Wife's claim for half of husband's $540 million shares unsuccessful

The Family Court have departed from the sharing principle in a recent case involving an extremely wealthy husband and wife.

The wife came from a wealthy family and the husband was the Chief Executive of a successful company. During the course of the marriage the husband’s shareholding increased dramatically. It was subsequently sold in 2016 and his shares released approximately $540 million.

Their marriage had broken down in 2015 and the wife went on to petition for divorce and apply for a financial remedies order. The wife’s position was that she should receive half of the $540 million on the basis of the sharing principle.

The husband opposed this position on a number of points:

1) the parties had signed a separation of assets form before their marriage. He suggested that this amounted to a prenuptial agreement and should be upheld;

2) He owned the shares before the parties married and as such these were not matrimonial assets and should not be subjected to the sharing principle;

3) He had put in place all of the building blocks to make the company successful before the parties had married;

4) His exceptional role in the success of the company amounted to a special contribution and should entitle him to a greater than equal share.

The Court made the following decision:

• The wife had not fully understood the consequences at the time she had signed their ‘pre- nuptial’ agreement and as such it would be grossly unfair to hold her to this. No weight was therefore attached to this document;
• The Court did not agree that the husband’s shares should be treated as non-matrimonial assets and therefore not capable of being shared. To exclude these assets entirely would undermine the principle of fairness and equality. However, the Court did acknowledge that the shares were generated by the husband’s business activities and highlighted that the nature and source of assets can be taken into consideration in deciding how they should be shared;
• There had been a significant latent potential in the company at the date of the marriage;
• The husband’s contribution to the growth in the value of the business assets during the marriage did fall within the concept of special contribution and was enough to justify a departure from the sharing principle.

Based on the above, the Court concluded that a fair outcome would be for the wife to receive a lump sum payment equivalent to 25% of the difference between the husband’s share of the proceeds of sale of the company in 2016 and the value of his shares at the date of the marriage.

The Court found that a departure from equality was justified in this case most notably due to the wealth generated by the husband’s business which fell within the concept of special contribution.

For further information or for a free initial telephone consultation please contact Alex Mansfield in our Wolverhampton office on 01902 328365 or by email to AMansfield@georgegreen.co.uk or
Rachel Baker in our Cradley Heath office on 01384 384580 or by email to rbaker@georgegreen.co.uk.