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The marriage was disliked by her father, who regarded it as an unwelcome alliance with Prussia, but her mother approved of it because Philip lived in Hungary. The relationship between Louise and Philip was not happy: Philip is said to have been authoritarian, and Louise responded to his authoritarianism by living a lavish lifestyle at the court of Vienna, where she attracted much attention. In 1880, she suggested the marriage between her sister Stephanie and Crown Prince Rudolf of Austria.
In January 1897, she scandalized Vienna by permanently leaving her husband, Prince Philipp, for Mattachich and taking her daughter with her. They traveled first to Paris, then Cannes, living in other destinations in the south of France and the rest of Europe. Her son became estranged from her, because he felt her actions had ruined his chance for inheritance. Her daughter soon left her mother at the advice of her fiancé, the duke of Schleswig-Holstein.
In 1898, Prince Philipp and Mattachich fought a duel in Vienna, first with guns, then with swords, in which the prince was injured.
Mattachich had been arrested in Zagreb and imprisoned for four years for forgery.
Louise and Prince Philipp were finally divorced in Gotha on 15 January 1906, almost eight years after Louise had begun divorce proceedings.
Estranged from her father, her husband, and her children, Louise's extravagant expenses brought her deeper and deeper in debt. Despite being daughter of arguably the wealthiest king of the age, she was forced to claim bankruptcy after it became known that Mattachich had forged the signature of Louise's sister, Princess Stéphanie, on promissory notes for jewelry worth approximately $2,500,000. As a result of this episode she was institutionalized in May 1898 for six years. Mattachich was sentenced to four years in prison for forgery. Once his sentence was over, he helped Louise escape from the asylum in which she was interned in 1904; they were together until his death in Paris. After Mattachich's death she was given a home by Queen Elizabeth of the Belgians, the wife of her cousin, King Albert I.