Telephone
Helpline
Discussions
& Chats
Case
Histories
Available
Downloads

You are not logged in.

Facebook Twitter Google Digg Reddit LinkedIn Pinterest StumbleUpon Email

In order to post messages to this discussion board click here to login/register

Back

Home Register

JohnR

Joined:
Posts:
Location:

Message

Subject: get it valued or not? Posted: Thursday, December 5, 2013 - 12:54:15

The other problem is that Why and her husband only own 50% of the shares. So they cannot actually sell the business at all - all they can sell is their shareholding. Other information provided is that the business is some sort of clone of another business which is owned outright by the other 50% shareholder, and there are ties and links between the two. I would suspect that in those circumstances, the business might well have little or no capital value for the purposes of family law.

Replies

JohnR

Username: JohnR
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:15

Are you now suggesting that the business (which you and your husband only half own) is ordered by the family court to pay you ongoing guaranteed dividends on your shareholding.

sometimesitdoesn'twork

Username: sometimesitdoesn'twork
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:55:03

You really need the advice from a lawyer who understands business assets and has sight of the relevant documents. Business valuations can be complicated, very expensive and not all that relevant in determining family court cases. See White v White [2000] 2 FLR 981; http://www.familylawweek.co.uk/site.aspx?i=ed206 The accounts of a business cannot by themselves give an accurate picture of its true worth as the values are historical and take no account of how the business is currently trading. There may have had a negative impact on the profitability of the business since the last set of accounts were prepared. This is taken into account along with the business strategy, its future prospects and the prevailing market conditions to arrive at a value which is fair to both parties. The consideration is whether you (or your lawyers on your behalf) can get a good handle on the value or whether an expert valuation is required and if advice is also needed on the tax implications. Family courts have the power to order a transfer of assets between the divorcing parties, periodic payments and pension sharing but cannot do as you propose. If you retain a shareholding in the business it will be subject to the laws governing business and you will be bound by decisions made by the other shareholders . You may not get any dividends or if the company has no capital value they both can jump ship and start a new company without you which leaves you in a vulnerable position, far more so than if you have a court order for spouse maintenance.

sometimesitdoesn'twork

Username: sometimesitdoesn'twork
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:55:03

Just to clarify, spouse maintenance stops when the recipient remarries, not the payer. Also the courts may order periodic payments secured against something else such as property if it is determined your husband might disappear to UAE or somewhere else out of the reach of E&W courts.

why?

Username: why?
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:16

thanks folks. yes john, i had thought 2 ways. either the business continues to pay me or the spousal maintenance has no clauses in it with regards to sm. surely if h agrees tothis then the court can lift the usual triggering events and an alternative period can be agreed, such as youngest child reaching 18or 21?

why?

Username: why?
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:16

or business pay deferred lump sums so i am not dependent on h on a long term basis. trust being the issue. he is 51, may as planned, retire early, live abroad as planned and now planning to marry lady from poland.i cant depend on him on a long term basis.

why?

Username: why?
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:16

another question. prior to setting up the main business h was in a legal fight regarding his employment and received a pay off. this money was used as capital to get started and i believe he may or may not have taken it back from the business once the business was doing well. this money would be classed as a marital asset i assume and there for i would expect that i am entitled to my share of that? any ideas?

sometimesitdoesn'twork

Username: sometimesitdoesn'twork
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:55:03

You need to focus on what can actually be done under the law rather than what you think can be done. There is the possibility of capitalising maintenance and your husband paying deferred lump sums but there are no powers to order a business to pay deferred lump sums or maintenance. The family courts can only order a transfer of assets, lump sum payments and periodic payments between the two parties divorcing. See s23(1) and 24(1) MCA 1973; http://www.opsi.gov.uk/revisedstatutes/acts/ukpga/1973/cukpga_19730018_en_4#pt2-pb2-l1g29 Under s28(1)a periodic payments for a spouse extending beyond the remarriage of the payee is specifically barred. There is no way around that one.

why?

Username: why?
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:16

you refer to court being able to transfer assets. i am trying to determine my right to the value of the shareholding. h is suggesting it was only done on advice from his accountant for tax purposes and trying to suggest i do not have a right to any value of the shareholding. surely if it was a marital asset that was used to get the business started then that marital assets contributed to the business and therefor my share of the marital asset gives me a right to the value of my shareholding? did that make sense? also h i believ is looking to buy a house. am i correct in saying that his house could be used as security against any payments not met?

JohnR

Username: JohnR
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:15

The bottom line is that whatever the two of you own between you are matrimonial assets. I think the problem is that the business probably has little net asset value, and so has little capital value for the purposes of a matrimonial settlement. If that is the case, then you are stuck with it, no matter how inconvenient you might find that. The amount of money that was originally invested in the business is irrelevant. Money put in like that does not acquire some sort of family law ring-fenced status such as it is still there even if the business has no capital. On the information provided, my perception is that no matter how inconvenient it might be, it is possibly the case that the business is purely an income generating enterprise with no capital value. Furthermore, the nature of the business and its position in the context of other businesses owned by the other shareholder, means that its future might be insecure and such that it cannot be made secure. Repeatedly making assertions and arguments that would require the court to make orders that it has no power to make is not going to provide a remedy for that.

why?

