Paul Beckett

Company Trust Fusion 13th September 2010  |  Posted by Paul Beckett in Companies Contact Paul

The decision of Deemster Kerruish sitting in the Isle of Man High Court of Justice on 19 September 2002 in Re Poyiadjis 2001-03 MLR 316 establishes a new Manx equitable principle which will have wide-ranging effects and which has broadened the area of cover afforded by asset protective structures.

That principle is set out in the head note to the case:  "The funds in the [company] bank accounts could not be regarded as simply corporate assets. Each company was solely owned by a trust and its directors were also trustees. Given that the companies had no significant creditors, the trustee directors could, at any time, wind up the companies and secure the assets for the trusts. In those circumstances, the bank accounts ought to be considered as trust as well as corporate assets, and the interposition of the companies did not, therefore, modify the interests and duties of the trustee directors in respect of the bank accounts. Accordingly, the trustee directors could not proceed as if the companies were independent parties with absolute rights over the assets."