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Business owners in Pennsylvania who are seeking a divorce may be encouraged to hear that it is possible to remain business partners even while dissolving the marital relationship. According to U.S. Census Bureau statistics, 3.7 million small businesses are owned by married couples. Many of them face divorce each year, placing their businesses at risk as emotions interfere with corporate decision-making and cash flow. For some businesses, it is impractical […]

Couples who have settled their divorce in Pennsylvania may recall that divorce settlement agreements are final and enforceable only if there has been a full and fair disclosure of marital assets. A recent decision of the Pennsylvania Superior Court tests this principle in a case where one spouse suspected that her husband may have been less than honest in disclosing his net worth. In Ford v. Ford, the wife petitioned […]

Perhaps the recent non-precedential Superior Court opinion in Rice illustrates the hazard that is inherent when a business owner gives half of the stock and pays an equal salary to his spouse who does not actually work in the business. The Fayette County trial court in Rice v. Rice, No. 1125 WDA 2012 (October 31, 2013) awarded 57% of the marital estate to the husband, including all of the stock […]

A decision announced recently by the Supreme Court of Rhode Island, McCulloch v. McCulloch, 69 A.3d 810, illustrates why buyouts are generally favored over in-kind distributions of stock when dividing the value of family businesses in equitable distribution proceedings. The trial court in McCulloch, faced with uncertain valuations of the businesses from both sides and a court-appointed expert, elected to award 25% of the stock to Wife and 75% to […]

In Habjan v. Habjan, ___ A.2d ___ (Pa.Super.2013), the Superior Court was confronted with a question of whether to “pierce the corporate veil” by holding Husband responsible for a lawsuit initiated by his business corporation against Wife, thereby abrogating the release that Husband gave her in his marital settlement agreement. Husband and Wife were each 50% owners and officers of a corporation formed during the marriage to operate motels in […]

A recent unpublished decision of the Superior Court of Pennsylvania confirms that oil and gas rights, not disclosed in the discovery or inventories of the divorcing spouses, nevertheless must be considered when dividing marital property in equitable distribution. In Welsh v. Welsh, No. 237 WDA 2012 (June 19, 2013), the Superior Court affirmed the decision of the Washington County judge. In that case, husband and wife filed inventories in which […]