Divorce can pose a serious threat to the well-being of a
business unless an Order for a Clean Break has been obtained, a
leading family lawyer has warned.
Julia Bond, head of the Family Law Team at the Telford Office of
MFG Solicitors, says that in the absence of a Clean Break, an
ex-husband or wife might seek to increase their income as the
business prospers.
"This might result in an application to vary any orders for
income and deferred payments of capital made on the dissolution of
the marriage," she said.
"A Clean Break ensures that neither party to a marriage can
bring any further applications for financial provision against each
other. "
Referring to the current recession she said: "While business
values are low the opportunity to settle matrimonial proceedings
might be advantageous particularly before the marketplace
improves.
"Clearly, this might have a profound impact on a recovering
business in future years to come."
Ms Bond said that the Court of Appeal had recently made an Order
in favour of a wife who applied to increase her maintenance
payments.
In the case of Hvorostovsky v Hvorostovsky the ex-wife had been
married to a successful opera singer and an order for income had
been made in her favour following a divorce in February 2001.
The husband had subsequently remarried and had two more
children.
In the intervening years the husband's income grew substantially
and the first wife then applied to vary the income payments upwards
in her favour.
The Court of Appeal decided that the wife was entitled to an
increase in her income payments and held that the single factor of
greatest significance was the greatly increased income of the
husband.
"In times when financial recovery is hoped for and business
owners plan to increase their profits this judgment provides a
timely warning," said Julia Bond.
"Family practitioners at MFG Solicitors are now advising clients
that any income Orders ought to be capitalised as soon as there is
the financial wherewithal to do so.
"A Clean Break can prevent any applications being subsequently
made to substantially increase the income received by one
party."