Can a Royal Court blessing be given to a momentous decision by directors of an underlying company to a trust?
The trustee of a Jersey discretionary trust sought under article 51 of the Trusts (Jersey) Law 1984 for the court’s blessing for its ‘momentous decision’ to procure the sale of trust property, comprising minority interests in seven companies holding commercial land in Germany. The trust’s interest was held through a company (I Ltd) that was wholly owned by the trust, so that the decision to sell was that of the directors of the company.
The trustee had become aware that one of the beneficiaries of the trust had been convicted in the English courts of a VAT fraud. The trustee was the subject of a ‘no consent’ letter from the Jersey Financial Crimes Unit. The underlying companies considered that they would have difficulty in re-financing, which was shortly to become necessary, given the ultimate beneficial interest of a convicted criminal. The trustee sought the court’s blessing for a decision to sell its minority holding in the underlying companies for €1,368,946 (£1.1m), or a figure within 10 per cent of that…
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The states approved the proposed Employment (Amendment No 8) (Jersey) Law 201- on 18 July 2014.
Formal, court-driven restructuring proceedings are available into Luxembourg law, but for practical reasons, these are rarely used in practice.