In re Marriage of Gerber is a June 2024 order of the Illinois Appellate Court, Second District, in an appeal from a Lake County divorce. It deals with two issues that come up often when a couple owns a business: how to value the spouses' share of companies that are partly owned by someone else (here, trusts for the couple's children), and whether paying an old bill after the marriage has broken down counts as dissipation. The appellate court upheld the business valuation and reversed the dissipation finding.
Key points
- Case: In re Marriage of Gerber, 2024 IL App (2d) 220244-U (Ill. App. Ct. 2d Dist. June 10, 2024), No. 2-22-0244, appeal from the Circuit Court of Lake County.
- Weight: This is a Rule 23 order, not a published opinion. It is not binding precedent. Under Supreme Court Rule 23(e)(1), orders like this one entered on or after January 1, 2021 may be cited for persuasive purposes only.
- Valuation affirmed: Because the couple controlled both companies and ran them as one business, the trial court valued them together. The appellate court held that value was within the range the experts gave and was not against the manifest weight of the evidence.
- Dissipation reversed: The husband did not dissipate $87,335.15 by paying, after the marriage broke down, attorney fees he had incurred before the breakdown. Paying a debt that arose in the normal course of the marriage did not waste the estate.
- Remedy: Because the trial court had divided the estate equally, the appellate court added $43,667.58 (half of the amount wrongly charged) to the husband's share instead of sending the case back.
What happened
Lawrence and Laura Gerber married in 1980. In 1999 they formed Scholarships.com, a website that offers free scholarship searches to prospective college students. In 2004 they set up its ownership so that they held 52% and trusts for their children held 48%. The court explained that the parties set up this structure for estate planning: they "intended to give the children ownership but not income." In practice, the trusts received distributions only to cover their income taxes, and the parties kept the rest. In 2005 the parties formed a second company, American Student Marketing, LLC, which they owned equally. They operated the two companies "on a consolidated basis as essentially one business" and kept about 86% of the profits distributed from the two.
Laura filed for divorce in 2014, and that case was dismissed in 2016. Both spouses incurred attorney fees in it. Laura paid hers on time. Lawrence contested his bill and paid $87,335.15 in 2019, the same amount he would have paid in 2016. Lawrence filed the divorce at issue in 2017, and the trial court found that the marriage had broken down in December 2016.
The valuation experts were far apart. Laura's expert valued the parties' interests in the two companies at $11.171 million, and Lawrence's expert valued them at $4.14 million. Citing section 503(l) of the Illinois Marriage and Dissolution of Marriage Act, the trial court appointed its own financial expert to review both valuations. That expert concluded the companies had "existed as separate entities in name only" for several years. He valued a 100% interest in the combined business at $9.798 million and the trusts' 48% interest in Scholarships.com at $2.748 million on a minority basis, which left $7.05 million for the parties' combined shares.
In its December 2021 judgment, the trial court divided the marital estate equally. It accepted its expert's analysis, awarded the businesses ($7.05 million) to Lawrence, and gave Laura other assets of equal value. It also found that Lawrence's 2019 payment of the old attorney fees was dissipation because he made it after the breakdown. It did not treat Laura's fees from the 2014 case as dissipation.
What the appellate court decided
1. The business valuation stood
Lawrence argued that because the parties owned only 52% of Scholarships.com, their interest could be worth no more than $5.095 million (52% of $9.798 million). The appellate court said he misread the trial court's findings. The trial court did not find the second company worthless; it found the two companies so intertwined that they could not be valued separately. The parties owned 100% of the second company, so their share of the combined business was necessarily more than 52%. The appellate court found that the trial court had implicitly treated about 72% of the combined value as marital and 28% as belonging to the trusts. That split was consistent with the court-appointed expert's discount testimony and with how the parties had actually treated the trusts during the marriage.
The standard of review mattered. A trial court's valuation is reversed only if it is against the manifest weight of the evidence, and a valuation within the range of the expert testimony "will not ordinarily be disturbed on appeal." The combined value here was "well within the range proposed by the three experts."
The court also reminded Lawrence's lawyer that his briefs had not acknowledged this well-established law, and that counsel has a duty "to present the law as it exists, not just as it might support [his] claims or arguments."
2. Paying an old marital bill was not dissipation
The court described dissipation as the "use of marital property for the sole benefit of one of the spouses for a purpose unrelated to the marriage at a time that the marriage is undergoing an irreconcilable breakdown," and said that "[t]he concept of dissipation is premised upon waste."
