LONDON – Britain’s top court on Wednesday handed an oil tycoon a costly setback in a divorce case, ruling he must give his ex-wife assets held by companies he owns.
In a case with significant implications for wealthy divorcing couples, the Supreme Court ruled that Nigeria-born Michael Prest should surrender seven properties to his English former wife, Yasmin.
Alison Hawes, a specialist family lawyer at law firm Irwin Mitchell, said the ruling meant “that business people cannot deliberately ‘hide’ their assets in businesses and corporate structures to protect them in future in the event of a divorce.”
The couple, now in their 50s, married in 1993 and lived in Britain before divorcing in 2011. Michael Prest was ordered to transfer the properties as partial payment of a 17.5 million pound (about $27 million) settlement.
He challenged that decision, and last year the Court of Appeal ruled that the companies constituted a separate legal entity and couldn’t be included in the divorce.
But seven Supreme Court justices ruled the properties were assets to which Michael Prest was “entitled” and should be included in a divorce settlement.
The court insisted it wasn’t establishing a general principle allowing courts to “pierce the corporate veil” and seize assets in divorce cases. But legal experts said the judgment was still significant.
“The Supreme Court has handed down a landmark decision in which, for the first time since at least the end of the 19th century, it has accepted a general exception to the rule against ‘piercing the corporate veil,'” said Michael Hutchinson, a partner at law firm Mayer Brown.
“This is an extraordinary decision and the implications for corporate governance are potentially huge.”
Yasmin Prest said the judgment was “more a case of satisfaction and relief than celebration. None of this would have been necessary if Michael had been sensible and played fair.”
Michael Prest wasn’t in court Wednesday.