The surprise divorce of Amazon CEO and world’s richest man Jeff Bezos and his wife Mackenzie has focused the world’s media attention on the eye-watering dollars at stake in their split.
Mackenzie Bezos reportedly could walk away with as much as $96 billion from their divorce settlement, earning her in addition to her own independent professional status, a new title as the world’s richest woman. But the Bezos divorce has also shone a light on the complexities of the business world where couples who co-own a business may want to divorce, but continue working together.
Is that even possible?
Yes, but it requires the active commitment by both parties to using a process like Collaborative Practice which is revolutionising the way separating couples resolve their issues without stressful fights in court. In particular, it can be used to retain a business partnership even if the private relationship ends.
I had a matter where the couple were separating. They were co-owners of a very successful business in Brisbane and it was important to them to be able to continue working in that business together as it provided a very good income stream for them and they both had very distinct roles in that business. Neither could replace the other. The husband worked full-time and his wife was happy to work part-time. So the challenge was to find a way that they could keep the business but also have a family law property settlement,” she says.
We used the principles of Collaborative Law to do this, including asking the parties what their “interests” were which essentially means what their future goals, needs and concerns were so that we could ensure that everyone was on the same page. If the Collaborative approach had not been used it would have been very difficult to achieve this outcome.
Section 81 of the Family Law Act (the “clean break principle”) requires the Court to finalise the financial relationship between parties. That is not always ideal, particularly in circumstances such as this, where the parties would have had to strip money out of the business to pay out the wife her entitlement. That would have taken away important working capital from the business or required the business to incur expensive borrowing. Neither party wanted that and just did not see the sense in that.
It’s also important to note that if the matter had gone through court, the business would have been valued based on historical figures at the date that the Court was deciding the matter or a valuation closest to that date. That’s why it’s important to work with the parties’ accountants to include provisions to enable either party to exit from the business so that they did not have another dispute on their hands.
It’s crucial that the accountants and other professional advisers are involved in the discussions right from the beginning, just as lawyers who practice in Collaborative Practice should be brought in early in situations like this. People sometimes take steps which, whilst well-meaning, can be misguided. We can work with professional advisers to ensure the best outcome for the couple and their business.
Jennifer Hetherington, Family Law Specialist, Hetherington Family Law