Husband’s companies count as assets.

            Posted on Jan 31, 2016  

            Husband’s companies count as assets.

Q During my marriage, my husband provided a high, in fact, extravagant level of living for us and our four children. We have homes in Boston and London. Our children attend top private schools from pre-K to graduation and on to college. Our standard of living resulted from his investing in real estate in London in areas that now have become very fashionable. As the rents went up, so too did the value of the buildings.
My husband put title to all of these buildings into several of what is called in the UK offshore companies. He had complete control and full management of these companies.
Now that he filed a divorce in London, he claims to be broke. He has refused to produce documents in violation of High Court orders. Can I file for divorce in Massachusetts and force him to cough up documents?
DME, Boston and London
A Seemingly you were served with divorce papers in the United Kingdom. So that court will continue to have control over your divorce case.
You need a top family law lawyer in London. Go to the International Academy of Matrimonial Lawyers at IAML.org and look for English members of the Board of Governors of the main organization and that of the European Chapter.
That lawyer will tell you about the case of Prest v. Petrodel Resources. The husband in that case played that same game your husband is now playing. That guy lost. So, too, will your husband. But nothing will be easy.
While I am over-simplifying, essentially the UK Supreme Court said the trial judge properly could and did conclude the assets in the corporations were held in a constructive trust for the benefit of the husband. So the corporations could be directly ordered to transfer assets to the wife.
Beyond claiming a resulting trust, I believe your English lawyer will also seek to pierce the corporate vail. That will only happen if there is no other way to provide you with about half the value of all marital assets. So, if the total assets are $50 million; and there is $25 million in non-corporate assets, the judge will order you get all of the latter. And your husband ends up with the assets in the corporation.
Another possible claim is what the Brits call the “evasion principle.” That can be claimed if within a few years before he filed his divorce, he put the property into the corporations. If this applies to you, then there is no need to pierce the corporate veil.
Of course, there will be many hurdles, and this will take a few years to sort out. But if you hire a great jumping horse of a lawyer, he or she should be well able to let you ride to victory. Tally Ho.