Trust Litigation Update
Extract
Trust Litigation Update
Put not your trust in trusts? Lessons from the Thyssen litigation
Trust arrangements have in recent decades become an increasingly widespread aspect of Hong Kong commercial and family life (even if not quite yet as common as the BVI company). Many trust arrangements were set up in the late 1980s and 1990s, common motives including (i) protection of assets in the uncertain period leading up to the 1997 resumption of Chinese sovereignty; (ii) the securing of fiscal benefits. However, the long-term nature of trust arrangements means that it is not uncommon for schemes set up in the 1970s, '60s, '50s or even earlier to give rise to disputes many years later as the identities and interests of beneficiaries change, and sometimes simply because circumstances change fundamentally over the decades. Many disputes of this sort are resolved relatively discreetly, by arbitration, private court hearings or agreement. From time to time, however, they enter the public domain for one reason or another. The recently-resolved Thyssen trust litigation contain some useful lessons for those involved in either setting up such trusts or in dealing with any disputes which arise in relation to them.The Thyssen trustIn 1983, Baron Hans Heinrich Thyssen-Bornemisza settled some very substantial business assets upon trust in Bermuda. The trust was operated by an independent supervisory board.The purposes for its establishment are said to have been three-fold: (i) to protect assets in...See the full content of this document