Divorce tycoon must pay wife everything (plus 5%)

A RULING by a senior judge today sent a warning to millionaires hoping to renegotiate their divorce settlement as a result of the credit crunch.

Lord Justice Thorpe spoke out as he rejected an attempt by a City businessman to win back part of his £9.5million divorce settlement from his ex-wife.

Brian Myerson, 50, said the economic downturn had severely reduced his wealth. The original settlement would leave him £500,000 out of pocket instead of receiving £14.6million from the couple's assets.

But Lord Justice Thorpe, sitting with Lady Justice Smith and Lord Justice Sullivan in the Court of Appeal, threw out the fund manager's claim.

Lawyers viewed the case as having major implications for future divorces where wealth has been lost in the financial crash.

The judge said: "There may be many contemplating an attempt to reopen an existing order on the grounds of subsequent financial eclipse.

"They would be well advised to heed the warning that very few successful applications have been reported. The natural processes of price fluctuation - whether in houses, shares or any other property, and however dramatic - do not satisfy the [legal] test."

During the hearing Mr Myerson, a fund manager operating through Principle Capital Holdings, said that under the divorce settlement from his wife Ingrid in March last year he was to pay 43 per cent of their then total £25.8million assets to her.

But an "unforeseeable and unforeseen combination of forces at play within the global economy" had undermined the order. She now stood to take 105 per cent of the assets while he was left with minus five per cent, the court heard.

Mrs Myerson's lawyers insisted the settlement had been agreed on the basis that she would get a cash sum and he would assume the risk over the shares in his company.

Mrs Myerson is a sculptor who lives in Hampstead. Under the divorce settlement she was to receive £9.5million in instalments over four years. She also received a £1.5million property known as the Beach House in South Africa.

The couple, who married in December 1982, have two sons and a daughter.

A spokesman for Mr Myerson said: "Mr Myerson is disappointed that the court failed to recognise that the economic downturn had rendered his divorce settlement unfair. "The aim of Mr Myerson's application has been to ensure that the division of assets with his ex-wife was equitable. He will now take his appeal to the House of Lords.

"A consequence of this appeal is that in July the High Court will have a free-standing application to cancel further payments to his ex-wife under the terms of the existing settlement.

"At no point have the proceedings affected PCH or its associate companies and it remains business as usual."

The ruling means that once-wealthy City divorcees have no chance of winning more money from their settlements unless their losses are substantial and permanent, according to Jeffrey Nedas, a matrimonial forensic accountant who acted for Mrs Myerson.

"Mr Myerson's position is distinctive because, while his shares have decreased in value by some 90 per cent, he still holds around 30 per cent of PCH. The value of his assets may return.

"He is very different to, say, someone where the value of shares in Lehman Brothers or another failed institution were a material asset at the time of the divorce settlement. Secondly, the terms of the settlement were agreed by the parties - not imposed by the court."

He added: "This ruling highlights that assets can go dramatically down in value as well as up."