Selling the Family Business in a Divorce: Why It Almost Never Happens

This article is general information only and is not legal advice. If you're dealing with a business in your own divorce, get advice specific to your situation.

If your ex runs a business, you've probably wondered: can the court just make them sell it and give you your share? The short answer is almost never. Courts see a business as something that provides an income, sometimes for both of you in the long run, and forcing a sale can end up destroying the very thing everyone's relying on.

A case from September 2024, called LE v EL, shows what it actually takes for a court to go the other way and order a sale. It's a helpful example if a business is part of your own case, because it shows what judges look for and why business values are so hard to pin down.

Working out what a business is worth is genuinely difficult

Imagine two different valuers looking at the exact same business and coming up with figures millions of pounds apart. That sounds like someone must be wrong, but judges have said this happens all the time, and it doesn't mean either expert is being dishonest.

One well known case, called H v H, put it simply: valuing a private company is more of an art than a science. The point of getting a valuation isn't to land on one perfect number, it's to give the court enough information to check that whatever is being proposed is fair.

Another case, Versteegh, spelled out why this is so hard. Unlike a house, there's usually no actual buyer waiting in the wings for a small private company, so nobody really knows what someone would pay for it. Two valuers using the same method can still land on very different numbers. And a company's profits can jump around a lot from year to year, so picking the wrong year to look at can give a misleading picture.

There's an important extra point worth knowing: if a judge accepts a cautious, careful valuation, that doesn't mean the real value couldn't be higher. A conservative number is not the same as the lowest possible number.

Watch out for "hired gun" experts

In the LE v EL case, one spouse brought in his own accountant to challenge the court's independent expert. The judge found that this accountant had been secretly given an outside opinion by the husband before writing his report, and it clearly shaped his conclusions from the start.

There's a legal case about this too, Gallagher v Gallagher, which makes the point that even a professional, experienced expert can end up unconsciously leaning towards whoever brought them in. It's one of the reasons courts often prefer a single expert, jointly instructed and paid for by both sides, over "your accountant vs my accountant."

If you're facing a business valuation dispute, it's worth asking early on: is this expert genuinely independent, or has one side been feeding them information behind the scenes?

So when does a court actually order a sale?

Selling a business is treated as a last resort. Usually the court would rather let the person who runs it keep it, and give the other person their fair share through other assets, or through payments spread out over time.

But in LE v EL, the husband's plan to keep the business and pay his wife out in instalments simply didn't hold up. He owed nearly half a million pounds to his own solicitors, immediately. He needed to find hundreds of thousands more within the next year and a half. When the judge asked exactly how he'd raise that money, the answers kept changing and nothing was backed up with real evidence, no mortgage offer, no loan agreement, nothing solid.

The judge decided there was no realistic way he could actually pay what he was promising. Letting him try and fail would likely just mean a forced sale later anyway, after more fighting and more legal fees. So the judge ordered the company sold now, with the money split after certain debts and costs were paid.

There's an older case, N v N, that's often quoted for its blunt way of putting this: sometimes "the goose has to go to market." In other words, if fairness genuinely requires a sale, the court can order one, even though it's unusual.

The court also looked at whether keeping the husband's family home instead of selling it made more sense, using a case called Fisher-Aziz. But that case is really about protecting children living in the family home, and since there were no dependent children here, it didn't help him.

Finally, there was a practical worry about what happens if payments are spread out over years instead of a company being sold now. Two older cases, Masefield and Birch, confirm that someone who's been ordered to pay a lump sum can later go back to court and ask for more time to pay. The judge weighed this risk and decided that selling the company now, and letting the open market fix its true value, was safer and fairer than trusting a payment plan that might unravel.

What this means if you're in a similar situation

A few practical lessons come out of this case:

• Don't assume a business valuation figure is the final word. Judges themselves say these numbers are only ever a rough guide.
• If the other side brings in their own expert, ask questions about how independent that expert really is.
• A promise to "pay you out over time" is only worth as much as the evidence behind it. Vague reassurances aren't enough, and a court will want to see exactly where the money is coming from.
• Selling the business isn't the court's first choice, but it's not off the table either, especially if the alternative plan doesn't add up.

If a business is part of your case, understanding this now, before you're standing in front of a judge, puts you in a much stronger position.