When the Family Court considers forcing the sale of a successful business
One of the most difficult questions in financial remedy cases arises when most of the parties’ wealth is tied up in a successful company.
Courts are understandably cautious about ordering the sale of a thriving business. Such businesses may have taken decades to build and often generate substantial income for both spouses. Forcing a sale risks undermining the very asset that produces the wealth.
But sometimes the court faces a stark choice: should one spouse remain tied indefinitely to the other through a business they no longer trust, or should the court contemplate selling the goose that lays the golden eggs?
That dilemma lay at the heart of JV v MV [2025] EWFC 234.
A business built over decades
The parties married in the late 1980s and built a technology company together over nearly forty years. What began as a small venture operating from their home grew into a highly successful enterprise.
By the time the marriage ended:
- the parties held 70% of the shares,
- the company was valued at about £61 million, and
- their combined interest was worth roughly £42.8 million before tax.
Dividend income was substantial. Each party had recently received dividends of about £1.6 million, rising to almost £2 million the following year.
This was therefore not a case about financial needs. The central issue was how the capital value tied up in the business could fairly be realised.
The problem of exiting
Selling the shares might appear the obvious answer. In practice, it was not possible.
The company’s articles required any shares to be offered first to existing shareholders and effectively fixed the price at the pro-rata value of the whole company.
That made an external sale unrealistic. Any outside buyer would normally expect a minority discount, but the articles did not allow for one.
The wife therefore had no practical route to exit. The only realistic purchasers would be her husband or his business partner, neither of whom wished to buy.
At the same time, she had no voting rights, no board position and limited access to information. Remaining a shareholder would leave her financially tied to individuals she no longer trusted.
Tax uncertainty
The position was further complicated by a significant tax issue.
For many years the company had paid substantial sums to consultancy companies owned by family members. Those arrangements were later accepted not to satisfy the tax “wholly and exclusively” test.
Expert evidence suggested the worst-case exposure could be very large, although the likely outcome was considerably lower. The husband argued that this uncertainty made it impossible to fix a reliable present value for the business.
The proposed solution
The husband proposed a form of ‘Wells sharing’: equalising the parties’ shareholdings and allowing them to continue receiving dividends until some future “liquidity event”.
In theory that preserved the value of the business. In reality it meant the wife would remain indefinitely dependent on the husband and his business partner deciding if and when to sell.
The court regarded that as inherently unattractive. Financial remedy law emphasises the importance of achieving a clean break wherever possible.
A quasi-partnership
The judge also found that the company had the hallmarks of a quasi-partnership. It had grown from a close personal relationship, been run informally by a small group and involved extensive family participation.
For that reason, the court declined to apply a minority discount to the value of the shares.
The court’s solution
The judge adopted a pragmatic compromise.
The husband was given the opportunity to buy out the wife for £15.5 million, a slight departure from strict equality.
If the buy-out did not occur within the specified period, the parties’ shares would be placed on the market for sale, with the proceeds divided equally.
A careful balance
Cases involving successful businesses often require the court to strike a delicate balance. Judges are reluctant to disrupt profitable enterprises, but they are equally wary of leaving former spouses financially tied together indefinitely.
The approach taken here reflects that balance: preserve the business if possible through a buy-out, but ensure that if this cannot be achieved, the asset can ultimately be realised.
In short, the court may hesitate before selling the goose that lays the golden eggs — but it will not allow one party to keep the other tied to it forever.
