The division of property in a divorce can be a complicated matter. Marital property assets such as business assets and retirement plans are not as simple to divide as many might believe. The distribution of property is even more difficult when a high asset divorce takes place. Such a complicated scenario has recently arisen between two spouses who own the global fitness business CrossFit.
CrossFit, founded in Santa Cruz, California, is a multi-million dollar company that provides innovative workout instruction. The separating spouses between them own 100 percent of the business.
The wife alleges she is a co-founder, however the husband is reported to claim he started the company prior to their marriage. While a judge has yet to rule on the matter, the wife has already made arrangements to sell her supposed 50 percent share to another company for $20 million.
However, the husband believes the court will not award her that large a share of the business, and argues he should have been given the first opportunity to buy out his wife. The husband is concerned the purchaser of the wife’s share will change the business model significantly, causing its demise.
The case will be heard by a judge in Arizona next month. Arizona, like California, is a community property state. This means that any assets acquired during marriage are split evenly among the former spouses. Whatever the result, the state’s community property status will likely play a large part in the decision made by the court.
Source: Business Journal, “Divorce leaves CrossFit’s fate uncertain; Anthos makes offer,” Diana Samuels, Aug. 17, 2012