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Royalties: cautionary tales for singer/composer clients

Date:26 JUL 2022
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Deborah Jeff, Simkins

This article examines the allocation of royalties as part of the financial settlement in divorce.

It defines what royalty payments are, to whom they are payable, and the relevant copyright law. In divorce, pre- or post-nuptial agreements will determine the financial settlement, including the treatment of royalty streams. Otherwise, family law applies: assets generated during the marriage are divided equally between the parties unless there is a reason not to.

The court will seek to ascertain the capital value of income streams from royalties. Potential conflict between commercial arrangements and matrimonial law is highlighted by the divorce of former Clash bassist Paul Simonon and his wife Tricia Ronane.

The article further details a 2019 case, CB v KB, involving the divorce of another prominent bass player with six children from his marriage, aged 7 to 20. Different expert valuation methods of his five income streams are examined, including how they are capitalised. Mr Justice Mostyn’s judgment in relation to these valuations is outlined, together with the settlement: £10.2m to be divided equally through staged lump sum payments. 

The article concludes that such clean-break settlements are not always possible or desirable. Valuation of IP rights is expensive and subject to much variation. 



The full article will be published in the August issue of Family Law



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