In an Ohio case, the couple began negotiating terms of their divorce in October 2020 and decided to use Dec. 31, 2020, as the valuation date for marital assets. The main asset was the husband’s business, which provided corporate staffing and recruiting services.
On the sly: COVID-19 impacted the business, so, in March 2021, amid divorce negotiations, the husband applied for a PPP loan and got $9.4 million in April 2021. But the husband did not tell the wife or the valuation experts about the loan, even though the experts were still working on their valuations of the business. Negotiations were finalized, and the trial court granted the divorce in October 2021, using the valuation of the husband’s business without consideration of the PPP loan. The next month, November 2021, the loan was forgiven, which was also kept secret.
Later, the wife found out about the loan and went back to the trial court, claiming that the husband’s failure to disclose it was fraud and misrepresentation of the value of the business. The court agreed and vacated the dissolution decree.
Hold on: The husband appealed, and the appellate court reversed the trial court, ruling that there was no fraud and the PPP loan should be excluded since it was received after the agreed-upon valuation date. This was not a unanimous decision—a dissenting opinion stressed that the trial court has wide discretion to achieve equitable distribution in marital cases and it was correct to reconsider the matter because of the husband’s concealment of the PPP loan.
The case is Beach v. Beach, 2024 Ohio App. LEXIS 4637; 2024-Ohio-5991, and a case analysis and full court opinion are available on the BVLaw platform.