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Divorce tycoon must pay wife everything (plus 5%)
Paul Cheston, Courts Correspondent01.04.09
A RULING by a senior judge today sent a warning to millionaires hoping to renegotiate their divorce settlement as a result of the credit crunch.
Lord Justice Thorpe spoke out as he rejected an attempt by a City businessman to win back part of his £9.5million divorce settlement from his ex-wife.
Brian Myerson, 50, said the economic downturn had severely reduced his wealth. The original settlement would leave him £500,000 out of pocket instead of receiving £14.6million from the couple's assets.
But Lord Justice Thorpe, sitting with Lady Justice Smith and Lord Justice Sullivan in the Court of Appeal, threw out the fund manager's claim.
Lawyers viewed the case as having major implications for future divorces where wealth has been lost in the financial crash.
The judge said: "There may be many contemplating an attempt to reopen an existing order on the grounds of subsequent financial eclipse.
"They would be well advised to heed the warning that very few successful applications have been reported. The natural processes of price fluctuation - whether in houses, shares or any other property, and however dramatic - do not satisfy the [legal] test."
During the hearing Mr Myerson, a fund manager operating through Principle Capital Holdings, said that under the divorce settlement from his wife Ingrid in March last year he was to pay 43 per cent of their then total £25.8million assets to her.
But an "unforeseeable and unforeseen combination of forces at play within the global economy" had undermined the order. She now stood to take 105 per cent of the assets while he was left with minus five per cent, the court heard.
Mrs Myerson's lawyers insisted the settlement had been agreed on the basis that she would get a cash sum and he would assume the risk over the shares in his company.
Mrs Myerson is a sculptor who lives in Hampstead. Under the divorce settlement she was to receive £9.5million in instalments over four years. She also received a £1.5million property known as the Beach House in South Africa.
The couple, who married in December 1982, have two sons and a daughter.
A spokesman for Mr Myerson said: "Mr Myerson is disappointed that the court failed to recognise that the economic downturn had rendered his divorce settlement unfair. "The aim of Mr Myerson's application has been to ensure that the division of assets with his ex-wife was equitable. He will now take his appeal to the House of Lords.
"A consequence of this appeal is that in July the High Court will have a free-standing application to cancel further payments to his ex-wife under the terms of the existing settlement.
"At no point have the proceedings affected PCH or its associate companies and it remains business as usual."
The ruling means that once-wealthy City divorcees have no chance of winning more money from their settlements unless their losses are substantial and permanent, according to Jeffrey Nedas, a matrimonial forensic accountant who acted for Mrs Myerson.
"Mr Myerson's position is distinctive because, while his shares have decreased in value by some 90 per cent, he still holds around 30 per cent of PCH. The value of his assets may return.
"He is very different to, say, someone where the value of shares in Lehman Brothers or another failed institution were a material asset at the time of the divorce settlement. Secondly, the terms of the settlement were agreed by the parties - not imposed by the court."
He added: "This ruling highlights that assets can go dramatically down in value as well as up."
Reader views (7)
The UK and the SE in particular must be the most unfriendly place in the world for husbands. My wife who contributed no money to our pot, decide to "achieve a divorce" now lives mortgage free with an income for life from me, whilst I am now unemployed and have been told (at a subsequent hearing regarding maintenance payments) to keep paying out of equity until I am broke.
The law just encourages wives to cash in, it must be one of the biggest destroyers of the fabric of our society.
- Colin, UK
UK divorce laws are really just a gravy train for the lawyers who have created a bizarre gold diggers charter to fleece men at every turn. The UK fathers rights are possibly the worst in the civilized world. The fact is a woman can have an affair, walk out and grab 50% .. and get the husband to pay her legal fees! If you are rich be very, very careful about getting married in the UK, be even more careful to ring fence your assets in the unfortunate event you get divorced!
- James Ritchie, Oyster Bay Cove, NY
Good job I'm poor, if I were rich I'd never marry.
- Gary, London
- George, London
"It would bend the point of a clean-break if she were to come back in a few years claiming that she had frittered away her share of the assets and thus wanted more."
But this has already happened! Women are treated like minorities and as such will receive "fairer" treatment than men. Labours perverse "equality" Laws drawn up by bitter women.
- Frank, Home Counties, England.
There's actually a point where what you deserve turns into flat out greed. No matter what the circumstances of the divorce were, no one should have to pay out more than 100% of their actual assets. The courts should see that this is ridiculous. It's not as if (no matter how underserving on sympathy might be) he masterminded it to work out this way. Unless the woman was mentally or physically tortured, this is just greed now. £3 million + not good enough?
- 888, London
Excellent news!
- Marianne, SW France
Thank goodness for this. The buy took a chance that his employment and company was a valuable asset, but was proved wrong.
When I got divorced, although I came into a marriage with assets where my ex-wife had debts, she still walked out with half of my assets despite there being no children.
It would bend the point of a clean-break if she were to come back in a few years claiming that she had frittered away her share of the assets and thus wanted more.
In this case, they reached an agreement, and should take their chances with what is left. If this man is a businessman, he should understand the concept of risk management, and if he failed to realise that all of his financial eggs were in the same basket, then he ain't much of a businessman.
- George, London
