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Graham Weston’s Divorce Lawsuit Has Become a Bizarre Ordeal as Trial Time Approaches!

NEU-BRAUNFELS — A divorce trial is only held in around 10% of cases, but it appears that one of the most high-profile cases in San Antonio history will go to trial.

Less than three weeks from now, Graham Weston, 58, the co-founder of Rackspace and a former billionaire, and Elizabeth Weston, 61, his wife of more than a quarter of a century, will file for divorce in a New Braunfels courtroom.

The long-delayed trial was building up to be quite a show, with witnesses including forensic accountants, computer forensics experts, handwriting analysts, and art and collectibles specialists, as well as psychologists, psychiatrists, sex-addiction experts, and domestic violence specialists.

Nevertheless, the case may turn out to be anticlimactic because state District Judge Dib Waldrip allowed a plea to strike the testimony of 10 of Elizabeth Weston’s expert witnesses last month. Her ex-attorney husband’s requested depositions and reports from them, but she never produced them.

The defense team for Graham Weston is certain that the trial will be over in a matter of days.

That’s in part because Elizabeth Weston isn’t being represented by an attorney. At the end of June, all of the lawyers who had been representing her dropped out of the lawsuit. It was partly due to their client’s refusal to pay their legal expenses and a breakdown in communication that they decided to part ways.

“I want an attorney, but I do not have one, as yet,” she told the judge on Friday. She claims she is financially unable to retain legal representation at this time.

DIVORCE CASE STRESS: Graham Weston’s irate ex-wife claims she can’t afford lawyers.

She has made it clear she will not be defending herself and does not wish to proceed without an attorney. She has spoken to the judge during sessions, but she has done so from the audience section of the courtroom. It’s her method of proving she’s not putting her interests first.

Elizabeth Weston and Waldrip’s numerous pre-trial hearings have descended into bizarre occurrences marked by heated discussions. She has claimed the judge has a “gross bias to the opposite party” and has asked for him to be removed from the case.

The judge has stated that he has gone “far beyond what I should typically be doing to support any side,” adding that this is because he is exercising “an abundance of prudence and fairness.” For Elizabeth Weston and her witnesses to undergo depositions, he has repeatedly postponed deadlines. It’s been a waste of time though.

Waldrip gave her one final opportunity at the hearing on Friday to agree to answer questions from Graham Weston’s attorneys throughout a two-day deposition the following week. Some conditions must be met before she can testify in court.

Graham Weston, on the other hand, appears to be completely unfazed.

As he entered the courtroom last week, he joked, “Welcome to the wild show.” He has a legal team of five people working on his behalf.

Since her attorneys abandoned her, Elizabeth Weston has seen few positive outcomes.

Professor at the University of Houston Law Center Thomas Oldham remarked, “If you don’t have representation in a divorce case and the other side has strong representation, you’re going to get steamrolled a hundred percent of the time.” He lectures on such topics as marital property rights and family law.

There has been much conjecture but no official disclosure regarding the marital estate’s size and assets.

Elizabeth Weston claimed to the court in early June that the couple collected over a billion dollars in assets throughout their marriage, while Graham Weston has evaluated the community estate at ten million dollars or less, her attorney said.

Table of Contents

The Forbes Billionaire

On the eve of 1995, Graham wed Elizabeth Weston. Prenuptial agreements are not in place.

Graham Weston, a real estate developer, invested in the early stages of what would become cloud computing startup Rackspace Technology Inc. less than four years later.

He invested in Rackspace and, six months later, became its CEO, leading the company to become the most successful technology startup in San Antonio’s history.

Rackspace’s success propelled him onto Forbes’ annual billionaire’s list in 2013. This was the only time he was included in the list.

He continued with Rackspace until 2016 when New York private equity firm Apollo Global Management acquired it for $4.3 billion.

Since then, he has scaled up his engagement in real estate investing and development in downtown San Antonio through his company Weston Urban.

Combining properties it has previously bought and anticipated acquisitions under a 2015 partnership with the city and Frost Bank, the firm is projected to possess around 26 acres in the urban center.

Frost Tower, Weston Centre, Milam, Rand, and Savoy are only some of the office and retail properties in Weston Urban’s portfolio. More recently, the firm has focused on creating residential projects, with more than 600 apartments planned at two separate locations.

32-STORY HIGH-RISE: Weston Urban is making a big bet on downtown housing demand

Graham Weston collaborated on the creation of Geekdom, a for-profit shared office space at the Rand Building on East Houston Street that aims to support businesses by connecting entrepreneurs with experienced professionals.

He has also been instrumental in several local initiatives. He is also known for his work with the 80|20 Foundation, which supports entrepreneurs, as well as Community Labs, a non-profit organization that performs testing for coronaviruses. It boasts on its website it invests in “the 20% of the NGOs delivering 80% of the social impact.”

