An estranged couple behind a firm which supplies towels and bathrobes to top hotels have spent nearly £2 million on lawyers while fighting over assets of at most £6.6 million in a divorce court, a judge has heard.
Mr Justice Holman said Barbara Cooke, 58, and Michael Parker, 55, have "completely lost touch with reality".
The judge said the dispute, which has yet to be aired at a trial, was a "scandalous waste of court time".
He warned Ms Cooke and Mr Parker - directors of BC Softwear, which is based in High Wycombe, Buckinghamshire, and employs 17 people - that they were heading for a "catastrophe" and urged them to negotiate.
Mr Justice Holman aired his concerns while analysing the latest stage of the dispute at a pre-trial hearing in the Family Division of the High Court on Friday.
He had raised similar concerns about the size of legal bills being run up at another preliminary hearing in May.
"They have spent a third of their wealth slugging it out," said the judge.
"These people have completely lost touch with reality.
"I don't know where the responsibility lies. It's probably shared."
He added: "This is heading for catastrophe."
The judge estimated that about another £200,000 would be spent on lawyers if agreement was not reached and a trial took place.
"This whole case is a scandalous waste of court time," he said.
"I don't know who is responsible.
"They have spent £2 million they can ill afford."
He added: "Sometimes one can see cases where people are just absolutely determined to go on and on and on. I don't know on which side the fault lies but this seems to be that sort of case."