Chris Hohn, one of the most successful U.K. hedge-fund managers, may recast the country’s divorce law if he wins more than half the family assets in his split from his wife.
A judge may rule as soon as this week in Hohn and Jamie Cooper-Hohn’s dispute over their $1.3 billion estate and roles in the $4.3 billion charitable foundation they created with their fortune. The case, which may lead to the country’s largest divorce settlement, could change the law for the super rich if the judge accepts Hohn’s argument that his financial talents constituted a special contribution to the marriage.
“Chris Hohn’s track record is without doubt extremely impressive,” Deborah Jeff, head of family law at Seddons in London, said in a phone interview. “If this isn’t a special contribution, I cannot think of an example that is.”
Banker divorces have led to wide-ranging changes in U.K. family law before. The break-up of German heiress Katrin Radmacher and former JPMorgan Chase & Co. investment banker Nicolas Granatino led to the acceptance of pre-nuptial agreements and a case involving another JPMorgan banker set standards for the dissolution of assets in civil partnerships.
17-Year-Marriage
Hohn, who founded The Children’s Investment Fund Management UK LLP, and his wife separated in 2012 after 17 years of marriage. At a trial in July, Hohn sought to give Cooper-Hohn a 25 percent share of their joint assets, citing his “special contribution,” while she was seeking 50 percent.
Diana Parker, a lawyer at Withers LLP who represents Hohn, didn’t return a telephone call seeking comment. Daniela Fleischmann, a spokeswoman for Cooper-Hohn, said she declined to comment.
TCI, Hohn’s hedge fund, returned 39.7 percent in the first 10 months of last year, making it fifth best in Bloomberg Markets magazine’s annual hedge fund ranking, and second best among large European hedge funds managing more than $1 billion.
If successful, the argument would become a staple of disputes involving wealthy couples, family lawyers said. The hurdle to a larger award is still very high and only a small number of exceptional cases clear it because courts don’t like to demean the role of the other spouse, who is often the wife and mother.
‘Sign This’
Hedge-fund managers “will probably be looking very carefully at this,” Emily Brand, a partner at Winckworth Sherwood LLP in London, said in a phone interview. “They should consider carefully a pre-nuptial agreement or a post-nuptial agreement. They may say to their spouse, ‘darling I know Chris, you’d better sign this.’”
While the “special contribution” argument that Hohn invoked has been successful in previous U.K. divorce cases, none had as much money at stake.
WPP Plc Chief Executive Officer Martin Sorrell relied on it in his 2005 divorce, in which a judge ruled his contribution was exceptional and awarded his ex-wife 40 percent of their 75 million pounds ($120 million) of assets. The next year a judge gave the ex-wife of Axis Capital Holdings Ltd.’s then Chief Executive Officer John Charman 36.5 percent of their 131 million-pound marital estate on the basis that her contribution didn’t match his “extraordinary talent and energy.” Charman lost a later appeal for a larger share.
Gender Discrimination
It is far from certain that Hohn’s argument will succeed. Judge Jennifer Roberts could also decide that Cooper-Hohn’s contribution was equal.
“The court could go completely a different way and say ‘no, this amounts to gender discrimination,’” Brand said. “This will be a very, very powerful message.”
In the U.K., judges determine how a divorce settlement is structured, giving them significant power. Payouts to spouses became more generous after a 2000 court case increased the standard for maintenance, often for a lifetime, which has led to London being known as the divorce capital of the world.
“This is an international center of wealth with many offshore jurisdictions connected with the U.K., William Healing, a lawyer at Kingsley Napley LLP in London, said in a phone interview. ‘‘It is a very tailor-made discretionary jurisdiction. It’s a bit like making a Savile Row suit.’’
A London judge on Nov. 7 ruled that a businessman must pay his banker ex-wife, 14 years his junior, a 2 million-pound lump sum after a marriage that lasted less than three years.
Judge Bruce Blair said the man, whose identity wasn’t revealed, must pay the amount as part a previously agreed settlement negotiation. The man said his ex-wife had been ‘‘profligate’’ in her spending and that his business interests were in a ‘‘very different place financially.’’
Harvard Meeting
Hohn, who met his wife at a dinner party at Harvard University in the 1990s, accused her at a hearing last month of possible ‘‘criminal activity’’ and breaching a fiduciary duty to the couple’s charitable foundation. Her lawyer, Martin Pointer, said Hohn was in contempt of court for supplying documents from the case to a third party.
Still, acrimonious divorces aren’t limited to bankers. Heather Mills dumped a glass of water on former Beatle Paul McCartney’s lawyer in 2008 after a judge awarded her 24.3 million pounds in their marital dissolution case. The amount was a fifth of the 125 million pounds Mills had sought.