Elizabeth Weston has kept a low profile, although she has claimed in court that she is the controlling entity for several family businesses, including at least one that owns over 200 acres near New Braunfels.

She has handled litigation with the city of New Braunfels on behalf of a Weston partnership throughout the years and ran a company that owned horses. A drainage contract was at the heart of the argument.

In a court petition dated August 23, she stated that she has “no outside employment or particular abilities.”

She home-schooled the couple’s three boys, all of whom are now grown, men.

 

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Ugly split

Graham Weston filed for divorce from his wife of nearly 26 years on October 19, 2020, but he backed out of the process less than 25 hours later.

Elizabeth Weston demanded a divorce from her husband a week later. In all instances, only initials were given instead of full names. On December 23 of the same year, Graham Weston submitted a counterpetition. Every one of them filed for divorce, citing “discord or conflict of personalities” as the reason.

Things became quite heated between them very fast.

She said he raped her and had multiple extramarital affairs with London women, one of whom may have tried to blackmail him. While other accusations are inappropriate for a family newspaper, they are not considered to be salacious. He has dismissed her claims as “false and pure retaliation,” according to him.

Graham Weston, co-founder of Rackspace and a former billionaire, and his wife have decided to break their 26-year marriage.

According to him, she followed him for almost a year and a half, taped their conversations, and even engaged a private investigator. His side thinks that she sparked an IRS audit of the couple’s 2019 joint tax return, which was disclosed at a hearing last month.

Elizabeth Weston claims she deserves a “disproportionate share” of the estate in a new petition she filed earlier this year. She claimed that her “responsibility in the dissolution of the marriage,” their “earning power,” and her husband’s dishonesty was to blame for their divorce. She claims he stole from the community and spent it on himself.

She claimed that “G.M.W. deployed different techniques to implement his scheme, all with the intent to deceive E.W. and the communal estate,” including “the pretense of estate planning,” “the construction of trusts,” and “the creation of various corporations.”

Additionally, she stated that Graham Weston was provided with “innumerable commercial and financial prospects” for “hundreds of millions of dollars.” She argued that they were examples of “community opportunities” that had a positive impact on the couple’s joint property.

Graham Weston's Divorce

A Maze of entities?

An attorney for Elizabeth Weston testified on June 2 that Graham Weston had set up around 90 separate corporations that had invested in over 100 other separate entities. He also mentioned that they had invested in additional businesses.

Lawrence Friedman, a Dallas-based attorney, was perplexed by Graham Weston’s supposed web of corporations and relationships.

According to Friedman, “they” (Graham Weston’s attorneys) estimate that the community estate is worth $10 million or less, whereas the billion dollars accumulated during the marriage is Graham Weston’s. That being the case, was it essential to form some separate legal entities? Not if the estate is worth less than $10 million.

“DARED TO STAND UP” TO HIM: Graham Weston, co-founder of Rackspace, files suit against a local San Antonio attorney.

Lawyers for Graham Weston have contested her side’s estimate of the marital estate.

Graham Weston’s attorney in San Antonio, William Ford, told the judge that the “multi-billion dollar (estate) fiction” and the “200-entity list” were both inventions of the Elizabeth Weston team.

At a hearing in May, Judge Waldrip summed up the situation, as may be best.

He finally said, “This seems to me to be like commercial litigation.” They say, “One side has a very high number” (in mind). An extremely low number is held by one camp. We will not settle this lawsuit until the costs have reduced the extremely high number below the breakeven point.

Graham Weston's Divorce

Lawyers’ exit

The departure of Elizabeth Weston’s attorneys seems to have ended any hope of that happening.

Within a few weeks of the June 2 hearing, seven lawyers dropped out of representing her. Elizabeth Weston’s primary attorneys, Friedman and Ryan Zurich claimed their desire to part ways with her because of her “persistence upon pursuing a purpose that (they) consider distasteful or impudent or with which (they) have a fundamental disagreement.”

What exactly alienated them is unknown at this time. Judge Guadalupe Rivera held a private discussion with the attorneys; Ford was not permitted to participate. Ford asked the judge to make a sealed record of the hearing in case an appeal is filed, but the judge denied this request as well.

With their departures, the total number of attorneys who had previously represented Elizabeth Weston dropped to at least 29. She claims she has spent over $4 million on lawyers and demands an interim attorneys’ costs and support order.

SA Inc.: Receive exclusive email updates on all the latest business developments.

Ford has responded by saying that Elizabeth Weston has over $3 million at her disposal, which Weston has denied. Meanwhile, Waldrip claimed that her attorney withdrew the only motion for interim fees he was ever supplied with.

