Piercing the Corporate Veil during Divorce Proceedings

by Cyrus Medora on September 7, 2013

Cyrus Medora

Normally the Courts adhere to a basic principle of English company law: that a company is separate from its owners, and has an existence on its own. But, says Cyrus Medora, a solicitor specialising in Family Law at Kidd Rapinet’s Slough office: “The new Supreme Court has just blown that wide open in divorce proceedings. This could generate a lot of controversy.”

In the case of Prest v Petrodel Resources and Others, the judges decided that the husband had, at all relevant times, been the beneficial owner of seven residential properties in the UK, held via two companies, and that they were being held on resultant trust for him. Because of that ruling the wife could have a proportion of the properties conveyed to her on divorce. Although the judges took care to explain that they were not applying the company law doctrine of “piercing the corporate veil”, the effect was the same by their application of property law principles in a divorce case.

Cyrus Medora comments: “The implications of this decision could be pretty major. Parties need to consider their options in terms of protecting their assets.”

If you feel you may need advice, Kidd Rapinet can advise you on the latest law in this field. Call the contact for your local office for further information:

  • Aylesbury: Mark Studdart (01296 432541)
  • Farnham: Sandra Meakins (01252 713242)
  • High Wycombe: Katie Banks (01494 535321)
  • London: Richard Tymkiw (020 7024 8065)
  • Maidenhead: Kathryn Coyle (01628 621301)
  • Slough: Cyrus Medora (01753 532541)