It’s worth *what* now?
Apr 6th, 2009 by admin
As of the end of the week, the stock market ended on an upturn. It gained for the fourth consecutive week, and it’s doing better than it has for the last seven weeks. I’m happy to hear this and I hope the trend continues.
Still, the market is down from its 2007 high of around 14,000 and the effects of its drop are serious. For divorcing clients, there’s the challenge of dividing up assets that used to be worth a lot more than they are now. And, unfortunately, there’s no way to know whether the upward trend of the market will continue and when financial markets will return to a new equilibrium. Here’s the silver lining: If you approach settlement expecting market values to remain low or drop farther, you won’t overcommit yourself financially.
Case in point: A UK court upheld a February 2008 property settlement despite the fact that one party’s company “collapsed” over the past year. Brian Myerson reached a divorce settlement with his former wife Ingrid. Their agreement was that he’d get to keep shares of his comp and she’d get cash and a beach house. Since then, the share price of his company dropped by more than 90 per cent (ow) and angry shareholders ousted him as CEO of the company that he himself founded (double ow).
In the wake of this financial shift, Myerson has asked the court to vacate the settlement. No dice. Lord Justice Thorpe eloquently put it thus: “Why should the court subsequently relieve him of the consequences of his speculation by rewriting the bargain at his behest?” In other words: We’re not going to save you from a dumb deal that you reached voluntarily.
Take this opportunity to learn from Myserson’s situation. Intelligent financial settlements will need to balance dynamic assets such as stock with more stable assets. To do otherwise is to risk having to cringe as you ask “It’s worth *what* now?”