Username: why?
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:16

ok. would i not then at least be entitled to my share of the funds that went into the business?

why?

Username: why?
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:16

what if it could not have been possible for the business to exist without that marital asset that was invested? does this not give anotther legal angle?

LazyLizzie

Username: LazyLizzie
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:16

I don\'t understand why you feel that you are entitled to a share of the funds that \'you\' put into the business? If, as I understand it, you have been married for a \'long\' time - more than just a few years, then all your assets and liabilities that you jointly own NOW are to be shared out. The source of those funds is irrelevant (unless its illegally gained). You chose, at some time in the relationship that you should invest that money in that way - its done, now you need to move on. So what if you believe that the business would not have existed without your investment? My ex could say that the mortgage on our home would not have been paid but for his earnings (I would have to agree wth him). Does that entitle him to have more of the house when we part? As I see it you should be focussing on what you jointly have now - not where it came from. Valuing the business will always be a difficult issue as it is virtually impossiple to do and justify the figure that is given. Many businesses can, as John has already said, generate income yet still have virtually no resale value. Finding a buyer, particularly at this moment in time may be difficult if not impossible. The nature of the business may mean that without your ex at the helm it would not have the same level of success. You really need to be guided by the professionals who are in full possession of the facts - we only have the bits that you choose to reveal to us. I suspect that for you to reveal too much here would be unwise - certainly if I was your ex and felt that you were detailing private business information freely here I would not let it continue. It is unlikely, in my honest opinion, that you will come out of the divorce believing that you have received a fair settlement. This being the case you must aim for getting enough to live on and enable you to move on with your own life.

JohnR

Username: JohnR
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:15

The other problem is that Why and her husband only own 50% of the shares. So they cannot actually sell the business at all - all they can sell is their shareholding. Other information provided is that the business is some sort of clone of another business which is owned outright by the other 50% shareholder, and there are ties and links between the two. I would suspect that in those circumstances, the business might well have little or no capital value for the purposes of family law.

why?

Username: why?
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:16

i do understand what you are both saying. lizzie. i am not saying i am entitled to more of the business than my h, as your example regarding the mortgage suggests. what i am sayinng is, surely my investment as a marital asset qualifies me for that share? he is saying i do not have any shares even though i am down as having 25%. but im not going to go on about it any more becauuse clearly it doesn\'t seem to make a difference. for some reason he thinkjs he is entitled to his shares and im not entitled to mine even though we both contributed equal amounts to the business. his business partner does not work for the business so why would he have a shareholding if there was nothing to gain from having a shareholding. he put in the same amount as us after all, not any more.

sometimesitdoesn'twork

Username: sometimesitdoesn'twork
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:55:03

Evidence of a financial contribution to a business is important because it shows there was a direct interest in a business and a shareholding isn\'t just an accounting exercise. A wife\'s direct or beneficial interest is established through contributing financially and/or working in a business it is treated differently than when a shareholding is just an accounting exercise. The point we are trying to make is you may be wasting your time maintaining an interest in this case because the directors decide whether or not to pay dividends and H and the other shareholder could run this company down and divert the business to a new company, particularly if there is no capital for them to lose. \"am i correct in saying that his house could be used as security against any payments not met?\" The family courts can order secured periodic payments so the house can be used as a lien for security over spouse maintenance especially if H is likely to move outwith the reach of the courts.

EnglishRose

Username: EnglishRose
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:16

I deal with businesses a lot and agree with the above - they are often not worth much. When my father died last year I did wonder if his business (him) was a saleable asset and we decided now. When I divorced we decided mine (and my ex\'s) weren\'t either -they were simply income driven. On the other hand people do buy and sell businesses for capital sums all the time (you can see examples of sale prices etc on various web sites) so it juist depends. A shareholding which is not over 50% can be worse than useless. One answer is that he simply transfers 25% of the shares to you so that you gain or lose as the business goes forward. he does not have to give you cash instead of shares and if you take shaers then if it does well you gain if it does badly you lose and so does he. I have advised a lot of people with minority shareholdings or even 50% and they might well want to get out but they cannot sell, not allowed to sell even if they could find a buyer which has an impact on what the shares are worth,. Or is there a creative solution? Could part of the bsuiness be transferred into your name, perhaps 25% of its contracts or asstes and then you go off and run it and do well and leave him with his 25% to do well or badly in.

why?

Username: why?
Joined:
Posts:
Location:

Message

Posted: Thursday, December 5, 2013 - 12:54:16

thanks er. this has all been very helpful.
You need to login / register to post a reply.