Family lawyers achieve High Court financial settlement for bankrupt husband

Nathaniel Groarke

Expert family lawyers at national law firm Irwin Mitchell have had success in the High Court with a financial settlement for a bankrupt husband.

Partner Nathaniel Groarke and solicitor Emma Bates in the firm’s Manchester family law team managed the husband’s case, who was unfortunately declared bankrupt during the proceedings.

The case involved the interaction between divorce proceedings and insolvency law; the validity of a pre-nup made five days before the wedding; allegations by the wife that the husband had hidden assets; failure by the wife to disclose assets and other complex international issues.

The family law team worked together with the firm’s restructuring and insolvency team to provide advice to the client about the impact of his bankruptcy on the family proceedings.

The judge decided, based on the husband’s needs, the wife should pay off the significant debt the husband had accrued as it was determined he’d received no financial support from her during the marriage, causing the debt to accrue.

He would also receive a property on trust to live in mortgage-free, to revert back to the wife once he died, as well as 60% of the wife’s pension.

The husband was 69 and the wife was 56.

This was a second marriage for both parties and both had children from other relationships.

The wife was significantly wealthier than the husband, and was found to have assets worth £3m and a net income of more than £100,000 per annum.

Five days before the wedding in 2010, a pre-nuptial agreement was signed abroad with neither party taking legal advice before signing.

It was always the intention of both parties that their married life would be conducted in the UK, where the wife had a successful business and her children were being educated.

The wife employed the husband part-time in her business, but his main responsibility was taking care of the wife’s twin daughters.

The wife issued a divorce petition in September 2016, after six-and-a-half years of marriage, and the decree absolute was granted in July 2019.

The financial remedy proceedings were first started in 2017, where the wife sought a full range of financial relief relying on the pre-nuptial agreement.

The proceedings spanned some three years, finally culminating at trial in January 2020.

The wife has been ordered to pay the sum of £675,000 to pay off the husband’s debts and purchase him a property. He will also receive a share in her pension.

Nathaniel Groarke, the family law partner representing the husband, said: “We are delighted that our client has been given a fair outcome from the divorce, where he otherwise would have been left in serious financial trouble.

“The case was highly acrimonious on both sides and was hugely complex because of the non-disclosure allegations that were made, as well as the international aspects of the case.

“We’re pleased the judge recognised our client’s financial needs should be met to give him a comfortable retirement given the wife’s significantly greater wealth.”

He added: “It is, of course, never a happy situation when relations become so difficult between two parties.

“There are many lessons to be learned from these proceedings, namely that proper legal advice is always recommended when it comes to documents like pre-nups, and that if one of the parties is bankrupt then they will still be able to get financial support in a divorce if needed.”