I've been wondering why this thread has been kept alive so long so I read back over all the posts and just have a few brief comments:

1 - This is not a labor law issue and never has been. You ought to understand that by now based on the labor related comments.

2 - Your opinion on the morality of your wife's behavior is completely irrelevant. This is a divorce. The equitable distribution has nothing to do with morality. That your wife is taking the food out of the mouths of your children (hyperbole intentional) has no bearing on the eventual financial solution.

3 - There is no threaten to sue, there is only sue or not sue. Until you are served a summons and complaint, it's all hot air.

4 - You'll forgive me for this blunt observation but you appear to be significantly PWd by this woman, now and in the past. You shouldn't be having any contact with her at all. You have a lawyer, that's he he's getting paid for. From now on if she wants to talk to the kids, fine. Anything else, refer her to your lawyer and learn to hang up on her if you have to.

5 - As to devaluation of the company your lawyer can, at some point, ask the court to order an audit by a forensic account. If there was any hanky panky on her part the audit will turn it up and the court will impute value to the business.

6 - Take the high road and give her the password, and only the password, and cease all business related communications (as I recommended in item 4). Anything else is the hot air I mentioned in item 3.