Since her attorneys left, the pre-trial hearings have degenerated.

In a five-minute statement presented to the judge on July 7, Elizabeth Weston explained that she was “struggling to make ends meet and have a fair and equitable playing field in this divorce.” She also expressed her dissatisfaction with her old attorney for failing to provide her with case materials.

At a hearing the next week, she increased the intensity of her criticism.

She asked Judge Waldrip to step down from further proceedings in her divorce case on the grounds of bias, saying, “Judge Waldrip, I beg that you recuse yourself from hearing any more matters in my divorce case.”

She claimed throughout the hearing that Graham Weston had stashed money in offshore accounts and digital currencies. Her phone, she said further, was being “illegally monitored.”

Threatening Contempt

The proceedings took an even odder turn on Aug. 8, when Elizabeth Weston got up from her seat near the front of the gallery and proceeded to the back row during a hearing.

Later, she added firmly, “Your honor, I am not able to proceed without an attorney.”

“Do not raise your voice at me,” the judge added.

“I am shouting into the microphone,” she answered. Then, in a quiet tone, she continued, “Would you prefer me to speak like this? I can.”

If “Ma’am” tries to use the courtroom again, Waldrip warned, “you will be held in contempt.” And that means you’re headed for jail and a night on a narrow mattress.

Waldrip remarked that her place in the gallery was “an affront to the court” and showed a “lack of respect” for him.

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Elizabeth Weston had a terrible day.

In a hearing about four trusts, the judge ruled in favor of Graham Weston.

Graham Weston’s forefathers established trusts in which Graham and others share a beneficial interest before he got married, but the Court ruled that these assets are not divisible marital property. The judge also determined that any money Graham Weston received from the trusts while he was married belonged solely to him.

Notably, the trusts gave startup cash to Rackspace, his lawyers have alleged.

One of the trusts emerged in 1939 after his paternal grandparents inherited a Toronto baking firm, Graham Weston said in a recent disclosure.

The judge offered Elizabeth Weston the chance to oppose the motions — as long as she gave legal reasoning.

She said, “Your Honor, by saying if I wish to answer with a legal foundation, you are painting me into a corner.” No, I can’t go in pro se because I don’t want that to be the impression given.

But she insisted that she needed to address the motions.

Waldrip sighed exasperatedly, “There’s no oral testimony.” “I’m pleased to listen to your legal problem or citation to authority. But we won’t merely offer our opinions and critiques.

When the motions were made, she never questioned them.

Depositions

On August 1 and 3, the judge mandated that Elizabeth Weston appear for depositions to answer questions from Graham Weston’s attorneys.

On day one, we worked for a total of nine hours. Ford claimed that the majority of the hearing was “unproductive” because she frequently responded to inquiries by stating that she is not a lawyer and is not acting on her behalf.

The depositions were brief on the second day.

Ford told the judge on August 8 that when he asked Weston a question, Weston “stated she would not answer any questions, got up, and stormed out of the room, and slammed the door.”

With Elizabeth Weston paying $12,400 in court sanctions before the August 19 deadline, Judge Waldrip rescheduled the deposition for August 22 and 23. She refused to make any payments, thus no depositions were recorded.

Mediation between the Westons took place on August 11 and 12, but on Friday, Ford reported to the court that it had failed.

The judge rescheduled Elizabeth’s deposition for the following Tuesday and Wednesday when the parties met later that day. First, though, she has until Friday at noon to fork over the required $12,400.

She informed the court in a brief two-page paper that she intended to testify on several issues, including that “GW pledged in writing to pay me $25 million,” just days before the trial began.

She offered as evidence an email written by Graham Weston to their lawyer in 2019. He wrote, “I want to transfer $25m to Elizabeth,” in the email. Please arrange a time when you can meet with Elizabeth and me to discuss the best approach. That would be good for Elizabeth.

Further, she claimed her spouse had put over $5.1 million into a joint account but had since removed the majority of the money. She claims that “nearly entirely” of the funds went toward paying for his legal fees related to his pending divorce.

As she put it in her letter, “I rely on the presumption that this money became community property, and I should be entitled to a repayment of the half which I might immediately utilize to continue obtaining counsel or paying fees in this action.”

She concluded that she “must save what little is left of my separate property for my living expenses and retirement,” even though “my divorce case lawyers seem to have (inexplicably) failed to bring to this Court’s attention” that she owns many millions of dollars worth of Rackspace stock.

It’s unclear if she’ll ever be called to testify. If she doesn’t come up with the $12,400 soon, the judge may throw out her testimony.

The trial date could be pushed back again if Waldrip decides she needs more time to prepare. Scheduled to begin on September 21.

The judge remarked, “I can never say never” when asked if the date might be moved. “But I expect this to be a real, concrete date.”

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