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News analysis: Jeff and Mackenzie Bezos' divorce - 'a loving exploration'

Date:13 FEB 2019
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Clive Hogan, of rhw Solicitors LLP, writes that Jeff Bezos, founder of Amazon and the world’s wealthiest man and his wife, MacKenzie Bezos, a novelist, announced on the 9th of January 2019 that they were getting divorced after a period of 'loving exploration'. The announcement has raised some eyebrows amongst fellow family practitioners and I’m sure that certain Washington State attorneys are delirious with excitement in anticipation of the coming legal case.

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Mr Bezos met his wife in 1993 prior to founding Amazon, when they were both working as Hedge Fund managers. Amazon recently crossed the $1 trillion valuation mark and Mr Bezos’s worth is estimated to be $137 Billion.  There is currently much speculation as to whether the Bezos’s signed a pre-nuptial agreement, which in the USA, are legally enforceable. Under the laws of Washington State, if the parties can’t reach an agreement or there is no pre-nuptial agreement, their assets will be split evenly. Mr Bezos would lose half of his shares in Amazon and no longer be the world’s richest man. Conversely, Mrs Bezos would become the world’s richest women in her own right.

But what if Amazon had been founded in a garage in Slough by a British Jeff Bezos? Would the situation be any different?

To start with, unless it was for two years or longer, Mr, or Mrs, Bezos would be unable to rely on “loving exploration” as a ground for divorce. They would have to either wait two years and agree to divorce or find grounds for unreasonable behaviour or adultery. Given the news that Mr Bezos may, allegedly, have been secretly dating a television helicopter reporter, such an accusation may not be difficult for Mrs Bezos to raise.

If the ‘British’ Bezos’s had entered into a pre-nuptial agreement, the situation would be very different to that in the states. Pre-nuptial agreements in Britain are not strictly legally binding and given the magnitude of the assets involved in this case, any pre-nuptial agreement would not only have to hold water, but an entire ocean. The Bezos’s would be helped if they signed agreements stating that they had received legal advice and had full financial disclosure. Even if they had, given the exceptional success of Amazon in the last 25 years, Mr Bezos would be hard pushed to preserve his entire fortune relying on the pre-nuptial.

If ‘British Bezos’s’ brought the matter when to the court in England, the court’s starting position is a 50/50 division of the assets. A business built up entirely within the marriage, as Amazon was, would be regarded as a matrimonial asset. Prima facie, the court would regard Mrs Bezos has having a 50% entitlement to Mr Bezos’s interest in Amazon. To push back against this Mr Bezos would have to show that his needs were greater than Mrs Bezos or that he had made a “Stellar Contribution” towards the marriage. Clearly, in the Bezos’s case, it would be very hard indeed for either party to argue that their needs were great enough that they should get more than a 50% spilt of $137 Billion. If he were to argue that he had made a Stellar Contribution, Mr Bezos would need to show that his talent in founding and developing Amazon was of such importance, it would be unfair to ignore. As the world’s wealthiest man and largest single shareholder in the world’s second most valuable company, Mr Bezos could certainly attempt to put forward this argument. Even so, success would be far from guaranteed.

Whatever the outcome of this case, the Bezos divorce is certainly likely to capture the interests of legal professionals and the public alike, for a long time to come.

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