Representation of the Z Trusts [2015] JRC 214 (20 October 2015)

Representation of the Z Trusts [2015] JRC 214 (20 October 2015)

Where professional trustees are in office with no unmanageable conflict, it is cost-effective and in the interests of creditors for trustees to conduct winding up under court supervision. Appointment of Rawlinson & Hunter as trustee of Z II Trust is appropriate, subject to undertakings, and Volaw's retirement is sanctioned. Barclays will remain as trustee of Z III Trust due to unresolved contingent liabilities. Court will determine priority of Equity's contingent claim in due course.

Citation
[2015] JRC 214
Parties
Trustee of Z II Trust: Volaw Trustee Limited; Trustee of Z III Trust: Barclays Private Bank & Trust Limited; Proposed Trustee and Connected Creditor: Rawlinson & Hunter Trustees SA; Beneficiary and Settlor: Mrs C; Former Trustee and Contingent Creditor: Equity Trust (Jersey) Limited; Connected Creditor and Family Member: E; Contingent Creditor: Abbey National Treasury Services Plc (Santander); Creditor: Queensdale Properties Limited
Jurisdiction
Jersey
Judgment Date
20 October 2015
Procedural Posture
Representation (directions to Trustees) / Post Insolvency, Directions and Appointment of New Trustee
Outcome
Directions given for retirement and appointment of trustees; undertakings required; priority issue to be determined; Barclays to remain as trustee of Z III Trust; creditor claims and payments subject to further directions.
Legal Topics
Administration of Insolvent Trusts, Appointment and Retirement of Trustees, Priority of Creditor Claims, Trustee Indemnity, Court Supervision of Trusts
Trusts Insolvency Equity Administration of Insolvent Trusts Appointment and Retirement of Trustees Priority of Creditor Claims Trustee Indemnity Court Supervision of Trusts

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Parties

Volaw Trustee Limited

Trustee of Z II Trust

Barclays Private Bank & Trust Limited

Trustee of Z III Trust

Rawlinson & Hunter Trustees SA

Proposed Trustee and Connected Creditor

Mrs C

Beneficiary and Settlor

Equity Trust (Jersey) Limited

Former Trustee and Contingent Creditor

E

Connected Creditor and Family Member

Abbey National Treasury Services Plc (Santander)

Contingent Creditor

Queensdale Properties Limited

Creditor

Procedural Posture

Representation (directions to Trustees) / Post Insolvency, Directions and Appointment of New Trustee

Legal Issues

  1. 1 How should insolvent trusts be administered under court supervision?
  2. 2 Should a professional trustee or insolvency practitioner be appointed to wind up the trusts?
  3. 3 What is the priority of creditor claims, especially contingent claims by former trustees?

Ratio Decidendi

Where professional trustees are in office with no unmanageable conflict, it is cost-effective and in the interests of creditors for trustees to conduct winding up under court supervision. Appointment of Rawlinson & Hunter as trustee of Z II Trust is appropriate, subject to undertakings, and Volaw's retirement is sanctioned. Barclays will remain as trustee of Z III Trust due to unresolved contingent liabilities. Court will determine priority of Equity's contingent claim in due course.

Court Disposition

Directions given for retirement and appointment of trustees; undertakings required; priority issue to be determined; Barclays to remain as trustee of Z III Trust; creditor claims and payments subject to further directions.

Orders

  • Volaw granted leave to retire as trustee of Z II Trust.
  • Mrs C's appointment of Rawlinson & Hunter as trustee of Z II Trust sanctioned, subject to undertakings.