Moore Family Law

CALL US ON 01756 798200

       
BUSINESSMAN SCOT YOUNG HID £40M AND MUST PAY HALF TO HIS WIFE

BUSINESSMAN SCOT YOUNG HID £40M AND MUST PAY HALF TO HIS WIFE

Businessman Scot Young hid £40m and must pay half to wife

Bitter seven-year legal battle ends with judge's ruling that tycoon must hand over £20m and £5m towards legal costs

Owen Bowcott, legal affairs correspondent

The Guardian, Friday 22 November 2013 19.08 GMT

Scot Young and Michelle Young

Michelle Young described her husband as 'a powerful maniac who felt he could hide his vast wealth'. But the judge called her evidence unreliable.

A property developer who hid £40m from his estranged wife has been ordered to hand over half his missing assets at the end of a seven-year legal battle.

The lavish Mayfair lifestyle enjoyed by Scot and Michelle Young was exposed in a detailed high court judgment featuring Miami mansions, Surrey estates, Graff diamonds, £5,000 restaurant meals, allegations of financial involvement in Simon Cowell's American Idol and litigation costs of more than £6m.

"This case has been extraordinary even by the standards of the most bitter matrimonial breakdowns," said the judge, Mr Justice Moor, who took the unusual decision of allowing the family division case to be heard in public. "Extremely serious allegations have been bandied around like confetti," he said in his 48-page decision.

Michelle Young, 49, estimated that her husband was worth "several billions", or at least £779m, through his property and technology investments, and argued that she and her two daughters, who are students in London, were entitled to £400m.

Scot Young, 51, who spent six months in prison for contempt after refusing to reveal his assets and suffered poor health, maintained that he had debts of £28m. The judge branded the evidence from both of them as "not reliable".

In a statement issued immediately after the judgment had been handed down, Michelle Young said: "This has been a desperate struggle for me and my two daughters, cast adrift seven years ago by a powerful maniac who felt he could hide his vast wealth behind his super-rich friends."

Scot Young, who was representing himself and declined to comment, has been given 28 days to pay his former partner £20m and ordered to pay an additional £5m towards her legal costs. "I can see no reason why the husband should not pay the lump sum quickly, given that half the money he had in 2006 was held in shares which would have been readily realisable," Moor said.

His judgment concluded that the husband had secreted a total of £45m but that £5m of that should be set aside to pay his debts. "The husband has not complied with court orders. He has ... not made any reasonable offer to settle the proceedings. He has been found to have misled the court as to his finances to a very significant extent. On the other hand, the wife has raised issues that I have found to be completely unfounded."

But the judge said he was returning Scot Young's passport, confiscated in 2009, because it would not be reasonable to withhold it any longer. Moor said he had rejected "the more fanciful allegations" made against Scot Young. "I cannot see how he would have complied with an order for a lump sum of £300m, let alone £400m ... I am quite unable to say where the husband has secreted his money."

Earlier this month, the retail tycoon Sir Philip Green told the court that he had lent Scot Young £80,000 to help him buy a family apartment, and had never received the money back. He denied that he had ever held any money for Young.

The Youngs first met in 1988 and married in 1995. The financial arc of their lives reflected the UK's property and technology booms and busts. They started with virtually nothing, the judge observed. "Their standard of living increased exponentially ... The husband says the family lived beyond its means but he was not, in any way, a reluctant spender."

Michelle Young estimated his collection of watches to be worth in excess of £1m and their annual restaurant bills the same. Some outings cost £5,000, she said. There was a Graff diamond, supposedly worth another £1m. But the judge backed the husband's lower valuations.

A schedule of his assets Michelle Young discovered in 2002 showed he was worth £312m – but the figures relied on speculative future incomes. Young bought and sold houses in Belgravia and Mayfair. One lease was sold on to the late Russian oligarch Boris Berezovsky. The Youngs bought a waterside property in Miami in 2005, allowing the wife and daughters to move to the States.

The following year, the husband "became aware he was facing financial meltdown" because he owed large sums to to Bank of Scotland. The couple then separated although the husband initially funded his wife and children "generously".

Scot Young is currently an undischarged bankrupt. At one stage, his wife alleged he had obtained a financial interest in the US hit TV series American Idol. Simon Cowell dismissed the claim as untrue.

Moor said of Michelle Young's evidence: "I do not question in any way her honesty. I regret to say however to say that I do not consider her evidence to be reliable. She has become utterly convinced that her husband is a liar who has hidden vast resources. She sees conspiracy everywhere." Michelle Young, who has not received any income from her husband since 2009, lives in rented accommodation in Westminster and receives housing benefit, the judgment explained. She told the court she wished to purchase a property in Belgravia or a similar prime London location such as Mayfair, Knightsbridge, Hyde Park or South Kensingon at an estimated cost of between £15 and £20 million.

Catherine Thomas, of the solicitors Vardags, who represented mother of two Michelle, said: "This case has been amongst the most complex in English divorce law history ... There were 10,000 pages of court documents, 24 witnesses and assets spanning three continents, which really gives a sense of the scale and magnitude of the case.

The verdict sends a strong message to those across the world seeking to hide their true wealth from their spouse – even the most intricate of financial arrangements can be exposed by specialist law firms."

Philippa Dolan, a family law partner at Ashfords Solicitors, said: "It's hard to feel that sorry for a wife who's furious that she's only been awarded £20m, regardless of how much her husband may or may not be worth.

"Whether or not she'll be able to enforce it is another matter, of course. Since Scot Young has already served a prison sentence protesting his poverty, it will be difficult to persuade him to pay up even if he does have access to the funds."