Allegations of drug use, infidelity complicated Broadcom co-founder Henry Nicholas' divorce

Newly released documents in the divorce of Broadcom Corp. co-founder Henry T. Nicholas III reveal harsh battles with his former wife, Stacey, over how to divide the couple's $1 billion in community property, alleged drug use and her relationship with the family's security chief.

The documents show that Stacey Nicholas' recent efforts to force a trial to divide the estate have been complicated by the pending criminal prosecution of Henry Nicholas.

Federal indictments have accused Nicholas of distributing illegal drugs to friends and business associates, and of manipulating Broadcom stock options to provide $2.2 billion in benefits to employees of the Irvine microchip company without disclosing his actions to other shareholders.

Also snarling efforts to divide the couple's community property have been demands by regulators and Broadcom shareholders that Henry Nicholas potentially repay more than the couple's net worth.

The filings show that Stacey Nicholas sought to have the assets divided equally first, so that her ex-husband alone would face any potential liability from the options cases.

In one filing, Stacey Nicholas said she had never heard of the issue of options backdating at Broadcom before reading about it in a newspaper.

The divorce records were unsealed at the request of The Times, which spent two years arguing in court that the case should be available to the public as are thousands of other family-law cases.

The records that the Nicholas family fought to keep private included allegations of drug use by both parties.

In one filing, Stacey Nicholas accused Henry Nicholas of abusing cocaine, methamphetamine and ecstasy and said she should be awarded primary custody of the couple's three children as a result. She said Henry Nicholas' drug use was one of the reasons she had sought to end the couple's marriage.

To support those claims, Stacey Nicholas submitted a declaration from the Nicholas family security officer, Timothy Langan.

In his declaration, Langan said that on Feb. 25, 2006, he was summoned to the Nicholas family home on Rodeo Circle in Laguna Hills after Henry Nicholas paid an unannounced visit there. Langan said he was told that one of the couple's children had found a fanny pack containing cocaine on a desk in Henry Nicholas' library.

Langan, a former Los Angeles County police officer, alleged that Henry Nicholas stated that there were other drugs in his office and that he would "show me [Langan] where they were." Langan said that Nicholas "went behind his desk, crawling on his hands and knees, looking underneath the drawers." There was no indication in the declaration that Nicholas found any drugs.

After Henry Nicholas left the home, Orange County sheriff's deputies arrived and conducted a test that confirmed the white powder found in the fanny pack was cocaine, Langan said.

No criminal charges have been filed in connection with that episode. John McDonald, a spokesman for the sheriff's department, confirmed Thursday that the deputies had responded to the house that evening.

Henry Nicholas' attorney, Rich Howell, issued a written statement disputing the claims made by Stacey Nicholas and Langan in the court records and said the drugs found in the Laguna Hills home did not belong to Henry Nicholas.

"Dr. Nicholas intends to prove that the allegations contained in Stacey Nicholas' and Tim Langan's declarations are false," Howell said. "Dr. and Mrs. Nicholas are in the midst of an acrimonious divorce. With billions of dollars and the custody of the children at stake, Mrs. Nicholas has proven that she is willing to say and do anything."

Henry Nicholas' attorneys also claimed in court documents that Langan had become romantically involved with Stacey Nicholas. A spokesman for Stacey Nicholas said Thursday that the relationship did not begin until after the incident with the fanny pack.

In his court filings, Nicholas contended that his wife, too, had used drugs.

In an Aug. 4. 2006, declaration in the divorce case, Nicholas said a man -- whose name was redacted in the document -- "has witnessed Petitioner [Stacey Nicholas] use drugs on numerous occasions from 2000 to 2004."

"He has seen her use cocaine, ecstasy and nitrous oxide," Nicholas said. "He has seen her stay up all night, drink excessive amounts of alcohol with little effect and have an abnormal amount of energy."

In response to the allegations, Stacey Nicholas' spokesman, N. Christian Anderson, said: "The record shows that Nick has made outrageous and relentless allegations against Stacey, all of which have been proven unfounded at this point."

The back-and-forth allegations of illicit drug use prompted the couple to each submit to drug testing in 2006, according to court documents. All of the tests were clean, the records show.

Nicholas co-founded Broadcom in 1991 with Henry Samueli, current owner of the Anaheim Ducks hockey team.

Stacey Nicholas first filed for divorce in 2002, 15 years after they were married, but the couple reconciled. They separated again in 2005 and Stacey Nicholas revived the divorce proceedings. The marriage was dissolved March 21, 2008.

It was during the couple's reconciliation that Henry Nicholas left Broadcom. He discussed this decision in a 2006 court declaration that was made public this week.

"I stepped down from a once-in-a-lifetime position as CEO of Broadcom in order to salvage my marriage and strengthen my relationships with my children," Nicholas wrote.

A battle over their children was ultimately settled with a joint-custody agreement.

That left the division of their community property, which court filings say is about $1 billion, as the final issue to be decided -- one that had generated thousands of pages of filings this summer alone. A trial is scheduled for July 2010.

The public's right of access to divorce documents in California was established in May 2006, when the state Supreme Court rejected a three-year effort by billionaire Ronald W. Burkle to deny the Los Angeles Times access to the records of his divorce proceedings. Burkle had argued that the records should be sealed to protect the safety of his children.


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