Alabama Supreme Court Clarifies Business Interests in Divorce

When spouses divorce, dividing up the house and bank accounts is just the beginning. For couples who own closely held businesses, divorce can get complicated fast—especially when one spouse controls most of the company.

A recent Alabama Supreme Court decision, Ex parte Kenneth G. Hood , shines a light on how business interests can be evaluated—and potentially challenged—during divorce proceedings.

At Ryan & Rouse, we handle high-stakes divorce cases involving everything from business ownership to hidden income. This case is a must-read for anyone facing divorce with complex assets.

🔍 Case Background

In Ex parte Kenneth G. Hood , the wife and husband were going through a divorce. The husband owned a family limited partnership(FLP), and the wife alleged that he mismanaged the business and transferred assets unfairly.

She filed derivative claims on behalf of the business entity, claiming that the husband—who was also a general partner—had breached fiduciary duties and diverted assets for personal gain.

The husband responded that the wife had no right to bring these claims because she wasn’t technically a partner in the business.

But the trial court allowed the wife’s derivative claims to move forward—so the husband appealed to the Alabama Supreme Court.

⚖️ What the Alabama Supreme Court Held

The Alabama Supreme Court denied the husband’s petition, allowing the wife’s claims to proceed.

Here’s why it matters:

• The Court emphasized that even if a spouse is not a formal partner in a business, courts have broad equitable powers during divorce to examine and divide marital assets.

• That includes allowing claims on behalf of entities where one spouse may be using the business to shield assets or avoid fair division.

• The Court acknowledged the wife’s right to raise these derivative claims in the interest of reaching an equitable outcome in the divorce.

 Key Takeaways

This case is a reminder that:

✅ Divorce courts in Alabama aren’t limited by business titles —they’ll look at the reality behind asset ownership.
✅ Spouses can bring derivative claims when one partner is hiding assets or misusing a business entity.
✅ Alabama law gives courts flexibility to reach fair results in complex financial situations.

Ryan & Rouse: Divorce Lawyers for High-Asset and Business Disputes

At Ryan & Rouse, we know how to trace assets, uncover financial misconduct, and fight for a fair share when business interests are on the line.

We represent North Alabama clients in cases involving:

• Closely held businesses and family partnerships

• Real estate investments

• Secret transfers and asset hiding

• Complex divorce litigation and discovery

We dig deep. We subpoena records. We hire experts when needed. And we fight for what you’re owed.

Facing Divorce With Business Assets? Don’t Go It Alone.

If your spouse owns a business—or uses one to control money—you need an experienced divorce attorney who knows how to cut through the smoke and mirrors.

📲 Call Ryan & Rouse today (256-801-1000) for a confidential consultation.
Let us help you protect your future.