Sylvester Stallone hit the headlines once again recently, after news broke that his wife of some 25 years, Jennifer Flavin, had filed for divorce. In his latest blog post, George Wilson takes a closer look at how Stallone’s alleged misconduct would sit with the Courts of England and Wales.

The divorce suit was filed just days before a video emerged of Stallone, now 76 years old, covering up a tattoo of Flavin on his bicep with a picture of Butkus, the bull mastiff from the Rocky film franchise. Although Stallone was not shy about disclosing the video to the world at large, it has been alleged by Flavin that he hasn’t quite disclosed things he should have and has hidden marital assets within the divorce proceedings. Flavin’s legal team further state that the Stallone has:

“engaged in the intentional dissipation, depletion and/or waste of marital assets which has had an adverse economic impact on the marital estate”

Naturally, Stallone’s solicitors have denied any sort of misconduct.

How would Stallone’s alleged misconduct sit with the Courts of England and Wales?

In the jurisdiction of England and Wales, all parties to financial remedy proceedings within divorce owe a duty of full and frank financial disclosure to the Court and, in turn, their spouse. Essentially, parties within the proceedings must disclose all of the available information about their assets and income, by way of detailed financial disclosure, usually on the standard document used for such disclosure, Form E. Such disclosure will include evidence of the value of properties parties have an interest in, copies of bank statements linked to bank accounts in their name, evidence of their income and income needs, evidence of other assets such as investments and ISAs, valuable chattels such as artwork, jewellery, and watches, and motor vehicles.

Parties will also need to provide evidence of dividend counterfoils, company accounts, tax returns, and any liabilities they might have against their name. This list is by no means exhaustive, and parties are often shocked at how much detail they are required to provide within their financial disclosure. A blank Form E can be found at this link for ease of reference.

If parties to a divorce refuse, or fail to provide the required disclosure, the consequences (and remedies available to the Court and their spouse) are very serious. The court is likely to draw “adverse inferences” about parties who fail to provide the required disclosure. Essentially, this means that the Court can, and will, assume a spouse has something to hide and can make robust assumptions about the trust value of their assets and level of their income. Furthermore, if the divorce (and financial remedy proceedings) has concluded and one spouse believes that their ex-spouse had hidden assets, it may be possible to reopen the case. The court can reopen any case if it finds there has been deliberate and fraudulent non-disclosure of assets by one spouse.

Such assets, now visible and disclosed, will come under scrutiny, and the court can decide as to how the same should be divided. Perhaps the worst outcome of being found ‘guilty’ of non-disclosure, is the Court finding that a spouse has been in contempt of court and if the contempt has been deliberate, then the guilty spouse can be fined or even have a custodial sentence forced upon them. It is therefore of paramount important to work with a solicitor to ensure that the disclosure you provide is full and frank.

Stallone has also been accused of dissipating marital assets. Dissipation of assets occurs when one spouse has used, given away or otherwise transferred, converted, wasted, mismanaged, or adversely affected assets that would have been subject to division and distribution. Dissipation of assets may be in the form of the quick sale of assets such as property, stocks and shares, or other chattels such as artwork. Dissipation can also be more subtle and can be in the form of significant ‘gifts’ to friends and family, substantial cash withdrawals, gambling, or other unusual and possible reckless purchases. The court will see such dissipation of assets as an act of litigation misconduct.

Under the Matrimonial Causes Act 1973, it is possible for one spouse to apply to freeze certain assets belonging to the other, to reduce the risk that they are dissipated. In such circumstances, it is essential to act quickly, with the assistance of solicitor, should you suspect that your spouse intends to dissipate assets, as it is much more difficult to deal with the assets once they have been dissipated.