Work | 29th August 2019

In the middle of family conflict

APPOINTED BY A FAMILY IN DISPUTE OVER FAMILY WEALTH INVESTED IN A COMMERCIAL PROPERTY DEVELOPMENT BUSINESS WITHIN FAMILY-RUN TRUST-OWNED COMPANIES

Goal

To investigate actions of a family member/former CEO of the family’s property development and investment business, stand up to his efforts to secure and maximize his personal benefit from the family wealth at the expense of the companies and other family members, achieve a resolution fair to all the family, and help enable them to achieve family peace.

My involvement

A European property investment business, family-owned through trusts. Family in turmoil over division of family wealth, leading to inflated demands by one family member, contested by other family members, for sums claimed from the companies as remuneration and in repayment of alleged loans. Conflicting accounting records. Family board members wanted non-family board participation. I was recommended by the company’s lawyer. Dealing with broken family relationships, dominance of the claimant family-member, his use of tactical litigation to exert influence over the trustee. Determining that the only solution was financial separation between the warring family factions. Liaising with the trustee-owner and managing the response to efforts from the claimant as a beneficiary to persuade the trustee, in addition to his efforts to persuade the board. Withstanding extreme pressure over three years involving various legal actions against the companies, and other tactics including personal challenges against my actions as a director. In the course of the litigation against the companies investigating the historic actions of the claimant whilst he was running the business. In the midst of all that, negotiating terms and then implementing a property refinancing, dealing with rent review, and negotiating property sales. Eventually petitioning the Jersey court and obtaining a protective winding up order akin to an English administration order, as the means to enable the goals to be achieved.

Outcome

The relentless challenge by a litigious family member required the board to take the difficult decision to apply to the Court for a protective order to forestall further value destruction and enable the disposal of the property to be completed free of litigation with the view to an objectively fair distribution of surplus cash from the trustee to beneficiaries, so each can go his separate way. Role completed.