Donald Sterling Gets Clipped Again

IMG_8925By Leslie O’Neal

Donald Sterling can’t catch a break these days.  The disgraced owner of the Los Angeles Clippers lost another major battle in Court last month, with a Judge ruling in favor of his estranged wife and allowing her to move forward with the sale of the team.  Sterling appealed the ruling in a final effort to block the sale, but his appeal was denied last week.  After audio recordings leaked of Sterling spewing racist comments to his mistress sparked outrage throughout the sports world, it’s not surprising that the Court found Sterling’s wife to be a more credible witness than Sterling himself in matters related to Clipper’s business.  The sale of the Clippers is expected to be the precursor to an impending divorce battle where the proceeds from the sale – reported to be roughly $2 billion – will likely be divided pursuant to California law.

In Georgia, it is not uncommon to see marital property ordered to be sold and the proceeds from the sale divided.  Georgia Courts have the authority in a divorce case to order any asset to be sold for purposes of equitably dividing the proceeds.  This is most commonly seen with the sale of a marital residence or other real estate that has value.  It is less common for a Judge to order a business to be sold because often the business is an important stream of income for at least one of the parties – and potentially the source of income that the other party is making an alimony claim against.  Therefore, Courts often consider it counterintuitive to order the sale of a business; and rather award the business to one spouse while compensating the other spouse for his or her marital interest in the business through some other asset or a monetary award.

Once the business is either sold or valued by the Court, the question becomes how the value (or the proceeds from the sale) will be divided between the parties.  In Georgia, title is not relevant to the division of an asset, which means that even if one spouse was never listed as an owner, officer, or employee of the business, that spouse still has a marital interest in the value of the business because he or she is considered to have contributed to the marriage’s overall wealth in other ways.

Additionally, Georgia is an equitable division of property state – not an equal division state.   This means that the Court does not have to divide the assets equally and is entitled to award a greater share of the marital property to one spouse over the other.   Some of the factors that a Court can consider when deciding how to allocate marital assets are the duration of the marriage; any prior marriage of either party; the age, health, occupation, and employability of each party; and the contribution or services of each spouse to the marriage.  Even the conduct of the parties can be taken into account in Georgia when dividing up the assets of the marriage.  Thankfully for Donald Sterling, conduct will not play a role in his marital asset division because California is an equal division state and divides the assets of the marriage 50/50.  Maybe that means he can spend less money on divorce attorneys; and more money on a much needed PR team.