Legal Question in Family Law in California
Hiding or Diminishing Value of Assets
My husband entered into a business purchase from his parents some 15 years ago. I was never privy to the actual contract. Over the past 5-7 years no payment has been made on the company purchase and I was told that since the value/income had decreased he stopped paying his mother and she had "called it good." One month after I filed for divorce (of 25 yr marriage) she sent a letter to my attorney calling for default of the loan. No actual suit has been filed, just the threat. He now declares the value of his business as 63K with a 60K due to his mom. This business supported our family of 5 these past 15 years. It is a cash business. Will a judge take their positioning to garner all the assets seriously? Even if no payment or suit has arised in possible 5-7 years? Cut me a check for $1500 and call it good?
2 Answers from Attorneys
Re: Hiding or Diminishing Value of Assets
You should also consider whether the business is properly valued. A business which has supported a family
for a long time may have significant value (although not in all cases). Business valuations look at the continuing
relationships of a business ("goodwill"), the assets, and the income stream produced. This may be quite a bit more than
the taxable profits.
Experienced family law judges are generally savvy about the games played in dissolutions, and tend to make realistic decisions. However,
a judge could always find the debt legitimate and lower the value of the business to some extent (perhaps not by the entire amount of the
debt if it is not fully due now).
Jed Somit
Jed Somit, Attorney at Law
1440 Broadway - Suite 910
Re: Hiding or Diminishing
It is difficult to answer your question without knowing more about the "contract" between your husband and his mother. If it called for regular payments, and no payments were made for 5 years, and that failure to pay was a breach, then you may be able to assert the defense of statute of limitations (4 years from the date of breach on a written contract). You may have other defenses, such as laches. The point is, you have the same defenses against your mother-in-law that you would have against any other creditor. To know what defenses might be asserted, you need to see the original agreement.
It would be worth it for you to retain counsel. The difference is $1,500 versus $30,000.
Matthew Kremer
Law Offices of Matthew M. Kremer
9665 Chesapeake Drive, Suite 310
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
