Wednesday, 4 April 2012

No Second Bites At The Cherry On Divorce

The New York Times has reported this week that New York's highest court has refused to allow a husband to make a second financial claim against his ex-wife because a large percentage  of the assets he kept as part of their divorce settlement dropped significantly in value, as they were invested in the Bernard Madoff Ponzi Scheme. The husband and wife agreed to divide their $13.5 million equally, when they divorced in 2006. The husband kept most of the $5.4 million invested in the Ponzi Scheme, which later became worthless. The court did not think it was appropriate to reopen the matter once a financial order had been made within the divorce proceedings.

The English courts have the same approach to this matter. Once a financial order has been made within divorce proceedings it is very diffiicult to convince a Judge to reopen the issue. The current recession has led to several cases where former spouses have tried to reopen their financial settlement because assets have suddenly dropped significantly in value. In 2009 the Court of Appeal rejected Mr Myerson's request to reopen his financial settlement on the basis that the majority of the assets he retained in the divorce settlement were shares in a company which fell in value from £2.99 to £0.27 per share.

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