How the courts tackle devious disposing of assets in divorce

The court cannot take the asset from the third party and put it back in the pot if the asset was received by them for valuable consideration, usually cold hard cash, and when they bought it in good faith without any knowledge of what the exiting spouse was up to.

This protects the honest buyers losing their asset when there was no conspiracy and they had no knowledge of what skulduggery was afoot. 

In practice, sizeable gifts to friends and family in the three years prior to the divorce petition raise far more eyebrows than purchases. The idea that being given a valuable house or shareholding by a family member just as their marriage hits the skids makes it very hard to believe that the receiver did not know something was off. 

The other common species of set aside application relates to shareholding mischief. Dilution of the shareholding or transferring the shareholding into a trust both being common methods of trying to artificially reduce the matrimonial funds available for distribution.

Shareholding skulduggery is most problematic when both parties are shareholders in the company.

Inexplicable dubious changes to the ownership of the company prior to a divorce can be especially problematic. The obvious consequences will be the apparent reduction in the parties’ assets, but it can also affect how easy it is to sell the remaining shareholding or take money out of the company.

It can be convenient for a spouse who was once a majority shareholder to dispose of some of their shareholding and then claim that it now makes it very difficult for them to sell or release capital from that asset due to their minority status.

However, judges are very alive to this ruse, especially when the shareholding has been transferred into a trust of which the disposer is the beneficiary or perhaps one of a small group of beneficiaries. 

Of course, shareholding skulduggery is most problematic when both parties are shareholders in the company as the actions of the sly spouse can damage the ability of the other to continue running the company.

Shareholding disputes

This appears to be at the heart of the Brangelina saga. Ever ethical Jolie decided that co-owning an alcohol brand while complaining of her ex-husband having issues with alcohol was no longer for her.

So, allegedly, behind Pitt's back and in apparent breach of an automatic temporary restraining order that was in force in relation to the business, Jolie sold her 50 per cent share to reclusive Russian billionaire Yuri Shefler.

This has caused no end of consternation for Pitt who has accused Jolie of inflicting gratuitous harm on him. No doubt this is a transaction that Pitt would do anything to reverse and perhaps he has good reason to be worried. 

Shefler’s ascent to billionaire status came off the back of another highly contentious purchase. He purchased Stolichnaya Vodka, which was recently rebranded to Stoli, from a state-owned Russian business in 1997 for $285,000 (£233,440), but the Russian courts ruled in 2001 that it was an unlawful purchase and he was banned from selling Stoli in Russia itself. He left for Latvia to move his production there and later moved to the UK.

Although the full story is not clear, it is hard to see how Shefler would be able to argue that he acted in good faith and without knowledge of Jolie’s intentions to get at Pitt.