Divorce war focuses on £60 million family business

News  |   7 January 2016

Divorce can entail the break-up of family businesses as well as personal separation.

Divorce can entail the break-up of family businesses as well as personal separation. In one case, the High Court has endeavoured to find a practical solution to a former couple’s acrimonious battle for control of their £60 million property empire.

During the couple’s long marriage, the husband had been the driving force behind a thriving group of companies. However, the wife had played a full role as wife and mother and was a director and shareholder of two of those companies. The couple’s youngest son, who enjoyed a prominent role in the business prior to their separation and had been viewed as a successor to his father, was also heavily embroiled in the dispute, taking his mother’s side.

The husband sought continuation of a freezing injunction which placed restrictions on his wife's and son’s exercise of their powers as directors. He argued that they had conspired against him to seize control of the business and to defeat his financial claims in the divorce proceedings. They were alleged to have attempted to spirit away £12 million of the business's funds.

The wife and son argued that the injunction had prevented them from performing any of their duties as directors and was designed to remove them from any degree of control over the business or knowledge of the way in which it was being run. Steps that they had taken to protect their position were solely reactive and defensive, in response to actions taken by the husband.

The Court noted that the case had descended into a deeply entrenched internecine war, with the husband on one side and his wife and son on the other. It was thus necessary to find a practical means of holding the ring pending the outcome of the divorce proceedings. In refusing to extend the injunction, the Court instead accepted binding undertakings from the wife and son concerning their remuneration from the business and the exercise of their directorship powers.