Q&A How do I ensure my ex is not running down the business to pay less in our divorce settlement?

Q.        I am currently going through a divorce from my husband. I am hoping to agree a financial settlement with him, but he seems to be deliberately running the family business into the ground to make the value look far less for the financial remedy proceedings. What can I do?

A.        This is unfortunately something that legal practitioners in matrimonial finance and the family law Courts encounter frequently. Often, a business owner will seek to make the company look less successful in order to convince the Court that they are far less well off than they are in reality. This could be by deliberately stopping taking orders and accepting income, or diverting income, and being less than frank about the value of the business assets to give a false or murky outlook. Matrimonial lawyers often see assets and/or profits deplete over the separation period and during divorce proceedings, making it difficult to ascertain the true value of a business.

The Court will of course need to see accounts from previous years, and full disclosure should be provided. An expert valuation may need to be undertaken, and it will be important for the expert to know how successful the business was prior to the divorce and what the reasons are for any sudden downturn. Based on the evidence the expert and the Court will then try to ascertain whether the decisions made within the business would have been made had there been no separation. A difficult determination to make.

There may be costs implications and penalties if it is decided that a party is guilty of litigation misconduct or has not provided full and frank financial disclosure. The important thing is to ensure you instruct a matrimonial lawyer with experience in financial matters and businesses as soon after the separation as possible. They will be able to advise you on your available options.

This question has been answered by Alison Peters, a Partner with GHP Legal.  If you would like to speak to someone about this or any other legal matter, please visit our website www.ghplegal.com and use the contact us form, or call us on: Wrexham 01978 291456, Llangollen 01978 860313, Oswestry 01691 659194 

Alison Peters

Alison Peters


A Partner in our Family and Matrimonial department in Oswestry