Kathryn Kolder founded Fry's Electronics in March 1985 to cater to electronics tinkerers. Six days after Randy and Laurie married that May, Fry's Electronics opened its first store. Today, the family-run business has grown into a retail giant with 32 stores in nine states, including six outlets in Silicon Valley.

The entire story is in the Mercury News.