Selling the Goose: Orders for Sale of the Family Company

In financial remedy proceedings, the family home is routinely subject to an order for sale, whether to meet needs or in satisfaction of a spouse’s sharing claims. By contrast, orders for sale of the family company have hitherto been almost unheard of, certainly where such an order is forced upon the business owner in the teeth of their opposition.

However, is the traditional judicial reluctance to order a sale of the family company changing? In this article, we consider recent authorities which suggest that forcing a sale of the family company may increasingly be contemplated by the court. They include what is understood to be the first published case in which the court has ordered a sale over the business-owning party’s opposition, without giving that party the option of paying a lump sum to avoid it.

Introduction

Practitioners advising on a case with a substantial private company will usually start from a settled assumption that the spouse who runs the business will retain it, and the other spouse will receive their entitlement in the form of a transfer of a greater share of the non-business assets, often combined with a lump sum or series of lump sums.

Three questions follow:

(1) Will the court ever order the sale of a family company?

(2) If so, in what circumstances?

(3) Why are such orders so much rarer than orders for sale of the family home, and is that difference discriminatory?

The traditional approach

The courts have traditionally been reluctant to order the sale of a wealth-generating business. They have preferred to leave it with the party actively involved in running it or, far more occasionally, to divide the shares in the business, in specie, between the parties so as to provide a fair division of the copper-bottomed assets and risk-laden assets (so-called Wells sharing: Wells v Wells [2002] EWCA Civ 476).

The focus in such cases has therefore tended to revolve around business valuation issues, judicial discounts and departures from equality. The question has been how to achieve fairness where one party takes cash and the other keeps a risk-laden, illiquid asset.

The classic statement is that of Coleridge J in N v N (Financial Provision: Sale of the Company) [2001] 2 FLR 69, in which the court held that the practicalities involved in valuing, dividing up and/or realising certain species of assets justified a departure from the White v White [2000] UKHL 54 ‘broad objective’ of seeking to achieve equality, as that outcome was sometimes either impossible or only achievable at a cost which might not overall be in the family’s best interests. Coleridge J held:

‘I think it must now be taken that those old taboos against selling the goose that lays the golden egg have largely been laid to rest; some would say not before time. Nowadays the goose may well have to go to market for sale, but if it is necessary to sell her it is essential that her condition be such that her egg laying abilities are damaged as little as possible in the process. Otherwise there is a danger that the full value of the goose will not be achieved and the underlying basis of any order will turn out to be flawed.’

Coleridge J applied that reasoning in his later decision in R v R (Financial Relief: Company Valuation) [2005] 2 FLR 365, deciding that ‘the wife should be paid out in full but in an orderly way so as not to destroy the goose, as it is sometimes described, that lays the golden egg’. A forced sale, he observed, rarely produces the best price, particularly where the market knows that the seller has to sell.

Is there change in the wind?

HO v TL

In HO v TL [2023] EWFC 215, [2024] 2 FLR 175, Peel J restated the court’s options, following Moylan LJ in Martin v Martin [2018] EWCA Civ 2866 at [93]. The court may ‘(i) “fix” a value; (ii) order the asset to be sold; and (iii) divide the asset in specie’.

On the facts, Peel J declined to apply an accountancy discount on the basis, inter alia, that:

‘Although a substantial asset, the business is only part of the overall wealth. It is not the only significant resource. This is not a case such as Wells v Wells where it was far and away the biggest asset … It is H’s choice to retain it. It is open to him to sell it.’

Anecdotally, this decision has been relied upon extensively since it was handed down as the basis of an argument against any discounting whatsoever, whether accountancy or judicial, of a party’s shareholding in a private limited company where that party prefers to retain rather than sell their interest in a family business (with no departure from equality, either, to reflect the different nature of a shareholding in a private limited company as against an award comprising cash and property).

The argument we have encountered since HO v TL (which, in some instances, has been accepted by the court) is that if the business-owning party chooses to retain the business, whereas the other party wishes it to be sold, why should the other party suffer any reduction whatsoever in their award as a result of the business owner’s preference? If they prefer to keep it, they must pay out precisely 50% of the value of the shareholding (net only of notional tax) to the other party.

Thus, it appeared for a time following HO v TL that we had returned to having to argue against the proposition that ‘the only difference between it (i.e. the company) and its cash proceeds is … the sound of the auctioneer’s hammer’, which appeared to most of us to have already been firmly rejected by Moylan LJ in Martin v Martin.

