Over-Simplistic Approach Produces Challenge

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Disputes over the valuation of assets in divorce cases are common, particularly when there is a family company involved. In such cases, the judges need to demonstrate financial nous and analytical ability if their decisions are not to be challenged, as happened recently.

In the case in point, a couple owned a company, with the husband having a 51 per cent share of the equity. The couple had been married for 13 years and have no children. The company was valued at a little over £200,000 by the judge in the District Court and the husband earned about half that sum annually from it.  The wife’s income marginally exceeded £1,100 per month.

The judge made an order whereby the husband was required to buy out the wife’s interest in the company for £99,600 and make monthly payments to her of £2,500. She was also to have the former matrimonial home transferred to her.  In addition a pension sharing order was made.

The husband disputed the decision on several grounds, not least because the judge had not taken into account either the tax payable on the share transfer or the difficulty in actually making the lump-sum payment to the wife. He had also valued the company on a ‘sale’ basis, when it was not for sale and the husband’s involvement was necessary to keep it profitable. It had also suffered a dip in profits which the judge considered to be transitory without giving any compelling reason for his decision.

On appeal to the Family Court, a rehearing was ordered.

For advice and assistance in negotiating any financial settlement, contact our team 01639 885261

 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.