A former City fund manager applied to the Court of Appeal yesterday to renegotiate his £9.5 million divorce settlement saying he can no longer afford the payout as a result of the current economic crisis.
The crisis in the financial markets has driven down the value of Bryan Myerson shares in Principle Capital Holdings, where Mr Myerson worked as a fund manager. If successful, the case could lead the way for many more such applications from recession-hit former spouses.
According to Mr Myerson, his former wife, Ingrid, was awarded 43 per cent of the couple's £25.8 million fortune when the divorce settlement was agreed in February last year.
But since February the share price in Mr Myerson's investment company Principle Capital Holding has plummeted from around £2.95 a share to just 27.5p today. According to his lawyers, this leaves Mr Myerson in the position where he is now worth minus £500,000, taking into account his debts and mortgages, instead of receiving £14.6 million from the total assets. As a result, he would have to borrow money to pay his ex-wife if the settlement is upheld.
Mr Myerson has already paid his wife £7million but wants to opt out of the final instalment of £2.5million. He also wants to claw back the house in the couples native South Africa which he is yet to transfer into her name.
However, Mrs Myerson's lawyer, Nicholas Mostyn QC warned that if the appeal succeeds it will cause 'an explosion of litigation with which the courts can ill afford to have to deal with'.
The case was adjourned with judgment deferred for 10 days.