In our last post we discussed a divorce case that is getting a lot of media attention. The founder of an oil company is in the process of divorcing his wife of 25 years. Among other things, on the line is almost $3.5 billion, which is about half of the increase in value of the company’s stock during a five-year period preceding the divorce.
The wife claims her soon-to-be-ex’s “time, effort, skills or funds were critical to the enhancement of value” in terms of the company. If she can prove this, she may be entitled to half of the increase in value of the shares.
In order for the businessman to fight this claim, he will also have something to prove during the divorce. Specifically, he would need to prove that the value of the company shares increased due to circumstances beyond his control, such as high oil prices. If he can prove that, then the increase in the share value may not be divisible.
In the end, even if the businessman had to divide the value of his shares, he would still have about 34 percent ownership in the company, with a total value of about $7.6 billion.
This is definitely a good example for Florida residents of the importance of having strong and experienced legal representation when it comes to a high-asset divorce. The combination of a very long marriage and a highly successful business can definitely lead to a wide range of complexities throughout the divorce process.
Source: The Wall Street Journal, “Divorce May Weaken Oilman’s Stake in Drilling Powerhouse,” Tom Fowler, March 21, 2014