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Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 33814
Experience:  I have been a solicitor in High Street Practise since 1985 and have specialised in Family Law for the last 10 years
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My wife and I are headed final hearing in divorce. The

Resolved Question:

My wife and I are headed for a final hearing in divorce. The main point of contention is a family business (limited company) currently in her control. In the period I have not been involved in the business (about two years) she has diluted her shareholding (which is our joint matrimonial asset) from 92.5% to 47%, by issuing shares to newcomers (her sisters), at an estimated undervaluation of £277,000. This dissipation of joint assets of £277,000 can be easily established from the company's accounts. If the judge were to accept this what action is she/he likely to take in the hearing as a remedy? I am seeking the company back, where I was the CEO, but not a shareholder or director. She is a director.
Submitted: 1 year ago.
Category: Family Law
Expert:  Nicola-mod replied 1 year ago.
Hello,
I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.
I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!
Nicola
Expert:  Clare replied 1 year ago.
Hi
Thank you for your question.
My name is Clare
I will do my best to help you but I need some further information first.
What is the current value of the company and what is the value of the other matrimonial assets?
How did the Company come to be in the ownership of your wife?
Clare
Customer: replied 1 year ago.

Clare,

Thank you for coming back.

The value of the company, as established by the court expert, is about £700,000. Other assets are about £1,3 million. I consider it undervalued and offered a premium of £500,000 at the FDR. Still no settlement happened.

The other answer is slightly long!

When we split I had 48% shares, she 44.5%. She ousted me as CEO using her position as sole director. Then she tried to take my shares by filing a false ARO1, showing my shareholding as NIL. In solicitors' correspondence she justified her action with a string of lies. I filed a police case, she was arrested, and confessed to her wrong doing. I now felt sorry for her - being arrested was a big thing for her - and in the interest of making up, and considering she has a serious illness with poor prognosis, I "gifted" my shares to her. Since then she has 92.5% shares. It unfortunately didn't change her attitude, as I hoped, and she has continued to do everything to run me to the ground, financially and otherwise, while taking steps to ensure the company becomes unattractive for me as a target in Final Hearing.

Thanks

Expert:  Clare replied 1 year ago.
Hi
What makes up the rest of the assets?
What offer of settlement has she made?
Clare
Customer: replied 1 year ago.

A family home in London, another flat in London, two flats in India, and a company in India whose value now in NIL, since she stopped feeding it business from London (it was dependent on the London company) and which is with me.

She has not made any offer. I have made two offers, one in which I run the company and another in which she runs it. She rejected both without making a counter offer.

At the FDR the balancing payment in my favour was £700,000, if she kept the company. She only offered £250,000 which I rejected. She is hellbent on keeping the company as a prestige issue. I don't care either way, as I will start a new business, but I know I can run the family business better. Sales under her have declined big time - by over a million pounds - and her health is on the decline.

Thanks

Expert:  Clare replied 1 year ago.
Hi
Are there any children involved - and how long were you living together?
Clare
Customer: replied 1 year ago.

Both children are adults (27 and 24).

Our marriage was 30 years long.

Expert:  Clare replied 1 year ago.
Hi
What indication did the Judge make at the FDR?
Clare
Customer: replied 1 year ago.

Very little.

Solicitors of both sides, however, seem in agreement that it is a 50:50 division case.

Expert:  Clare replied 1 year ago.
Hi
Excellent.
If the court is convinced that your ex has deliberately dissipated assets then you will be compensated by way of receiving an extra share of the assets prior to the the distribution of the balance
I am not sure if you need any further information - if so then please ask.
Clare
Customer: replied 1 year ago.

Thank you. Since you have collected so much information, you may as well tell me if it is worth claiming the company, or do such things don't happen?

Expert:  Clare replied 1 year ago.
Hi
Since you are going to a Final Hearing it is one of the options available - but it seems counter productive to give your ex extra for a Company when you say that you can start again anyway.
Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 33814
Experience: I have been a solicitor in High Street Practise since 1985 and have specialised in Family Law for the last 10 years
Clare and other Family Law Specialists are ready to help you
Customer: replied 1 year ago.

Clare,

I am afraid I have a further follow up question. I am happy for it to be treated as a fresh question and be charged for it.

In issuing these fresh shares - at an undervalue - the main aim of my ex was to lower her shareholding to less than 50%, making it unattractive for me to claim her shares in the settlement.

If the judge recognises the undervaluation, and compensates me for the loss in the settlement, will she/he ignore the underlying motive and let the company remain with her, even though the dilution happened with a malafide intention? Can she/he not set aside these new shares' issues and allot me the company with a shareholding with which I can actually run it?

Thank you.

Expert:  Clare replied 1 year ago.
Hi
No the Court will not do this - the purpose is to distribute the finances fairly not to judge motives or dabble in company law
Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 33814
Experience: I have been a solicitor in High Street Practise since 1985 and have specialised in Family Law for the last 10 years
Clare and other Family Law Specialists are ready to help you

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