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If you own a business and are thinking of separating, the question of whether it will be divided, and how, is likely to be a concern. This issue was addressed in a recent high court case, shedding some light on the approach that the court could take.

In this case, the husband set up his first company in the early 90s, which he sold to set up a new company 5 years before meeting his future wife. At the point of divorce, the total assets were valued at £36million. The wife was seeking a settlement of £16million, however a key question related to the value of the company at the point the couple met and the best way to determine this retrospectively.

In the end the Judge, whilst accepting that the husband’s non-matrimonial contribution was significant, felt that the business had increased in value significantly during the relationship. After considering several ways in which to value the company, a broad-brush approach was adopted resulting in 40% of the assets being considered as wholly owned by the husband. The remaining 60% was considered matrimonial property and therefore appropriate for division. The wife received an ultimate settlement of £9million.

This case highlights the need for anyone who has significant assets before marriage, including companies, to take early legal advice on options such as nuptial agreements. This should include evidence as to the value of the assets at the point of the agreement and provision for any increase in their value.

There is an increasing number of cases where problems have arisen due to lack of early and commercially focused legal advice, with clients and companies facing the impact and fallout from divorce.

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