This is the situation. A couple are in the process of a property settlement. They own a company together, and run a business under that company. The divorce was granted in Feb, but as yet theres been no agreement in regards to property settlement. The husband began a new company in January of which he is the sole director, and would now like to purchase a business for that company, without his ex wife having any claim to it. He has been told if the new business is fully financed and doesn't make any more for the first 2 years, the ex wife has no claim to this.... is this true?
Buying a new business DURING a divorce and property settlement...
- Thread starter Philly2020
- Start date
Well she will be able to claim against the assets of the company, however those assets will be offset by the debts, so there probably wont be anything to claim for that reason.
It can actually be a significant benefit to take on new debts during a settlement negotiation to make the settlement more beneficial to you, because settlement law is very very stupid and allows the possibility of such things to occur.
It can actually be a significant benefit to take on new debts during a settlement negotiation to make the settlement more beneficial to you, because settlement law is very very stupid and allows the possibility of such things to occur.
Thank you for your help. If possible, can you elaborate how it could be beneficial for him to take on the new debt? Also, this woman is driven purely by spite, if she has any claim at all, even if it could become detrimental to her, she will take it.
Ok as i understand it, for God only knows whatever idiot reason, all financial goings on are taken into account 'after' separation up until the moment the settlement agreement is officially finalized.
One day before the court case, a spouse could take a personal loan and go and bet it on the horses and loose it and that debt will be taken into account for the financial settlement... you could potentially make the ex pay half that debt.... this is how stupid the system is. It may not actually work out that way, this is all 'potentially' how it could turn out based on what the stupid law allows,,, which a judge on the day may not allow.
One day before the court case, a spouse could take a personal loan and go and bet it on the horses and loose it and that debt will be taken into account for the financial settlement... you could potentially make the ex pay half that debt.... this is how stupid the system is. It may not actually work out that way, this is all 'potentially' how it could turn out based on what the stupid law allows,,, which a judge on the day may not allow.
In terms of buying a business, the advantage would be if your loan to buy the business was higher than the tangible assets of the business. The way that balanced out, the ex could potentially get a worse settlement than they would have gotten before you purchased the business.
The value of the tangible assets are definitely much lower than the loan to purchase it.
I understand. Unfortunately, it is much more convoluted than I can even begin to describe. There are solicitors involved, but to be honest, it seems parts of this case stumps them also. As i have mentioned, her drive to be vindictive outweighs her desire for financial gain. I do have several other questions, it is possible to pm you for advice directly?
These posts belong in family law forum, not commercial law.
And yes, the court can consider the new business when it is purchased using funds from the marriage pool. If the husband has wasted funds in doing so the court can consider the waste to be his alone, and not part of the marriage.
And yes, the court can consider the new business when it is purchased using funds from the marriage pool. If the husband has wasted funds in doing so the court can consider the waste to be his alone, and not part of the marriage.
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