McDonald’s Proprietor Ordered to Pay $2+ Million Alimony

Tennessee case abstract on enterprise valuation, alimony after 37 years married, and digital proof destruction in divorce.

James Franklin Byrd v. Valerie Finley Byrd v. Byrd Brothers, LLC, et al.

Shelby County Courthouse

The husband and spouse on this Shelby County, Tennessee, case married in 1982.  The husband owned and operated quite a few Memphis-area McDonald’s franchises, and the spouse was a stay-at-home mom.   In 2016, the husband filed for divorce on the grounds of irreconcilable variations.  The spouse and her attorneys encountered issues acquiring data concerning the husband’s enterprise.  In 2014, the couple’s tax return confirmed revenue of over $3.5 million, however the husband requested her to signal a 2015 return exhibiting solely $18,000.  The spouse claimed that the husband had entered right into a enterprise enterprise with somebody in Dubai, with a checking account in Switzerland.  The trial court docket granted a movement to compel, and the husband was required to signal a launch permitting his accountant to supply data instantly.

In 2017, a listening to was held concerning momentary help.  The husband produced an announcement exhibiting his revenue and bills, and people quantities had been equal, to the penny.  The spouse, then again, confirmed a shortfall of just about $9000.  She additionally sought bills for forensic CPA Robert Vance.

The spouse was awarded momentary alimony of $3000 per 30 days, and was additionally ordered to pay legal professional charges and litigation prices.  After one other listening to, the court docket granted the spouse’s movement to retain CPA Vance.

The spouse then amended her grievance and added about 19 entities by which the husband had an alleged curiosity.

The husband was subsequently present in civil contempt for discovery violations.  At one level, when the husband discovered that the spouse would request his cellular phone, he “took off” to the parking storage and was allegedly deleting recordsdata.

Trial was finally held in 2019 for 4 days.  The husband stipulated to being “100% at fault” for the divorce.

The spouse’s professional witnesses included licensed valuation specialist Mike Pascal of Forensic Valuation Companies, PLC, the identical agency as CPA Robert Vance.  He relied upon a monetary assertion that had been obtained from a financial institution pursuant to s subpoena, exhibiting the worth of the McDonald’s eating places to have a worth of about $5 million.  He testified that he believed that the husband had a complete web price in extra of this quantity.

The spouse additionally launched the professional testimony of licensed laptop examiner Ted Scott, who examined a laptop computer final utilized in 2018.  He discovered that 175,000 recordsdata had been erased after the court docket had ordered recordsdata preserved.

The husband denied deliberately deleting something, and as an alternative urged that it was the one that did routine upkeep on the pc.

After listening to the proof, the trial court docket adopted the spouse’s valuation of the marital property, of simply over $5 million.

The husband was awarded most marital belongings, however the spouse was awarded about $2.3 million alimony in solido, to be paid inside one yr.  She was additionally awarded alimony in futuro.

As to the removing of recordsdata from the laptop computer, the court docket discovered that the destruction was intentional.  After post-trial motions and what the trial decide described as in all probability the lengthiest divorce decree he had entered in his profession, the husband appealed to the Tennessee Court docket of Appeals.

The husband first argued that the trial court docket erred in specifying that the husband had been responsible of inappropriate marital conduct.  However for the reason that husband had stipulated that he was 100% at fault, the appeals court docket held that any error was with out prejudice.

The husband additionally argued that professional witness Vance shouldn’t have testified within the place of witness Pascal.  However for the reason that witness was not a court-appointed witness, the appeals court docket held that this was correct.

The husband subsequent argued that the trial court docket had erred in its valuation and division of the marital property.  He argued that the trial court docket had used “outdated data” in making its resolution, however the appeals court docket held that the valuation was made as shut as practicable to the date of the divorce.

The husband additionally argued that the trial court docket erred in adopting a advertising and marketing method to worth the husband’s enterprise.  However the appeals court docket famous that valuation is just not a precise science, and that the trial court docket is entitled to nice deference within the methodology employed.  It additionally identified that the husband was the one who failed to supply the data which might have been helpful in different approaches to valuation.  It additionally famous that the husband was not a reputable witness.  For these causes, the Court docket of Appeals affirmed the valuation holding.

The husband additionally argued that the trial court docket failed to contemplate the tax ramifications of its division of the property.  Specifically, he argued that he would face tax liabilities if he bought the eating places with the intention to meet the duty to pay alimony.  However the Court docket of Appeals famous that he failed to supply any proof of these tax penalties.

After addressing another points, the Court docket of Appeals turned to the problem of the husband being present in prison contempt concerning the laptop computer.  After reviewing the proof, the appeals court docket affirmed.

For these causes, the Court docket of Appeals affirmed the decrease court docket’s resolution, with some slight modifications, and remanded the case.

No. W2021-00926-COA-R3-CV (Tenn. Ct. App. Oct. 31, 2022).

See unique opinion for precise language.  Authorized citations omitted.

To study extra, see The Tennessee Divorce Course of: How Divorces Work Begin to End.

To study extra, see Enterprise Valuation in Tennessee Divorce.