Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
In this case, the court held that it would exercise its inherent jurisdiction to remove a trustee in circumstances where the beneficiaries were creditors facing very substantial losses following the collapse of London Capital & Finance, and it was clear to the court on the facts that there was a very grave concern that those creditors did not have confidence in the existing trustee appointed to represent their interests. The decision addresses both the court’s statutory power to remove a trustee under section 41 of the Trustee Act 1925 (TA 1925) and its inherent jurisdiction to do so.
n an insolvency scenario, the court confirmed that the best interests of the creditors were, if not paramount, a very material consideration that the court should weigh in its decision-making. The extent of creditor losses here, the questionable conduct of several parties and the existence of conflicts of interest, among other matters, all contributed to the conclusion that it was unacceptable for the existing trustee to remain in office. Written by Brett Israel, partner in the restructuring and insolvency group, Marriott Harrison LLP.
London Capital & Finance Plc v Global Security Trustees Ltd  EWHC 3339 (Ch) (10 December 2019)
It is not uncommon in financial services cases for an insolvency practitioner to come across a trust structure where a trustee has been appointed to represent the interests of beneficiaries who are likely to be creditors. This case provides some guidance to insolvency practitioners on the circumstances in which the court may be prepared to exercise its discretion to order the removal of the trustee, as well as on the appointment of a replacement.
It is clear that where the trustee in office does not inspire confidence in the beneficiaries regarding the protection of their interests, it will be appropriate for the trustee to be removed on the ground that the best interests of those beneficiaries is a fundamental consideration which will weigh heavily in the balancing of interests assessment. However, the fact that the beneficiaries had fallen out with the trustee was unlikely, of itself, to be a sufficient determinant.
Access this article and thousands of others like it free by subscribing to our blog.
Read full article
Already a subscriber? Login
0330 161 1234