Software pioneer's fortune at stake in divorce litigation. (Up Front).

Peter Norton may be a whiz at cleaning up a hard drive, but that hasn't helped him tidy his messy divorce proceedings.

The Buddhist monk-turned-software guru, who filed for divorce in 2000, is in the midst of a nasty trial with his ex-wife over what portion -- if any -- of the millions he made in the sale of his company she is entitled to.

The trial, begun last month in L.A. Superior Court, could run until July. While the Nortons sorted out the issue of custody of their two children and the disposition of their former home, Eileen Norton claims she is entitled to a community property settlement that could bring her as much as half of the $70 million Norton received in the sale of Peter Norton Computing Inc. to Symantec Corp. in 1990.

Peter Norton, who formed the company around his creation of the Norton Anti-Virus and Norton Utilities software programs, claims ownership of all proceeds from its sale. He has argued in court that the proceeds should be excluded from California's community property regulations because he founded the firm a year and a half before the marriage.

"These people got married at the end of 1983," said Mark Patt, a partner at Trope & Trope representing Peter Norton. "There's no dispute the company went up in value from when he first formed it to 1990. The dispute is whether the increase and value after the marriage is community property."

Patricia Phillips, senior counsel at Morrison & Foerster LLP representing Eileen Norton, declined to comment on the case, citing confidentiality orders.

But according to documents she filed with the court, Eileen Norton says she is entitled to community property because she quit her job to help Peter Norton build the business. Also, about $39 million of the estate came from income after the sale of PNCI, making it community property, according to divorce papers filed by Phillips.

That $39 million included royalty payments from books, magazines and newsletters, as well as software licensing of copyrights and trademark licensing fees.

Saffron to software

Norton was a Buddhist monk in the 1970s when he came up with the idea for a software program that could find missing data on computers. He formed his company in 1982 with $30,000 and an IBM computer. A year later he married Eileen Norton, a Watts schoolteacher.

They raised two children in a 15,000-square-foot Santa Monica home with a two-bedroom guesthouse, a tennis court and a pool, according to reports in both the L.A. Times and Wall Street Journal. They also had homes in Martha's Vineyard and New York, according to the Associated Press and New York Times. By 1998, they had amassed a collection of 1,600 pieces of contemporary art.

Peter Norton filed for divorce in July 2000.

In October 2001, the Nortons sold their Santa Monica mansion for $12.5 million. According to divorce papers, Eileen Norton received the proceeds of the house to be used toward a $4.5 million house on Adelaide Drive in Santa Monica.

An L.A. Superior Court judge separated the issue of proceeds from the sale of PNCI from the Nortons' other assets, which have yet to be argued, according to divorce papers.

While the value of the Norton estate is uncertain, both sides agree it is at minimum $100 million. A decision on the assets rests largely on the outcome of the current trial, Patt said.

Phillips contends in court papers that the Norton estate could be worth closer to $150 million to $200 million, opening a Pandora's box of property disputes.

But that box may already be gone.

Just as Norton's lawyers were pushing to go to trial in March 2002, it was discovered that 1,800 boxes of PNCI-related material under the control of Symantec were destroyed, according to divorce papers filed by Phillips at that time. Those boxes, she claims in court papers, could have been relevant to the divorce.

Phillips also claims in divorce papers that Peter Norton's attorneys had a chance to view the contents of the boxes before they were destroyed.

Patt, Peter Norton's attorney, denied allegations they were involved in the destruction of the documents.

"They insist on creating a red herring by trying to create a misimpression that somehow our client, or us, or anybody working for him, caused the destruction of boxes," Patt said. "Neither our client, nor a representative of him, had anything to do with it. Every person related to Symantec deposed about this has acknowledged that."

Patt confirmed that someone from his office inspected "samplings" of the boxes before they were destroyed, but he said the contents of the shrink-wrapped boxes were only inventory, not financial documents.

Symantec, in a statement sent to the Business Journal, said it "immediately ordered the preservation of documents... including contracts involving Peter Norton and/or Peter Norton Computing. Mr. Norton's attorneys noted that they may have objections to some materials that Symantec would produce. We agreed to let the court determine the relevance of any materials, to which Mr. Norton's attorneys objected."

Before the court or Eileen Norton's attorneys could review the boxes, however, they were "inadvertently destroyed as a result of an internal clerical error," Symantec said in its statement. Symantec is cooperating with Phillips' inquiry into the circumstances of the destruction, according to the statement.

If the court sides with Peter Norton and finds he is entitled to the full proceeds of the sale of PNCI, he could potentially claim all the assets purchased with sale proceeds are also his, Patt said in divorce papers.

That could be extended to the balance of the art collection, the bulk of which they donated three years ago, before divorce proceedings commenced.

The couple donated their largest group of artwork - about 1,000 pieces - to 29 museums, including the Los Angeles County Museum of Art, Carnegie Museum in Oxnard, the Laguna Art Museum and the Museum of Modem Art in New York.