When the tycoon Brian Myerson agreed to pay his wife a £9.5m divorce settlement last spring he knew he could afford it. But that was before the recession hit so Mr Myerson has turned to the courts to ask them to reduce the payment because he says the credit crunch will leave him broke.
Yesterday he won sympathy from a judge in a case that, if Mr Myerson gets his way, would have "widespread implications" for credit crunch divorces across the country.
Mr Myerson, 50, told the Court of Appeal his investments had been so badly ravaged by the economic downturn that if he complied with the terms of his divorce settlement he would be left in the red.
Yesterday Lord Justice Thorpe, one of the most senior family judges in the country, described Mr Myerson's predicament as a "rum do" and agreed to hear his claim for what the tycoon described as a "fairer" settlement.
The case is expected to affect many other multimillion-pound divorces settled before the credit crunch.
Martin Pointer QC, representing Mr Myerson, said under the original settlement finalised in March last year, his client was ordered to pay 43 per cent of the total £25.8m assets of the marriage to his wife, Ingrid.
"The husband's case is that the unforeseeable and unforeseen combination of forces at play within the global economy has undermined the assumptions upon which the order was made," said Mr Pointer. The financial crisis had made the order "both unfair and impracticable," he said.
"The effect of what has been happening to the financial markets has been to drive down the value of the shares and capital holdings."
The wife's share of the total assets under the order would be 105 per cent and the husband's would be minus 5 per cent, Mr Pointer claimed.
"Arguably it could be worse than that," said the barrister.
Mr Myerson had agreed to pay his former wife, a sculptor who lives in her family's £5m home in Hampstead, £9.5m in installments over four years.
She also received a £1.5m property in South Africa, the Beach House.
The couple, who have two sons and a daughter, married in December 1982 and divorced soon after the March 2008 order to divide the assets. Mr Myerson is well known as an investor whose company, Principle Capital Investment Trust, has offices all over the world. He has gained a reputation for leading shareholders' revolts at the jewellery group Signet and the department store Liberty.
Nicholas Mostyn QC, for Mrs Myerson, told the panel of three judges that the settlement agreed between the couple was on the basis that the wife received a cash settlement while the husband assumed the risk over shares in his company. He said no events had altered the situation – Mr Myerson still had the shares and so no real loss "had crystallised".
"The events that occurred are certainly not unforeseeable. Within a matter of weeks of the settlement, events in the financial markets were looking extremely serious." He said that at any time during that period, the husband could have gone back to the courts to try to negotiate a new settlement.
"Mr Myerson is an extremely able entrepreneur. In the field in which he operates there will be casualties. It is too late now for him to unpick that deal."
Lord Justice Thorpe reserved the ruling, saying that if the judges allowed the appeal, the settlement would have to be renegotiated before a judge in the High Court.
Speaking after the hearing, Philip Way, representing Mr Myerson, said the case had "widespread implications" for credit crunch divorces across the country. It is however unlikely to affect big money divorces like that of the Formula One boss Bernie Ecclestone and his wife Slavica, who ended their marriage in the High Court yesterday. The division of Mr Ecclestone's £2.4bn fortune could make it the most expensive divorce in history but could hardly be said to be decided in the ignorance of the economic downturn.
The former Armani model has hired the top divorce lawyer Liz Vernon – who won the ex-Arsenal footballer Ray Parlour's wife a third of his future wages in a landmark ruling.
Judge Berry ruled that the marriage had "irretrievably" broken down because of Slavica's 78-year-old husband's "unreasonable behaviour".
The judge held that Mr Ecclestone "has behaved in such a way that the petitioner cannot reasonably be expected to live with" him.
It was earlier claimed that his workaholic life led to the split. In court papers she claimed her husband's behaviour "caused me stress and anxiety".
The couple married at Kensington and Chelsea Register Office in July 1985 and have two daughters Tamara, 24, and Petra, 19. They have a jet and a yacht named after their daughters.
Neither were present for the brief divorce hearing which came amongst a list of 25 undefended petitions.
Bonfire of the billionaires
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