Coronavirus and divorcing business owners

Published on
2 min read

Family lawyers are readying themselves for queries from business owners about the impact of the Covid-19 economic downturn on their own financial divorce settlements as outcomes that at the time of settlement seemed fair enough now look soon to be weighed against the business owner; or as maintenance payments now look unaffordable moving forwards.

Only in a very narrowly drawn set of circumstances can financial orders be rewritten.  The “Barder test” enables orders to be set aside if there are new events, within a relatively short time of the order being made, which invalidate the basis or fundamental assumption upon which the order was made.  Experience to date suggests that price fluctuations in the housing market, shares or business values, including those experienced following the 2008 economic crisis, will not be viewed as unforeseen or unforeseeable – however dramatic.  Phrases such “risk laden business assets” ring true for many family lawyers because of this but the result is indeed a perceived injustice for many at times such as those we now find ourselves in. 

Less controversially, if you are a business owner already paying a figure in maintenance to your ex that simply is not going to be affordable in the short to medium term due to a material change in circumstances (such as Covid-19 related reduction in income) then the likelihood is that you will be able to vary downwards the sum that you pay. 

Whatever your interest in the business, when it comes to separation and divorce, specialist advice from family lawyers who understand businesses is a must in the current climate. 

 

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