In a divorce case involving a couple with assets of more than £260 million, the Family Court has ruled that the husband should buy out the wife’s shares in three private companies.
The couple had started their life together with few assets. They had married in 1998 and the husband had co-founded a technology company with a schoolfriend the following year. In 2016, non-core elements of the company were spun out into other companies.
The couple separated in 2023. Ruling on the financial remedy proceedings, the Court noted that it was a sharing case and it was common ground that both parties’ needs would be more than provided for. At a previous hearing, the Court had ordered a report on the couple’s business assets to be prepared by a single joint expert (SJE). The wife contended that the valuations reached by the SJE were too low and made various allegations of bad faith against the husband, which the Court rejected.
The Court acknowledged that valuations of private businesses were uncertain, but rejected the wife’s challenge to the SJE’s methodology and conclusions. Evidence from professional advisers engaged by the wife indicating that the valuations were higher than those calculated by the SJE could not be admitted or relied upon in the absence of permission from the Court. The Court proposed to adopt the SJE’s figures, subject to one small adjustment and incorporating a 3 per cent reduction for notional costs of sale. The value of the business assets was calculated at just over £218 million.
The Court considered that a buyout by the husband of the wife’s shares in the three companies would be preferable to a Wells sharing arrangement (named after the case of Wells v Wells), whereby the wife would receive a share of the proceeds of any eventual sale. A buyout would achieve a clean break and avoid the need for ongoing commercial ties between the husband and the wife. In the Court’s judgment, there was a significant risk of ongoing conflict between them which would make a Wells arrangement all but unworkable. The Court also noted that the businesses had been founded by the husband over 25 years ago: they had been his life’s work and he continued to play a pivotal role in them.
Taking into account the fact that a buyout would leave the husband with riskier and more illiquid assets, the Court ruled that the husband should receive 55 per cent of the overall assets and the wife 45 per cent.