Fortunately, that point has now been put to bed (again) by Moylan LJ in Culligan v Rosemin-Culligan [2026] EWCA Civ 948. In that case, the parties had at first instance received mathematically equal 50/50 outcomes, with the husband receiving a far greater proportion of his award in the form of risk-laden, illiquid company shareholding, and the wife a far greater proportion of the cash, property and other copper-bottomed assets. In July 2026 the Court of Appeal overturned the first instance award on the basis that it did not achieve ‘a fair balance of risk and illiquidity in the division of the assets between the parties’.

More interesting for the purposes of this article is whether, since HO v TL, the court will now be more likely to order a forced sale of the business so as to achieve a fair sharing outcome, despite opposition to that course from the business owner. Both the decision of HHJ Hess in GO v YA [2024] EWFC 411 and a recently published decision of HHJ Rowland in LE v EL [2024] EWFC 481 (B) suggest that may be the case.

GO v YA

In GO v YA [2024] EWFC 411, HHJ Hess raised the possibility of a sale with counsel during the hearing, although neither party had sought one. A sale of all the company’s stock would have triggered a ‘flooding the market’ discount of 70%–75%, as identified by the single joint expert. A sale of the company as a going concern might not.

The judge considered whether the case fell into the category identified by Coleridge J in N v N [2001] 2 FLR 69, where ‘the goose may have to go to market’. He noted that the husband’s age and health were against him. He also thought the husband’s insistence on continuing to work showed a lack of sensible judgement, however understandable in human terms. If the husband wished to continue, that could not fairly be at the cost of placing the wife in a potentially very difficult position.

Drawing on HO v TL, HHJ Hess observed that if fixing a fair value with a realistic structure is difficult or impossible, and Wells sharing is undesirable, ‘selling the asset must be a real possibility, even if neither party has asked for it’.

The order was structured to give the husband a chance to avoid a sale. He was given until a fixed date to raise a lump sum, for example by borrowing, selling some shares or bringing in a younger partner. If he failed, the company shares would be sold and the net proceeds divided equally.

LE v EL

In this decision of HHJ Rowland in Birmingham, recently published as LE v EL [2024] EWFC 481 (B), the court ordered a sale of an owner-managed family business despite strong opposition from the husband. This is believed to be the first published case where a court has ordered the sale of a trading business, rather than presenting the owner with an alternative outcome, for example, payment of a lump sum to meet the financial settlement.

The parties had been married for more than 20 years. The husband was the CEO and majority shareholder of a successful private company worth £7.8m. He held 75% of the shares, with the wife holding the remaining 25%. She did not actively work within the business.

The wife sought the sale of the business and an equal division of the proceeds, whereas the husband proposed to acquire the wife’s shares and pay her a total of £1.8m over several years.

HHJ Rowland rejected the husband’s proposal on the basis that it represented just 28% of the net value of the business, as well as uncertainty over how he would be able to fund such payments on the basis of his own evidence, which had emphasised the liquidity and cash flow challenges within the business.

The court therefore ordered the sale of the business and its subsidiaries, with the proceeds to be divided equally after settling relevant costs and a director’s loan account.

Interestingly, HHJ Rowland said as follows when considering the lack of any reported cases concerning orders for sale of private companies:

‘That may be so, but it does not mean that such orders have not been made in the 24 years since White v White [2001] 1 All ER 1 was decided, or that it should not happen in an appropriate case. One may observe that there have been orders for the sale of farms in order to achieve fairness, and what difference should there be between a farm which provides an income and a place for a farmer to live, and a business which provides income for its owner?’

HHJ Rowland went on, in the subsequent costs judgment, LE v EL (Costs) [2025] EWFC 534 (B), to make a costs order in favour of the wife in the sum of £150,000, noting that her early proposal to sell the businesses and divide the proceeds equally was particularly significant when compared with the husband’s unrealistic open position, which he had maintained throughout the final hearing.

When might a court order a sale?

Peel J’s list in HO v TL at [25] is the natural starting point. Whether a business should be retained, sold or divided in specie ‘will depend on the facts of each case’. Relevant features include:

• whether the business was founded during the marriage or pre-owned;
• whether it has its origins in one party’s non-marital wealth;
• whether both parties were involved in its strategy and operation;
• the ownership structure; and
• whether Wells sharing is practical or realistic, given that it usually keeps the parties tied together to some extent.

