Top North East Family Law Specialists, Major Family Law comment in the Journal when people go through a divorce, the division of the parties’ finances can be a daunting matter. With so many issues to resolve, the additional complication of one party owning a business can be overwhelming.
Joanne Major, Principal and Founder at Major family law, is a successful businesswoman who understands the complexities of corporate structures. Having dealt with many family breakdowns she knows how important it is to ensure that the business is properly valued and accounted for.
The way that the courts deal with the existence of the business can depend on many factors. Joanne is well versed in the recent Supreme Court decision in the matter of Prest and Petrodel. In this case, the husband was a rich businessman and all of the assets of the family were held in a corporate structure. Although the court observed the protection of the veil of incorporation, it found that the company held the assets on trust for the husband. The court therefore ordered the husband to pay the wife a substantial capital sum based on those assets. This is a landmark case that every business owner needs to be advised of when going through a marital breakdown.
When divorcing parties both own shares in a business or are partners, matters can be even more complex. Particularly so, if the company needs to survive and succeed to produce an income to maintain the family’s lifestyle. This is common where the company or partnership can’t be sold to extract the value and neither does it have liquidity to “pay out” one party their share. These types of cases need to be handled by a shrewd and experienced lawyer to ensure that all variables are accounted for.
Increasingly in these cases, the family court has started to be transparent about the parties’ finances, asset positions and the process of the case. This means that business owners need to think carefully about dealing with their financial matters in the court arena as this can become a very public affair. Within the last 6 months, Khoo Kay Peng, the Laura Ashley tycoon and Chris Hohn, hedge fund manager, have both been told that the details of their marital breakdown and financial matters will be made public. This is unusual but it could become the norm, with the possibility that in the future the press will be given limited court documents in addition to being at court when hearings are ongoing.
In order to avoid the public gaze, parties going through a divorce who want to protect their financial affairs from the public gaze, have access to various non-court dispute resolution processes. Joanne is able to discuss the pros and cons of these options including the possibility that arbitration could be an appropriate solution. Family arbitration ensures that if the parties need to appoint a private decision maker, their financial matters will be confidential. Family arbitration is a new process; it provides a binding solution without the need to have a potentially public hearing.
To protect your business and understand better the implications of divorcing or separating, contact Joanne Major at Major Family Law, the Divorce and Family Law Specialists, 12 West Road, Ponteland, Newcastle Upon Tyne. T: 01661 82 45 82 www.majorfamilylaw.co.uk. Twitter: @majorfamilylaw