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Best time for business owners to divorce- 03/08/2011
For business owners and shareholders, there has rarely been a better time to get divorced, according to a leading Wolverhampton matrimonial solicitor.
Elizabeth Cleverley, partner and head of family law in FBC Manby Bowdler’s Wolverhampton office, says that the downturn and on-going slow growth in the economy has reduced the value of many small and medium sized businesses.
“Traditionally, separating couples tend to delay starting divorce proceedings when economic times are tough, as the cost of divorce can be high and the economically poorer party often wants to wait to ensure a more valuable settlement. However, if one of the spouses relies on an owner managed business for income, now is a good time to start proceedings,” says Mrs Cleverley.
According to Mrs Cleverley, correctly determining the true value of a business owned fully or partly by one party and assessing whether, or how, funds can be taken from it in settlement of financial claims can be a complex area even in the best of economic times.
She says: “Expert evidence is vital to determine the true value of any business, but for most it will be true that the value has declined in the past few years. Many businesses are already under severe pressure from suppliers and banks, and those with public sector contracts look to lose out more in the coming 12 months.
“In many cases cash flow pressures can lead to owners/directors leaving money in the business or even paying capital into the business to keep it afloat, so while it may appear that there is money and value in the business, this is not the case. With many companies just breaking even, the business may have little or no actual value without the continued daily hard work of the owner.”
According to Mrs Cleverley, this situation makes it the perfect time for a business owner not to delay a divorce.
“So as long as the business has a future, then it makes complete sense for the owner to seek a divorce when its value is at its lowest. However, for legal professionals such a case is likely to require time consuming and expert work, so there needs to be a realistic appreciation of the likely costs before commencing proceedings,” concludes Mrs Cleverley.
Elizabeth Cleverley and her senior colleagues are specialists in divorces involving owner managed businesses and high value estates. She can be contacted on tel. 01902 578000 or via www.fbcmb.co.uk
With 33 partners, FBC Manby Bowdler is one of the largest law firms in the West Midlands. In addition to Wolverhampton, the firm also has offices in Willenhall, Telford, Shrewsbury and Bridgnorth.