Matrimonial Dispute

Compilation of Questionnaire for Wife

Rakesh Kapila was instructed by solicitors representing a wife in relation to her husband’s financial interest in a large leisure company. He had indicated in his Form E that his interest in the company was worth about £0.5 million. Rakesh carried out a review of detailed subscription and sale agreements. Following his review, a questionnaire submitted to the husband’s solicitors resulted in responses indicating that his interest in the company amounted to £4 million instead of £0.5 million. This was an important aspect underlying a “clean break” settlement between the parties for an amount exceeding £2.5 million for the wife.

Valuations of Various Companies as Single Joint Expert

George Sim was instructed as a Single Joint Expert by solicitors representing the husband and wife to value a number of companies in which the husband had interests.  Based on a review of the businesses’ accounting records and the working papers of their external accountants, his report concluded that the husband’s interests amounted to over £2 million and detailed a number of alternative solutions in releasing funds from the businesses.  A separate report was prepared on the CGT consequences of the husband disposing of his shares in the companies. Following George’s oral evidence at a hearing, the financial settlement was based on accepting the primary conclusions in his report.

Identifying Financial Resources and Valuation

Sim Kapila were instructed by solicitors representing a wife who sought funds from her husband to acquire a property consistent with her needs.  The husband had built up a very successful chain of stores retailing pet foods. Following a critical appraisal of the financial affairs of the husband and of his business, we concluded that the husband would be able to make available up to £500,000 to the wife through additional borrowings by the business and through the realisation of assets owned by him and by the business. It was also concluded that the business could prospectively be valued at an amount exceeding £1 million. On the basis of Sim Kapila’s report, settlement between the parties resulted in a lump sum payment of £450,000 to the wife which enabled her to acquire a residential property.

Advice on Valuation and Proposals for a Financial Settlement

Rakesh Kapila was instructed by a specialist firm of family lawyers on behalf of a wife to consider the husband’s Form E with particular regard to his valuation of £50,000 in respect of a 5% shareholding in a large private engineering company which was likely to be sold within a few years. An advisory letter from Rakesh suggested that the husband’s interest could exceed £1 million, based upon which the parties agreed to instruct a Single Joint Expert to value the husband’s shareholding. In addition to assisting the solicitors with points to be incorporated in the letter of instruction to the Single Joint Expert, Rakesh’s advice resulted in the settlement proposals incorporating 40% of the proceeds arising on a sale of the husband’s interest within four years.

Proposals for a Financial Settlement

Sim Kapila were instructed by solicitors representing a wife in relation to the make-up of the husband’s assets between those he held at the date of their marriage and those acquired thereafter. A report prepared on behalf of the husband contended that his total assets of £16 million included £9 million in respect of his pre-marital assets.  Based on our independent research, we were able to suggest that the husband’s pre-marital assets should be valued at £4.5 million, a large proportion of the difference between our figure and the husband’s amount being related to share options valued by the husband at £3.5 million but which we contended became valuable after the marriage. Our work was instrumental in a consideration of the post-marital assets taken into account by the parties in reaching a final settlement.

Investigating Sustainable Income

A divorced husband stopped maintenance payments to his ex-wife together with mortgage repayments payable in relation to a house purchased on her behalf, alleging that the profitability of his stage-lighting companies was poor.  Sim Kapila were instructed by solicitors representing her and discovered that one of his companies owned valuable freehold property and made annual payments to his pension plan which were broadly equivalent to his disclosed salary. We also identified that there was a significant directors’ loan account from which the former husband had drawn down funds in the past.  On this basis, a proportion of the maintenance payments and mortgage repayments was resumed following a court hearing.

Establishing Borrowing Capacity of Business

A divorced husband employed as a solicitor sought over £0.5 million from his former wife, who owned and managed a residential home for the elderly. Sim Kapila were instructed on behalf of the wife to establish the home’s ongoing profits and liquid resources. As a result of a critical appraisal of the business, the prospects of the residential homes sector and of banks’ lending practices, we prepared a report highlighting that the business would be unable to support additional borrowings and that the wife would not be able to pay her former husband the amount sought by him.  Settlement was reached on the basis of a one-off payment of £175,000 to the husband.

Investigating the Financial Affairs of a Business

Rakesh Kapila was instructed on behalf of a wife to consider the husband’s contentions that since the profits of his business had declined over two years, his income from the business had decreased by 50% and his 50% shareholding in the business had little value.  Based on a critical analysis of the company’s VAT returns and sales invoices, Rakesh was able to highlight that invoices had been attributed to the wrong accounting periods and that there had only been a modest decline in the performance of the business. Based on the husband’s acceptance that the business would continue and had an ongoing value, the court ordered the sale of the matrimonial home at an amount exceeding £600,000 with 66% of the net proceeds being payable to the wife.