The cases suggest further considerations that tend to push towards a sale:

• Large corporate or personal debt.
• Illiquidity or insufficient sustainable income to enable the retaining party to fund a fair payment to the other party via extraction from the company.
• No realistic plan. The retaining party may have no credible proposal for funding the payment out.
• Unrealistic timescales. Extraction from the business via a series of payments spread over an unrealistically long period may not represent a fair outcome in a sharing case.

Other matters appear less settled, but may potentially still be taken into account:

• Risk to the recipient spouse. Is there evidence that the retaining party would run down the business, or divert it, to frustrate the claim?
• Age and succession. Does proximity to retirement make a difference? Are exit or succession plans relevant to whether a sale should be ordered?
• Last resort. Is a sale always a last resort? The direction of these authorities would support a conclusion that a sale should be considered as a genuine option at a much earlier stage than has traditionally been assumed. See also the reasoning of the Court of Appeal in Culligan v Rosemin-Culligan in rejecting the proposition that Wells sharing was always a ‘last resort’, which might apply by analogy to orders for sale as well.

Why are sales of companies still unusual?

First, a sale is often unnecessary. It often suits both parties for one to keep the risk-laden business and the other to be bought out via transfer of non-business assets, often combined with payment of a series of lump sums via extraction from the business over time.

Second, a sale forced on an unwilling managing director or shareholder is often extremely difficult to implement and costly, and will in most instances realise less than true market value, defined by the International Valuation Standards 2022 as the amount for which an asset would exchange between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and without compulsion (as cited by HHJ Hess in CG v SG [2023] EWHC 942 (Fam)).

The scale of the potential loss was illustrated in BR v BR [2025] EWFC 88. Peel J considered the different valuation bases for a sale of a business on the open market both with and without management/shareholder consent and concluded that, unless all shares were sold with consent, the parties’ holdings would be reduced by up to:

• 35% in C Ltd;
• 45% in D Ltd; and
• 12.5% in E Ltd.

In the worst case that meant reductions of about £44m, £25m and £700,000, respectively, or about £70m overall. The best case, with no further discount, applied only if all shareholdings were sold with full consent.

Third, there is a fairness argument. If one party ‘lives for work’ and has built the business over decades, is it fair for the other to force a sale and take that away, when their sharing entitlement can be met in another way?

Is the difference in approach unprincipled?

The short answer is that the two assets differ in kind. The family home has a special place in every marriage, as recognised in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24. A family business is fundamentally different. Often, only one spouse has been actively involved in it (although it is not at all unusual, where only one spouse is active within the business, for the other spouse to be a shareholder and/or on the payroll).

Where one party has built the business through ‘blood, sweat and tears’ and the other has not been involved, a forced sale may often ‘feel’ unfair. Plainly, in some cases the business may have been brought into the marriage by one spouse, in which case they may be entitled to a departure. We know that sharing does not always have to mean equal sharing.

Even in a case where a non-involved spouse is entitled to a full equal sharing award, in financial remedies that will mean balance-sheet equality, subject to any discount for risk or illiquidity so as to create a fair sharing outcome on a net effect schedule. It does not necessarily mean a sale of all resources with an equal division of the net proceeds.

However, the arguments against a sale of the business are harder to sustain in the exceptional case where the evidence shows that both parties work in the business to an equal extent and both wish to retain it for themselves. If one party is allowed to retain it and the other is bought out through a series of lump sums, often heavily discounted for risk and illiquidity, it is difficult to see how that is not discriminatory.

Conclusion

The court’s traditional reluctance to sell the goose remains well founded. Forced sales are costly, difficult to implement, and will often result in a substantial overall diminution in value. However, the direction of travel from these authorities suggests that the court will now consider a sale where valuation is particularly uncertain, the retaining party’s plans are unrealistic, or the recipient would bear disproportionate risk, and it may do so of its own motion.

A conditional order, giving the retaining party a fixed period to fund a payment out before a sale takes effect, remains the practical middle course, but LE v EL serves as a cautionary tale to any litigant who goes into proceedings assuming that they will be given such an opportunity.

Practitioners must now be prepared, in the right case, for the court, having weighed all the relevant factors, to exercise its discretion to make an order for the goose to go to market.