It’s hard for investors at the moment. Deepening financial crisis within the Eurozone has negated the profitability of traditional forms of investment and wily financiers have had to diversify as a result, starting by investing in divorce.
This may seem like an unusual tactic to employ, but with many divorce settlements totalling tens if not hundreds of millions of pounds and investors taking a significant cut of any award issued, such speculation could result in a substantial pay-out if the backed spouse is successful. This is not to suggest that there is no risk involved (litigation is notoriously hard to predict), but it is certainly no more treacherous than playing with a worryingly unpredictable stock market.
Consider for example the on-going matter between Scot and Michelle Young. Following a bitter divorce battle, Scot was ordered to pay Michelle £27,500 a month in maintenance, as well as various properties worth an estimated £150 million in December 2009. In 2010, however, Scot declared himself bankrupt claiming that he had lost his money in a failed investment.
Michelle has claimed that her former husband has actually hidden his vast fortune in various offshore accounts. The matter is currently being heard in the High Court and it is believed that Michelle has borrowed as much as £3 million in order to fund her case.
Reports have suggested that the firm backing Michelle could be set to receive as much as £150 million if her case is successful.
A survey conducted last year by accountancy firm Grant Thornton revealed that 86% of divorce solicitors and other legal practitioners believed that spouses were hiding assets during divorce proceedings.
