The High Court in London has just ruled in a matrimonial financial remedies case * how the twin horrors of the pandemic and Brexit should be reflected in the value of a company which figured highly in the assets to be divided up between husband and wife.
In focus was a company providing ducting to a wide range of customers in construction and other industries. A significant proportion of trading business was in the EU and, if there was 'no deal', the free trade tariff on which the company operated would end. The company had already experienced a significant decrease in demand.
It was agreed that the court should take into account both the pandemic and Brexit in deciding what the company was worth. By how much should the value be discounted? The wife argued for a discount of 10% not only to the trading value of the company but to the company's surplus assets of cash and quoted investments. The judge ruled that it was right to knock off 10% but only on the trading value. There was no logic in applying any discount to the pile of cash and investments, he said. There was no evidence that they had suffered a decrease in value.
* OG vAG [2020] EWFC 52
