Below are some examples of the opportunities and challenges we respond to on behalf of business and wealth owners, their families and their other advisers.
Our Middle Eastern client’s banks froze his assets in three jurisdictions due to political upheaval in his home country.
We carefully reviewed the relevant banking regulations and contacted the banks. Subject to conditions, we got them to release half his assets – three weeks after the freeze began – and agreed a process to release the rest of his assets.
The trustees of a non-UK trust contacted us when their bank froze their assets because their beneficiaries were linked to a newly sanctioned individual.
We persuaded the bank that this individual had no control, power or right to the trust’s assets, following which the bank released the assets.
Having your assets frozen can be extremely stressful, but there are often simple ways of getting a proportion of the funds released.Segun Osuntokun, Partner - Commercial Dispute Resolution
Our client was owed a substantial sum. The debtor claimed he could not pay but we knew he held assets in a non-UK trust.
We obtained relevant information, analysed the trust, and argued that it was a sham. The courts agreed and granted us an order that required the trust to pay the debt.
Our client was served with bankruptcy proceedings at a particularly inconvenient time: he was in the middle of negotiating a refinancing deal – that included personal guarantees – for his property portfolio.
We made an application to court to have the order dismissed, and at the same time negotiated with the creditor to settle the debt.
It’s crucial that security is not only of sufficient value, but held in a jurisdiction where it can be readily enforced.Emma Howdle-Fuller, Partner - Head of Banking
The Courts are increasingly willing to attack structures that are put in place for “asset protection” purposes.Ruben Sinha, Registered Foreign Lawyer - Private Client
Banks increasingly require personal guarantees to sit alongside security so that the distinction between an entrepreneur’s personal assets, and business assets, is often blurred.Emma Howdle-Fuller, Partner - Head of Banking
Our client accepted crucial funding from a business contact when her company was starting out. When she tried to repay the debt the lender claimed he was owed a large shareholding in what was now a successful business. There were no formal loan documents and the lender would not budge.
We advised on the lengthy negotiations – and a formal mediation process – that reached a settlement before court proceedings were issued.
Our client faced a claim that his import-export business was a partnership. The claim was made by a business associate he had a longstanding commercial arrangement with.
We reviewed the documentary evidence, email correspondence, and the conduct of both parties. We were able to show that the business relationship was a complex contractual arrangement rather than a partnership. The relationship was strained but we were able to negotiate an agreement that would govern the parties’ future relationship.
By their nature, claims often arise at commercially sensitive moments.Graham Shear, Partner – Head of International - Litigation and Corporate Risk
Our client had made a series of successful investments for friends and family, and they asked her to carry on. But when an investment failed, one investor claimed our client had breached Financial Conduct Authority (FCA) rules on investing on behalf of others.
The investor was right. We worked with the FCA to minimise actions on past breaches and put in place a fully regulated structure for ongoing investments.
Our client, who was regulated by the Financial Conduct Authority (FCA), gave his family advice on its substantial investment portfolio. His father, whose assets made up a large part of the portfolio, told him that he was going to make a tax disclosure in relation to certain offshore assets.
We advised our client on his position – and obligations – as an FCA regulated individual, in context of that disclosure.
Investment advice is highly regulated. If you’re giving investment advice make sure you know your obligations.Matthew Baker, Partner – Investment Management
An open dialogue with the FCA is key to damage limitation.Segun Osuntokun, Partner – Commercial Dispute Resolution
Several of our clients were minority shareholders in a family business. They had been directors of the company but had been removed by the majority shareholder who, they considered, was not acting in the best interest of the company.
We advised them on making an application for a just and equitable winding up of the company; so they could extract the value of their shares. The court application encouraged the majority shareholder to discuss the issues, and our clients were able to negotiate a buy-out of their shares.
Our client, an ultra-high net worth individual, was a minority shareholder in a commercial property company. The other shareholders had excluded her from management decisions and cut company dividends.
We advised her on issuing unfair-prejudice proceedings that led to arbitration and a positive outcome: the other shareholders bought her shares at full market value.
Minority shareholder disputes are commonplace with business owning families. It’s important to identify the actual cause of the dispute, to prevent wider issues from being drawn in.Graham Shear, Partner – Head of International, Litigation and Corporate Risk
It’s critical to protect the value of the company, whilst resolving a family dispute.Damian Bloom, Partner – Private Client
An ultra-high net worth individual wanted to sell her half-share in a joint venture. The other shareholder did not agree.
We took a close look at the shareholders’ agreement and helped our client negotiate a phased exit that allowed her to realise her investment.
Our client was concerned that the actions of a majority shareholder, who had significant influence over the board of directors, went against her interests. The shareholder had persuaded the board to give him a 50% pay rise and stop paying dividends.
We advised our client that these actions were prejudicial, and helped her negotiate a buy-out of her interest in the business.
Our client’s company had bought a non-UK trading business. The deal stipulated that it had to deliver a certain amount of profit but the business underperformed.
We advised our client on a delicate negotiation of the breach of warranty claim, taking into account that he wanted to keep the business’s original owner as part of his offshore management team.
Protecting the company’s value while resolving a dispute between the owners is a delicate balancing act.Graham Shear, Partner – Head of International, Litigation and Corporate Risk
Private company shareholder disputes are usually very personal. It is important to remove the emotion from the conflict and come to a commercial solution.Joby Davies, Partner - Dispute resolution
A family business was held and run by non-UK trustees. The trustees worked hard to balance commercial risk against the long-term interests of the beneficiaries. Yet the beneficiaries felt the trustees’ decision-making process on key commercial matters was slow and expensive, and that this was affecting the business.
Our solution was to create a family advisory board and amend the trust to give the advisory board powers over key business decisions. This helped the beneficiaries and trustees to work together and preserve the business for the family.
The beneficiaries of a substantial trust believed their trustees’ fees were too high. The trust deed included a power, held by the protector, to add trustees but not a power to remove trustees.
We advised on using the protector’s rights to flood the board with new trustees. The shift in the balance of power – together with regulatory and fiduciary pressure, and a reasonable indemnity – was enough to force the original trustees to step down.
Our clients, beneficiaries of a trust that held a family business, were unhappy with the terms of a commercial loan their trustees had arranged.
The trustees had accepted poor terms – that breached an existing finance arrangement – from a bank they had connections with, and the breach dented the value of the business. We advised on a claim for breach of trust. Our clients received compensation for the loss and the trustees were removed.
Trustees, by definition, need to be trusted. But keeping a power to remove them is a helpful back up.Damian Bloom, Partner - Private Client
A key issue is often not the appointment of trustees, but who should hold the power to appoint, and remove them, after the death of the settlor.Simon Phelps, Partner - Private Client
“Protecting the company’s value while resolving a dispute between the owners is a delicate balancing act.”Graham Shear, Partner – Litigation and Corporate Risk