UK Court Rules Nigeria-Born Oil Tycoon, Michael Prest To Give Ex-wife $27 Million
Thursday, June 13, 2013Omoba
The ex-wife of a Nigerian oil tycoon won a landmark
divorce settlement battle in the UK’s Supreme Court on Wednesday in a closely
watched case that had raised concerns about the accessibility of corporate
assets in wealthy divorces.
Family law practitioners and wealth managers were
watching to see how the court could issue a fair judgment without piercing the
legal “corporate veil” which treats companies and their shareholders as
separate entities.
In a decision that will affect anyone seeking to
protect personal assets by putting them into a corporate structure, Britain’s
most senior judges upheld a ruling which awards Yasmin Prest a share in seven
properties controlled by her husband’s company Petrodel Resources Ltd.
The court ruled the property, initially represented
as assets of the offshore company, was actually held in trust for her oil
trading ex-husband Michael Prest from whom she was seeking the balance of a
17.5 million pound ($27 million) divorce settlement.
“I’m delighted and relieved that the Supreme Court
has ruled as it did,” Britain’s Press Association reported Yasmin Prest as
saying after the judgment in the case Petrodel Resources.
“None of this would have been necessary if Michael
had been sensible and played fair.”
Sandra Davies, head of Family Law at top British
law firm Mishcon de Reya, told Reuters that although the court ruled the assets
be transferred to Yasmin Prest, it did not set a legal precedent on access to
corporate assets because the property was actually held in trust for Michael
Prest.
“There has to be a situation where the husband has
done something to evade, frustrate, put the company beyond his control with
deliberate intention,” she said. “There has to be some element of unfairness,
illegality about it.”
Despite the careful ruling, family law partner Sam
Longworth at Stewarts Law firm said Wednesday’s decision would have a
significant weakening effect on court powers when dealing with sophisticated
wealth structuring in a divorce setting.
“This will encourage wealthy spouses to consider
‘divorce planning’ before and during marriage, which risks further undermining
the institution of marriage,” he told Reuters in an email.
Solicitors for Yasmin Prest said that the court’s
ruling left legitimate companies with little to fear, while restoring an
element of fairness in the area of family law.
“This is a great result for Mrs Prest and for
others who might find themselves in a similar position,” said Farrer & Co
Partner Jeremy Posnansky.
“The Supreme Court’s decision will ensure that
dishonest husbands can’t cheat their wives and flout court orders by hiding
behind a web of deceit and a corporate façade.”
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