News arrived yesterday afternoon that the marriage between an 82-year old billionaire media tycoon and his 44-year old employee-wife (younger than two of his children) has, surprisingly, not worked out. Yes, Rupert Murdoch has filed for divorce from Wendi Deng, who bravely threw herself between her hubbie and a shaving-foam pie, citing “irretrievable breakdown”.
Murdoch is worth a mere $12 bn – so how much of that does Deng stand to get? As Murdoch has filed in New York, we may never know – they are tight on the privacy of settlements. If Deng stars wearing diamond-studded solid-gold skirts, you can guess it’s quite a lot.
But was he wise to file in New York? As Spear’s reported late last year, “The courts of London and New York share reputations as being receptive to large divorce claims.” If you look at the five legal cases which have shaped modern English divorce (the fifth of which was only delivered this week), English law definitely favours the poorer party, from using a 50/50 starting point to “piercing the corporate veil”. English courts also take all assets into account.
By contrast, Suzanne Kingston and Michael Gouriet of Withers wrote, ‘New York courts follow a different approach, identifying property of the parties as being either “marital property” (which generally includes assets earned during marriage) or “separate property.” New York courts will “equitably distribute” the “marital property,” but not the “separate property” (which generally includes pre-marital assets and inherited assets).
Always innovative, however, New York courts have expanded the traditional notion of “marital property” to include (and have placed very significant values on) various “intangible assets” such as educational degrees and professional licences, as well as business “enterprise value”, and certain types of appreciation on “separate property”.
So a New York settlement looks like it will have many more boxes to tick, rather than a “simple” pile-up of assets.
Finally, prenups are much longer established in America than in England, where they weren’t given legal weight until the case of Radmacher v Granatino in 2010. In fact, they are not binding in England if their terms are felt too unfair (however a judge construes that), so their recent validity is susceptible to undermining.
Their two children will have to be taken into account, too: courts will ensure that they are provided for, even if (as is highly unlikely) they were ignored in a prenup.
It is probably easy to predict that Deng’s settlement will be more than sufficient for most, but within that great range of millions-to-billions, there are an awful lot of points a judge might choose to stop at.
Update: Reuters reports on another billionaire tycoon divorce, of Harold Hamm (money from Continental Resources oil co) from Sue Ann. They do not, say Reuters, have a pre-nup, which means his $11 bn fortune is up for grabs. The piece is worth a read to see how things might have looked for the Murdochs.
This story first appeared on Spears magazine
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