Greater due diligence required by Trustees after latest ruling in Tchenguiz case
The latest ruling in Investec v Glenalla, the long running litigation relating to the affairs of London property developer Robert Tchenguiz, was handed down this week by the Royal Court of Guernsey and has highlighted the importance of due diligence to Trustees accepting new appointments, according to Nick Robison, partner at Babbé and Guernsey Advocate.
Mr Robison said: “The Court’s decision on the Global Priorities Issue has great significance for retiring and successor trustees, and perhaps even more so for those advising them. Given the “first in time” finding by the Court, a successor trustee ranks behind its predecessor (as well as any other previous trustees) when seeking to have recourse to the trust assets in the event of a later insolvency.
“The decision will undoubtedly sit uncomfortably with successor trustees, who do not have full visibility on the affairs of their predecessors and may be concerned that liabilities that they have incurred, even many years after their appointment, will only be paid from whatever remains in the trust after the liabilities of their predecessors have been satisfied.
“It is perhaps now even more important than ever before for a successor trustee to exercise caution when deciding whether to accept an appointment.”