Lawrence had not run up new debt after the breakdown. The fees were "an account payable, a debt that had arisen in the normal course of the parties’ marriage." The court reasoned that not paying them would likely have cost more in fees, interest, and damages. Paying them therefore did not waste the marital estate.
Laura relied on an older case in which a husband was found to have dissipated assets because he could not recall which debts he had paid. The court said her argument "goes more to the quality of evidence a party must present to avoid a finding of dissipation." In Gerber there was no question about the amount of the pre-breakdown debt Lawrence paid.
The court gave a second reason. The trial court had not treated Laura's comparable pre-breakdown fees as dissipation, and a court does not administer justice fairly "if the court treats comparable behavior differently."
3. The fix
Because the trial court had said it was dividing the estate equally, the appellate court did not send the case back for a new division. It modified the judgment to increase Lawrence's share by $43,667.58, half of $87,335.15, and affirmed the rest of the judgment: "Reversed in part; affirmed as modified."
What Gerber means for an Illinois divorce involving a business
- Paper ownership is not the whole story. The court looked at how the couple actually ran the companies and moved money between themselves and the trusts. If a family business has related entities or other owners, expect the operating agreements, distribution history, and intercompany allocations to be examined, not only the ownership percentages.
- The court can bring in its own financial professional. Section 503(l) allows the court to seek the advice of financial experts or other professionals. That advice must be in writing and made available to counsel, the lawyers may examine the professional as a witness, and the court allocates the professional's fees between the parties based on each party's financial ability and other appropriate criteria.
- Valuation disputes are won or lost at trial. Because a value inside the range of the expert testimony is ordinarily upheld, the time to challenge a valuation's assumptions, such as minority or marketability discounts, is with evidence in the trial court.
- Dissipation turns on waste, not just timing. Spending after the breakdown is not automatically dissipation. In Gerber, paying a documented debt that arose in the normal course of the marriage was not. A spouse who pays marital debts while a case is pending should keep records of what was paid, when the debt was incurred, and what it was for. A spouse claiming dissipation should be ready to show that the money was used for one spouse's sole benefit for a purpose unrelated to the marriage.
- Dissipation claims have procedural requirements. Under section 503(d)(2), a notice of intent to claim dissipation must be given no later than 60 days before trial or 30 days after discovery closes, whichever is later. At a minimum, it must state when the marriage began undergoing an irretrievable breakdown, identify the property dissipated, and state when the dissipation occurred. The statute also provides that "no dissipation shall be deemed to have occurred prior to 3 years after the party claiming dissipation knew or should have known of the dissipation, but in no event prior to 5 years before the filing of the petition for dissolution of marriage." The Gerber order does not discuss these requirements.
- Consistency counts. The appellate court treated the trial court's different handling of each spouse's similar conduct as an additional reason to reverse.
- Know the case's weight. Gerber is a nonprecedential order. It shows how these issues are argued and decided and may be cited as persuasive authority, but it does not bind any court.
Sources
- In re Marriage of Gerber, 2024 IL App (2d) 220244-U (June 10, 2024): order on the Illinois Courts website (PDF)
- 750 ILCS 5/503 (disposition of property and debts; dissipation in subsection (d)(2); court-consulted professionals in subsection (l)): Illinois General Assembly
Related reading
This article summarizes one appellate order and general Illinois law as of October 2026. It is not legal advice about your situation, and reading it does not create an attorney-client relationship.
Frequently Asked Questions
How are businesses valued in Illinois divorce?
Courts use three primary methods: income approach (capitalization of earnings or discounted cash flow), market approach (comparable sales), and asset approach (net asset value). The appropriate method depends on business type, industry, and available data. Valuation is usually supported by a qualified valuation professional, and the court decides how much weight to give competing valuations.
Do I have to sell my business in divorce?
Not usually. Courts often award an operating business to the spouse who runs it and offset its value with other marital assets, but the result depends on the business, its value, the other assets available, and the factors in 750 ILCS 5/503(d). A sale is possible when no workable offset exists, so valuation and the overall division matter.
What is the difference between enterprise and personal goodwill?
Enterprise goodwill (reputation, customer relationships, brand value) is transferable and divisible as marital property. Personal goodwill (value attributable to the owner's individual reputation and skills) is typically not divisible. This distinction is frequently contested in professional practice divorces.
Written by Jonathan D. Steele
Chicago divorce attorney with cybersecurity certifications (Security+, ISC2 CC, Google Cybersecurity Professional Certificate). Illinois Super Lawyers Rising Star 2016-2025.
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