Grapes of wrath: Brangelina and how divorce can leave a family business feeling flat

By Laura Guillon, Partner and Head of Hall Family Law, Leeds
It could be said that marriage is like a business.

After all, relationships – be they romantic or commercial – need to have solid foundations and relatively clear objectives.

One clear difference, of course, is that no entrepreneur should ever allow logic to be over-ridden by the same heady rush of novelty or hormones experienced by those who have fallen in love.

Even so, any successful couple or company needs to show a certain practicality – a willingness to work through whatever challenges or realities come their way.

Those who cannot cope with such realities, often find that there is simply no alternative but to wind up their partnerships.

In that sense, there are strong parallels between what happens in our households and places of work.

As much as people exchange marriage vows with the intention of remaining together for the rest of their lives, reality is somewhat different and it carries immense consequences for spouses who decide not just to set up home together but businesses too.

Wealth and fame are no insurance either.

The latest numbers issued by the Office for National Statistics (ONS), show that there were 113,505 divorces of opposite-sex and same-sex couples in 2021.

If we look a little deeper, we see that 41 per cent of marriages are over before couples make it to their silver wedding anniversary.

At the risk of adding an even bleaker statistic, roughly one-fifth of all spouses part before they’ve even passed the 10-year mark. That compares with 10 per cent of counterparts who married in 1965.

In short, data illustrates how divorce is very much a modern reality and begs the question of how many couples who incorporate a business after formalising their relationships take that into account.

Furthermore, how often do those who set up a family firm consider what will happen to that company should they join the roll call of divorcees?

It is an issue which is a regular part of my caseload and that of my colleagues, and has been given extra currency by a dispute between two of the film world’s best-known individuals, Brad Pitt and Angelina Jolie.

Seven years after she filed for divorce, a row over one of their notable joint assets – a wine-producing estate in Provence – rumbles on.

The couple had even married at Chateau Miraval in 2014, before it became hugely successful due to the reputation merited by the rosé which it produced.

However, as their marriage fell apart, so too did control of the winery. The sale by Ms Jolie of her half-share in the estate to Yuri Shefler, the Russian oligarch who owns the Stolichnaya vodka brand, has been vigorously contested by Mr Pitt.

He reportedly maintains that there was an agreement by which neither would sell their respective interests without the other’s consent.

Few households have the joint riches or renown of the couple who were jointly referred to as ‘BrAngelina’. Yet lessons can be drawn by others from their court battle.

According to official data, more than three-quarters of a million new companies were added to the register of companies in England and Wales during 2022.

On the other hand, there were nearly 600,000 dissolutions in the same period – up one-third on the previous year and the highest annual tally of corporate deaths on record.

It is a fact that challenging economic circumstances can prove difficult for spouses and businesses.

Things can be especially tough for entrepreneurial couples who manage no separation between things at home and work.

I have dealt with many instances of businessmen and women who cannot move forward and decide to end their marriages.

There naturally arises the dilemma of what to do with their joint commercial interests.

Some can manage to continue running their businesses without rancour but examples of that are few and far between.

It is more usual to arrive at a point whereby a company is either sold or one party buys the other out.

That is certainly advisable in the case of spouses who are so unable to agree on the division of joint marital assets that they end up asking a court to make a decision about the fairest and most practical solution.

The very idea of two principals in a business who don’t even want to be in the same room as each other being able to determine the best way forward for a firm is fanciful.

Such a situation is not just bad for them and the company but any other individuals within it. It creates a toxic environment and the possible taking of sides which does not augur well for future prospects.

As difficult as it might seem, spouses must seek independent advice, especially if their main joint asset is the business.

Divorce is the end of a marriage. That can sometimes be due to those involved being as hard-headed at home as they might be in negotiating commercial contracts.

Yet people with a true aptitude for business will appreciate that thinking of the long-term means divorce doesn’t have to sound the death knell for a viable enterprise too.

To that end, it is possible, popular and perhaps easier to safeguard companies by setting out the details of what should happen to corporate assets in a pre- or post-nup, long before domestic and commercial reality bites.