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Offshore Cases

Y Trust No.1 (January 2016) (Unreported)

January 2016 Trusts

CAYMAN ISLANDS

GRAND COURT

ABSENT OR DEFECTIVE PROTECTOR CONSENT - VALIDITY OF TRUST ADMINISTRATION - APPROVAL OF APPOINTMENT OF PRIVATE TRUST COMPANIES

This case illustrates various ways in which the problem of absent or defective protector consent may be overcome, and the factors relevant to obtaining the Court’s approval to the appointment of private trust companies in place of individual trustees.

The Trust was established in 1982 and settled by a company under the control of one of the family members. The Settlor was also named as the first protector and under the terms of the Trust, the Trustees had the power to appoint a new protector when a protector had not been in office for one month. The Trustees executed a Deed of Appointment in 1982 to appoint a new protector. However, the Settlor/original protector was still in existence, having not been dissolved, as was the intention, for a period of one month. Thus, the 1982 Deed of Appointment was considered to be ineffective. The invalidly appointed Protector was treated as the protector until it released its protector powers and was dissolved in 1992. The Settlor/original protector, being the entity which had validly held office as protector (albeit unknown to the parties) was dissolved in 1985 upon which there ceased to be a validly appointed protector. The issue was whether or not any acts undertaken during the period between the constitution of the Trust in 1982 and the dissolution of the Settlor in 1985 required protector consent which had not been validly given. Unfortunately, a Deed of Retirement of Trustees executed in 1984 was such an invalid act, which placed in doubt 31 years of subsequent trust administration.

 

To continue reading full articles in PDF format:
Y Trust No.1 (January 2016) (Unreported)

 

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EDITOR & HEAD OF LITIGATION BERMUDA

Christian R. Luthi
Tel: +1 441 298 7814
Email: christian.luthi@conyersdill.com


Head of Litigation British virgin islands

Mark J. Forte
Tel: +1 284 852 1113
Email: mark.forte@conyersdill.com


Head of Litigation Cayman Islands

Paul Smith
Tel: +1 345 814 7777
Email: paul.smith@conyersdill.com


HEAD OF THE ASIA DISPUTES & RESTRUCTURING GROUP

Nigel K. Meeson, QC
Tel: +852 2842 9553
Email: nigel.meeson@conyersdill.com

Offshore Cases

Y Trust No.1 (January 2016) (Unreported)

20 January 2016

CAYMAN ISLANDS

GRAND COURT

ABSENT OR DEFECTIVE PROTECTOR CONSENT - VALIDITY OF TRUST ADMINISTRATION - APPROVAL OF APPOINTMENT OF PRIVATE TRUST COMPANIES

This case illustrates various ways in which the problem of absent or defective protector consent may be overcome, and the factors relevant to obtaining the Court’s approval to the appointment of private trust companies in place of individual trustees.

The Trust was established in 1982 and settled by a company under the control of one of the family members. The Settlor was also named as the first protector and under the terms of the Trust, the Trustees had the power to appoint a new protector when a protector had not been in office for one month. The Trustees executed a Deed of Appointment in 1982 to appoint a new protector. However, the Settlor/original protector was still in existence, having not been dissolved, as was the intention, for a period of one month. Thus, the 1982 Deed of Appointment was considered to be ineffective. The invalidly appointed Protector was treated as the protector until it released its protector powers and was dissolved in 1992. The Settlor/original protector, being the entity which had validly held office as protector (albeit unknown to the parties) was dissolved in 1985 upon which there ceased to be a validly appointed protector. The issue was whether or not any acts undertaken during the period between the constitution of the Trust in 1982 and the dissolution of the Settlor in 1985 required protector consent which had not been validly given. Unfortunately, a Deed of Retirement of Trustees executed in 1984 was such an invalid act, which placed in doubt 31 years of subsequent trust administration.

 

To continue reading full articles in PDF format:
Y Trust No.1 (January 2016) (Unreported)

 

 

EDITOR & HEAD OF LITIGATION BERMUDA

Christian R. Luthi
Tel.: +1 441 298 7814
Email.: christian.luthi@conyersdill.com


Head of Litigation British virgin islands

Mark J. Forte
Tel.: +1 284 852 1113
Email.: mark.forte@conyersdill.com


Head of Litigation Cayman Islands

Paul Smith
Tel.: +1 345 814 7777
Email.: paul.smith@conyersdill.com


HEAD OF THE ASIA DISPUTES & RESTRUCTURING GROUP

Nigel K. Meeson, Q.C.
Tel.: +852 2842 9553
Email.: nigel.meeson@conyersdill.com