One of the region’s top divorce lawyers is predicting a change in the way people getting divorced handle their business assets after a City tycoon lost his bid to overturn a £9.5 million pay-out to his ex-wife because of the credit crunch.
Fund Manager Brian Myerson, 50, told the Court of Appeal at a hearing last month that if he complied with the order to pay his ex-wife Ingrid, he would be half a million pounds out of pocket instead of receiving £14.6 million from the couple’s total assets.
This was because he chose to take his settlement in February last year in the form of shares. They have since lost 90% of their value leaving his wife with 105% of the couple’s assets.
But three appeal judges have dismissed the case, ruling that the “natural process of price fluctuation, however dramatic” did not satisfy the legal test for a change in a settlement. Mr Myerson intends to appeal to the House of Lords.
Liz Allen, top divorce lawyer with south west regional law firm Stephens Scown, who specialises in high net worth cases, said: “I think the court is sending a clear message that it won’t bail out people who have basically bet the size of their divorce settlement on the strength of the market.
“In current law the courts should really divide risk-based assets like shares as equally as possible, but in practice the husband often keeps the business while the wife gets the rest. That’s what happened here, except the value of the business went through the floor because of the credit crunch.
“I think the courts will now be more wary and look to divide risky assets more evenly, and husbands will be wary of keeping the more risky assets and giving their wives cash. That said, with risky assets at the bottom of the market right now it may make it cheaper for the wealthier party to get divorced.”
Liz Allen was recently named on the 2009 Citywealth Leaders List and ranked in the Legal 500 and Chambers independent legal guides.