Bloomberg News

Oil Trader Faces Jail for Failure to Make Divorce Payments (1)

November 18, 2013

An oil trader may face jail after his ex-wife said he failed to make alimony and child-support payments of about 428,000 pounds ($690,000) in a two-year-old divorce case that had already reached the U.K. Supreme Court.

A lawyer for Yasmin Prest told a London court today that her ex-husband, Michael Prest, should be found in contempt of court for failing to make the payments.

Yasmin Prest won a landmark U.K. Supreme Court ruling in June giving her the right to force offshore companies owned by her former husband to turn over assets as part of a 17.5 million-pound divorce award. She argues that Michael Prest, who another court said was worth an estimated 38 million pounds, has failed to make annual payments against the full amount.

Michael Prest, who has British and Nigerian citizenship, had the case postponed until next year because he has surgery scheduled later today to remove tumors in the arches of his feet.

“This is just the latest in a long list of attempts by Mr. Prest to delay this,” said Jeremy Posnansky, a lawyer for Yasmin Prest. “He is in breach of at least 11 cost orders made against him. He’s brought it on his own head.”

Michael Prest’s Petrodel Resources Ltd. held several U.K. properties in trust for him, and the Supreme Court gave Yasmin Prest access to them to satisfy the full award in the case. The judgment was prominent in the U.K. as British law provides that companies are legally separate entities from their shareholders -- raising a corporate veil -- in order to protect investors from debts or liabilities the company may accumulate.

Divorce Capital

Past divorce rulings in the British capital have tended to favor the spouse with fewer assets, leading a U.K. appeals court to call the country the “divorce capital” of the world. The Supreme Court in the Prest case sought to issue a measured opinion that addressed the facts of the case while limiting the right to pierce the corporate veil, lawyers said.

Judges have been more willing to consider actions for failing to comply with court orders in divorce cases, said Suzanne Kingston, a family lawyer at London-based Withers LLP.

“There are often these sorts of contempt of court cases but after a seemingly long time of judges not being so robust there’s an increasing willingness for the court to take the bull by the horns in family cases,” Kingston said. “There has been a rash of cases where the person in contempt has been imprisoned.”

A review of U.K. divorce law was triggered last year, in part by the case of German heiress Katrin Radmacher and ex-JPMorgan Chase & Co. (JPM:US) investment banker Nicolas Granatino. In 2010, the U.K.’s top court ruled for the first time that a U.S.- style pre-nuptial agreement on dividing assets, reached before marriage, should be enforced.

To contact the reporter on this story: Suzi Ring in London at sring5@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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