Divorce Is a High Stakes Matter for Businesses, Too

ALBANY, NY, September 10, 2012 (Press-News.org) Any divorce can involve high stakes for the spouses involved. From deciding who gets the house to determining where the children will live, divorce cuts into the most important areas of people's lives.
For wealthy couples in New York and elsewhere, the difficulties of divorce can extend well beyond disputes over a house, child custody and spousal maintenance. A high asset divorce can shake up an entire business, as wealthy couples have found.

Casinos, Sports Teams and Other Businesses Affected

When Las Vegas casino mogul Stephen Wynn and college sweetheart Elaine announced their divorce, high-profile divorce attorneys and others said the legal proceedings had the potential to change the Las Vegas casino scene. Billionaire Stephen Wynn owned a 21 percent stake in Wynn Resorts -- and listed Elaine as a beneficiary, according to Forbes. Given Elaine's share of the resort, the couple eventually settled the divorce for $740 million without having to sell any of the business property.

After a high-profile, hotly contested divorce, Los Angeles Dodgers owner Frank McCourt ended up selling the baseball team that he and former spouse, Jamie, battled over. An investment group (that includes basketball great Magic Johnson) paid $2 billion for the baseball team. Jamie McCourt's $131 million divorce settlement came from the proceeds.

When announcing their divorce recently, Philadelphia Eagles owners Jeffrey and Christina Lurie pledged that the end of their 20-year marriage would not affect the business and operations of the NFL team. But as Wynn, McCourt, and countless other high-profile divorces involving billionaires show, a high asset divorce has the potential for complex legal problems. It remains to be seen how the football team will fair during the divorce proceedings.

High Asset Divorce Is Complex Even When Private

Even when high-profile couples keep the end of their marriage out of the spotlight, high asset divorce proceedings are complex. Divorce generally involves an equitable distribution of marital property, meaning the property acquired during the marriage must be fairly divided between the couple. Determining what property is subject to division and how it should be divided can be difficult even for spouses of average wealth. This problem is compounded as the value, complexity and number of assets increase.

Businesses have the potential for unique challenges in a high asset divorce, in part because accurate business valuations can be challenging. For example, a business may have been owned by one spouse before marriage, but the businesses' finances may have become commingled after the couple married. Other business partners may be involved. Additionally, the non-titled spouse's contributions to the household and the business that enable the titled spouse (business owner) to flourish may also be considered and assigned a value.

To properly determine what portion of a business or other significant asset is marital property and how to fairly divide it, a high asset divorce may involve a team of experts to assess investments and private equity, private investigators, forensics experts, and business valuation accountants, to name a few.

While billionaires provide the highest profile examples of the complexity of high asset divorces, nearly all high asset divorces have the potential for unique legal challenges in all states, include New York.

Colwell, Colwell & Petroccione, LLP
New York Family Law Firm
20 Corporate Woods Boulevard
Albany, NY 12210
Phone: 518-462-4242
Toll Free: 866-377-0285
Fax: 518-462-4031

Website: http://www.colwell-law.com