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Court deems trust wind up to be appropriate

Court deems trust wind up to be appropriate

Friday 24 March 2023

Court deems trust wind up to be appropriate

Friday 24 March 2023

Credit Suisse Guernsey has been directed to terminate the Green Vals Trust and distribute its assets to the beneficiaries after the courts waived the requirement for consent from one beneficiary to wind it up.

The ex-Prime Minister of Georgia, billionaire Bidzina Ivanishivili, his spouse and some of his children, made the application to the court last year, which also included a request to terminate the trust for minor and unborn beneficiaries.

The parties must agree a security and terms to ensure that any distribution complies with the relevant regulations and possible sanctions at the time of transfer.

His lawyers argued there had been a wide breakdown in trust with the Credit Suisse Group generally, that the family no longer wishes to participate in the current trust structure, and that termination was in the interests of the family’s future descendants.  

A previous relationship manager, Patrice Lescaudron, was found in 2018 to have acted fraudulently by lifting cash from Ivanishvili’s accounts to cover lossess with other clients. This led to global litigation against the Swiss bank by the family over several years. Litigation is ongoing in Bermuda. 

Credit Suisse did not oppose the application and were satisfied that Guernsey courts would have the jurisdiction to direct the trust to be wound up, but it's lawyers denied the allegations made by Mr Ivanishivili. 

Royal Court

Pictured: Guernsey's courts heard the application this week. 

The discretionary trust was set up in April 2012 for the benefit of Mr Ivanishvili’s family. 

Credit Suisse New Zealand was made trustee in July 2014. Credit Suisse Guernsey became trustee at the end of 2020, but New Zealand law remained the governing law of the trust.

Expert evidence on foreign trusts was obtained which showed that New Zealand was likely to approve of Guernsey’s jurisdiction to approve the wind up. 

Questions were raised on the possible legal implications of distributing assets to Mr Ivanishivili after the European Parliament voted to encourage the European Council and other nations to consider sanctioning him in December. 

His lawyers said termination and distribution of the trust would be done in full compliance with the regulations and legal consideration of the day in any case, and that sanctions were not relevant to the termination itself. 

Deputy Bailiff Jessica Roland delivered an ex-tempore judgement yesterday, where she said it would be appropriate for the court to approve the termination and distribution of the trust.

She noted that currently there are “no sanctions in place here” or elsewhere, but she said the trustee was “very diligent and cautious to check” while considering distributions.

Ms Roland acknowledged the “substantial and costly falling out with Credit Suisse Group” following which the family have shown a “wish to extradite themselves from the relationship”.

One of the beneficiaries not applying for termination does not currently benefit and was unlikely to have ever benefitted from the trust, she added.

Ms Roland also said that minor and unborn beneficiaries of the trust only have a “contingent interest”, although a significant one given the value of the trust fund. 

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