Asset Protection until finalisation of distribution of assets – Stopping your partner selling assets

12/05/2015

Maria approached Watson & Watson solicitors following the breakdown of her marriage with Sam and becoming concerned that Sam was taking steps to dispose of the assets of the marriage.  

Sam and Maria had been married for over 20 years and had teenage children together. Sometime after separation Maria became concerned as friends were telling her that Sam was in a new relationship and was selling the assets Maria approached Dennis Grant of Watson & Watson.  Maria advised that when she met Sam he was a plumber and she was a retail assistant in a department store.  Sam had expanded his plumbing business and employed other plumbers and set up a company to operate that plumbing business.  That business was very successful.  Maria after the birth of her children stayed home and looked after the home and children and did not return to work. 

Sam ran the plumbing business.  Maria had become a director of some of Sam’s companies but did not really know how the business operated.  Maria signed documents as requested by Sam but did not know anything about the business. 

The plumbing business operated from a premises which Sam had told Maria, they owned.

When Sam left, Maria and the children were left in the house and Sam paid money into the bank account and nothing much changed, other than Sam had moved out.  Sam formed a new relationship.

Maria began to hear from friends and relatives that things were happening in the business and that Sam was taking action to sell assets so they would not be available to Maria.  Sam had always promised that he would be fair.  Maria knew that she was entitled to some assets but had no real understanding of her entitlement or how to proceed. 

Maria sought advice from Dennis Grant.  Dennis Grant made enquiries and ascertained that there were companies involved and the factory was owned by the company and further that Sam and Maria owned the family home.  There were some further enquiries which confirmed the suspicions of Maria that Sam was possibly taking steps to dispose of assets that would otherwise be part of the matrimonial pool of assets to be considered in the division of property between Sam and Maria.

Watson & Watson advised that the appropriate course was to make an application to the Family Court for an Order (injunction) preventing Sam from selling, transferring or mortgaging the assets of the relationship until final property settlement.  This was to protect the assets that would be available at the time of the final agreement or distribution of the assets in accordance with a Court Order. 

Before such action can be taken, the Court needs to be satisfied by proper evidence that there was a real risk that the transactions that were taking place, were likely to diminish the assets that would be available for the wife. 

Watson & Watson advised that the Court would possibly grant the injunction and put in place an order to maintain a holding position so the assets were not further encumbered or sold. 

After the injunction had been granted the assets were protected and thereafter negotiations for property division commenced.  Following further disclosure and ascertaining that some assets had been disposed of there were further negotiations and eventually the matter was resolved on the basis that those assets which had been disposed of were counted as an allocation of those assets to Sam. 

Watson & Watson was able to secure the assets then negotiations were entered into successfully and appropriate orders were made for the division of the assets.

If no injunction was sought or granted it may very well have been that the assets could have been sold, the value of the business reduced and the mortgage on the house be increased which would diminish the assets and make recoverability on behalf of Maria difficult.

Initially after separation all seemed to be well for Maria however her concerns were justified and the action by Watson & Watson to protect the assets were successful and assisted in achieving an appropriate outcome and transfer of assets to Maria in settlement.

If you have any concerns please contact us and speak with Richard Watson or Dennis Grant in relation to your concerns.

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