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The ex-wife of a multimillionaire former Airbnb boss is battling for a £5million divorce payout after claiming she signed a deal while heavily medicated on Xanax – and the former deal left her in a state of extreme poverty.

Business executive Martin Reiter, who helped mastermind Airbnb's international expansion, married interior designer and cultural history expert Caroline Bauer-Reiter, 41, in 2012.

The couple's marriage broke down in 2018, later signing a financial agreement in Germany which left Ms Bauer-Reiter with no share of her ex-husband's £17.3million fortune and no personal financial support beyond 2028.

The divorcee has since launched a legal bid to tear up the deal, claiming it was 'egregiously unfair' and was signed while she was suffering severe psychiatric illness, with her doctor allegedly supplying enough Xanax tablets 'to sedate a horse'.

Her lawyers also argued that she was unable to work due to physical and mental health issues.

These claims were countered by Mr Reiter, who argued her social media presence, which includes synchronised dance routines, showed she is of good health.

This came after a Family Court judge last year agreed to substantially increase Ms Bauer-Reiter's settlement.

She was awarded a £2.55million lump sum, £96,000 a year in maintenance for 14 years and more than £1million towards her legal bills, on top of child maintenance.

Caroline Bauer-Reiter is battling her ex-husband Martin Reiter for a £5million divorce payout after claiming she signed a deal while heavily medicated on Xanax

Yet, two years later, the couple seek to overturn it. Ms Bauer-Reiter is now fighting for double the lump sum amount, £5million, while her ex-husband is fighting to overturn what his lawyers describe as a 'wholly excessive provision' and reinstate the original German agreement.

The Court of Appeal heard this week the pair married in Austria in 2012 before settling in Berlin in 2016, although they travelled extensively with their two daughters, aged nine and 10.

Following their separation in 2018, they signed a financial separation deed in Germany in 2019.

Under the agreement, Ms Bauer-Reiter received no capital payment. Instead, Mr Reiter agreed to pay her Berlin rent until 2028, provide personal maintenance of around £1,800-a-month until August 2024 and continue supporting their children financially.

The divorce was granted in 2019 by consent in Germany, with both parties confirming that all financial issues had already been agreed.

Mr Reiter remarried in March 2023 and moved with his new wife into a £11.5million home in Holland Park, west London.

Two months later, Ms Bauer-Reiter relocated to London with the children after securing permission from a German court, before launching fresh proceedings in English divorce courts seeking a larger financial settlement.

At a hearing last October, Family Court judge Mr Justice Cusworth found Mr Reiter's net worth stood at £17.3million and ordered him to pay his former wife £2.55million, annual maintenance and more than £1million towards her legal costs.

Mr Reiter remarried in March 2023 and moved with his new wife into a £11.5million home in Holland Park, west London (pictured)

The ruling is now being challenged by both former spouses at the Court of Appeal.

Representing Mr Reiter, barrister Michael Horton KC argued that the judge had gone far beyond merely varying the German agreement.

He said: 'The judge considered that a substantial variation in terms of the maintenance provision was justified...he did so because of the wife's current and likely future inability to work and because the wife had moved to London and this had been judicially permitted.'

Arguing against the wife's claim not to be able to work due to her health, the barrister said: 'The husband's case was that the evidence...showed that the wife was living a perfectly normal life.

'The husband had seen evidence on the wife's social media, including an elaborate synchronised dance routine that contradicted her claims to poor health.'

Regarding more cash being awarded due to London being more expensive than Berlin, he likened it to choosing to move from a cheap to expensive area of the UK – such as Macclesfield to Mayfair – and demanding more money.

'This was a self-created increase in needs and the judge was wrong to allow this to justify an increase in the provision,' he argued.

'The substance of the German deed was that the wife would meet her own needs from her own significant resources by a time not long after the children attained majority.

'The enormity of the difference between the provision in the German deed and the judge's order itself demonstrates that in reality this was no variation or modification but a decision where the judge has discarded the German deed completely and started from scratch.

'Just because there had been a change of circumstances, that did not give him free rein to consider the duration and quantum of provision as if starting from scratch.

'The husband submits that the scale of the increase from the German deed is excessive, coming six years post-separation and where the husband has remarried and has two more children.

'His position has since worsened even more. His net worth is now under £5million. He estimates that paying the interim order he has liquid funds to last only three months.'

Rebecca Carew Pole KC, representing Ms Bauer-Reiter, however argued that the millions her client had now been awarded is a 'modest' sum and 'unremarkable given the husband's overall wealth', pointing out that he lives in a 'splendid' house in Holland Park, worth £11.5million.

'It is central to the wife's position...that the German notarised agreement was procured unconscionably and its terms were egregiously unfair to her,' she said.

'The agreement...had been procured as a result of undue pressure, at a time when the wife was seriously psychiatrically unwell, vulnerable and heavily medicated.'

She claimed that during the signing the wife was 'very distressed...crying and had a panic attack' and that her then psychiatrist 'had administered Xanax before the meeting and after she had a fresh distressed episode at the beginning of the meeting that she and [the psychiatrist] went outside the room and he forcibly administered her with two further Xanax pills in the toilet'.

Xanax is a strong, fast-acting prescription tranquiliser often used to combat anxiety issues.

'The agreement was vitiated as a result of the circumstances in which it was procured, which were unconscionable,' she added.

The husband's barrister had also described the incident, saying: 'The parties used the wife's treating psychiatrist...as a mediator...the deed was executed before the notary on July 5, 2019. The wife's oral evidence was that [the psychiatrist] had given her tablets 'enough to sedate a horse.'

Insisting that the wife cannot support herself, her barrister said she has Ehlers-Danlos syndrome, 'a rare debilitating genetic condition that...disables her from working'.

'The wife's condition deteriorated significantly as a result of her two pregnancies,' she said.

'The wife's inability to work due to her EDS is at least in part a relationship-generated need, given the deleterious effect on her health of the pregnancies.

'The judge accepted the wife's evidence about her physical and psychiatric illnesses.'

Ms Carew Pole went on to claim that while Mr Reiter claims there has been 'a dramatic collapse' in his fortunes, the reliability of his evidence is 'seriously in doubt'.

'In this case, the wife is suffering both hardship and a manifest injustice. The husband has been left with the entirety of the fruits of the marriage and the wife in penury.

'The English court is not prevented from making further provision. The wife was left virtually destitute following the parties' divorce in Germany.'

Ms Bauer-Reiter's lawyer asked the court to not only uphold but reconfigure the payout awarded in the Family Court to give the wife a capitalised lump sum of around £5million.

The judges, Sir Andrew McFarlane, Lord Justice Moylan and Lord Justice Lewis, reserved their ruling on the case after a day-long hearing, to be given at a later date.