Company assets in divorce settlements
In a landmark ruling the Supreme Court has ruled that company assets could now be considered in divorce settlements. The divorce case of Yasmin and Michael Prest – settled in June – is hugely significant as it marks the first time the courts have ruled that the assets of the husband’s company (Petrodel Resources) be transferred to his ex-wife.
Up until now, the law has stated that companies are separate legal entities from individuals, meaning that, in divorce cases, the court could not order a company to transfer property or other assets to the husband or wife, although they could order shares to be transferred.
In the case of Prest v Petrodel Resources, however, this was overruled. Mr Prest owned offshore properties to the value of £37.5 million and Mrs Prest was awarded £17.5 million in what the court considered a fair settlement. While the large sums of money involved meant the case was brought to national attention, the ruling could be equally applied in simpler divorce cases.
Can I ask the Court to order my husband’s company to transfer assets to me as part of our divorce settlement?
This would depend on the circumstances of the divorce case. In the Prest case, the Supreme Court made it very clear that it had only made this decision because it found Mr Prest owned and controlled the companies and so was the true beneficial owner of the properties. In other words, transferring these assets to his wife would not affect anyone else. In addition, he and the companies had been evasive about providing information as to the source of funds which the properties had purchased.
This evasion was frowned upon by the Supreme Court, which became suspicious that the husband was concealing his entitlement to the properties and therefore ordered they be transferred. In doing so, the Court ruling removed the protection of offshore assets and simultaneously made the point that those who conceal facts from the Court put themselves at a disadvantage.
However, this ruling will not become the norm. In future, the husband or wife will need to own or control the shares and the company affairs and it must be made clear or likely that he or she, rather than the company, is the only person entitled to the assets held by the company.
What should I do if I think I can obtain such an order in my divorce case?
You should discuss all the circumstances of your case and the situation fully with one of our experienced divorce solicitors, who will advise you as to your prospects of success and how to proceed. If you believe you are in such a situation, please call Burt Brill & Cardens on 01273 604123 or email firstname.lastname@example.org You can also visit us in person in one of our offices.
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