Determining and enforcing a ‘fair share’

The spouses of business owners can come away from a divorce with less than their fair share unless they receive professional help.

An example of where such help has been invaluable is in the case of Sir Frederick Barclay and Lady Hiroko Barclay, who are divorcing after 34 years of marriage.

At the original hearing earlier this year, Lady Barclay was awarded £100 million in a settlement, to be paid in two £50 million tranches.

However, following what the judge described as “reprehensible” behaviour by Sir Frederick following his judgement, Lady Barclay has gone back to court.

Getting divorced, particularly if the marriage has lasted many years, is a traumatic experience in itself but the emotional turmoil can be made worse if one spouse feels hard done by.

In the case of the Barclays, the court-enforced sale of a luxury yacht ended with Sir Frederick keeping the proceeds of the sale himself instead of adding them to the assets to be shared with his wife.

While very few divorces are in the same financial sphere as the Barclay’s, it is sadly the case that one or the other party, all too often, flagrantly ignores what the court has ordered.

Frustratingly, the courts can sometimes be reluctant to take firm action against defaulting parties, but that is not always true and, in a recent case in Northern Ireland, the judge committed a husband to prison for three months for contempt of court in family proceedings.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “Locking up a spouse may give the other party a sense of satisfaction but it may do little to unlock assets that have been hidden or which are not being realised.

“For that reason, another option worth considering is the appointment of a court receiver to take control of the defaulting party’s assets. Such appointments are a draconian step but, in our experience, they can be very effective.

“Sometimes even the threat of a receiver can be sufficient. In one case, we were appointed over the shares in a family company and convened a shareholders’ meeting to remove the husband from the board of directors.

“Perhaps unsurprisingly, the money he had been refusing to pay his ex-wife materialised just before the meeting was due to commence.”

Posted in Forensic.