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Received Wisdom the Investec Arguments Brought To England

Date: 06/01/2022 Type: Articles Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: James Lister – Stevens & Bolton

Ever since the Privy Council’s landmark decision in Investec v Glenalla1 in April 2018, there have been various attempts to use the arguments raised in that case in England, on both sides of the issue (being in the main whether a trust’s creditors could enforce their claims against the trust’s assets directly, or had to rely on pursuing the trustees and the trustees’ right of indemnity from the trust assets in turn).

January of 2021 saw a particularly ambitious attempt to use the Investec authority to the advantage of the trustees of a family will trust, endeavouring (as they were) to avoid several millions of pounds of liability to a (purportedly) secured lender.

In Williams v Simm2 the Court was asked to look afresh at the Privy Council’s decision in Investec as it applied to a notionally simple domestic will trust.

Noteworthy Developments In The Liechtenstein Legal Landscape In 2021

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Walter Dorigatti – Gasser Partner

As this piece is being written, cases of infections with COVID-19 are surging (once again) all across Europe. Although we hoped that the virus would be left behind together with the year 2020, COVID has not loosened its grip over everyday life and also continues to affect judicial and administrative processes in Liechtenstein. Consequently, the Liechtenstein government has recognized the necessity to extend ancillary administrative measures (nearly) throughout the current year (until 30 September).

ESG Factors Here To Stay In Fraud And Insolvency

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Jeremy Snead and Fay Warrilow – Ogier

Onshore or offshore, whatever your industry, ESG factors are here to stay - that was the emerging theme of a series of workshops we ran on sustainability issues within fraud and insolvency at September’s FIRE Summit for fraud and insolvency practitioners.

That’s not to say that the future, or even the exact nature, of ESG and sustainability in business are mapped out. In the series of sessions that we held the practitioners agreed that the nebulous scope of the topic made it hard to define the nature of the issues, particularly given the varied possibilities for focus on the ‘E’ (Environmental), the ‘S’ (Social) or the ‘G’ (Governance).

Convoy Collateral Ltd V Broad Idea :The Return Of Black Swan And More?

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Nick Ractliff and Steven Bird – PCB Byrne

On 4 October 2021, an enlarged seven-member Board of the Privy Council handed down a majority judgment (4:3) in the case of Convoy Collateral Ltd v Broad Idea International Ltd.1 It confirmed that the British Virgin Islands’ (“BVI”) court has jurisdiction to grant an injunction against a non-cause of action defendant based in the BVI in support of foreign proceedings.

However, the significance of the decision has more far-reaching consequences. This was not lost on Sir Geoffrey Vos who, in giving the minority judgment, described the decision of the majority as a “ground-breaking exposition of the law of injunctions” 2and an attempt at providing a “juridical foundation for the entire law of freezing and interlocutory injunctions” 3.

Cvas Key Cases Of 2021

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Katy Ferguson and Bethan Cunniffe – Charles Russell Speechlys

With the commercial property market being crippled by the effects of the pandemic, coupled with the pre-pandemic pressures already facing retailers, ‘landlord only’ CVAs have become (and look set to continue to be) an increasingly popular method of restructuring distressed retail businesses. Conjunctively, impaired landlords have galvanised to challenge such CVAs.

In this article we explore the three high-profile retail tenant cases of 2021, providing long-awaited guidance on the legality and fairness of their use by distressed retailers.

The Exploitation Of Covid-19 Government Support Schemes: What Next?

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Simon Jerrum and Beatrice Bray – HFW

In response to the economic disruption caused by the COVID-19 pandemic, the government rapidly introduced several large-scale schemes to support vulnerable businesses. Two of the most utilised government support measures were the Coronavirus Job Retention Scheme (‘CJRS’) and the Bounce Back Loan Scheme (‘BBLS’). Whilst these measures have provided a lifeline for many businesses, they have also facilitated an increase in fraudulent activity. This is evidenced by a reported 24% rise in fraud during the pandemic.1 Now that these measures have ended, what are the government proposals for how to hold those involved in the fraudulent exploitation of these schemes accountable?

2021:  Developments In Cum-Ex

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Syed Rahman – Rahman Ravelli

The past 12 months have seen matters come to a head on a number of issues in relation to Cum-Ex.

Putting it in the most straightforward of terms, Cum-Ex describes the trading strategies (also known as arbitrage) that were used to obtain dividend withholding tax refunds on dividend payments. Shares were traded rapidly with (“cum”) and without (“ex”) dividend rights, so that the identity of the actual owner was concealed. An agreement would be made to sell a company stock before the dividend was paid out, but it was not delivered until after the dividend had been paid. This enabled both parties to claim tax rebates, even though that tax had only been paid once, at most. Huge volumes of rapid trading between various parties gave the impression of numerous owners, creating large profits from tax rebate claims. Losses to European treasuries attributed to Cum-Ex are, according to the most recent research, estimated to be approximately €150 billion.

But while the use of Cum-Ex was uncovered by German authorities in 2012, investigations have only gathered pace in recent years. And 2021 has been, arguably, the most significant year in terms of those investigations.

Freezing In The Caribbean

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Paul Kennedy and Nienke Lillington - Campbells

There has been more heat than light in the area of freezing injunctions in the British Virgin Islands (the “BVI”), in particular in recent years so it comes as a welcome relief that the Privy Council have cast a cold eye over the law in Broad Idea International Ltd v Convoy Collateral Ltd [2021] UKPC 24 (the “Judgment”). The Judgment is, as recognised by his Lordship Sir Geoffrey Vos, “ground-breaking” (para. 221).

Although the Judgment provides definitive clarity in relation to some points of uncertainty in the BVI not all of the same points arise in relation to other Caribbean jurisdictions, such as the Cayman Islands. Nevertheless, their Lordships’ statement in the Judgment as to the purpose and scope of interim relief will undoubtedly be useful and relied upon for its general statement that the court is able to modify existing practices to provide effective remedies in changing circumstances, and its more specific, purposive, approach to the use of freezing injunctions.

The background to the Judgment is as follows: the claimant (appellant), Convoy Collateral Limited, sought a freezing injunction in the BVI in support of ongoing proceedings in Hong Kong against the defendant (second respondent), Mr Cho. The Hong Kong proceedings were capable of resulting in a judgment for damages equivalent to US$92 million. A freezing injunction was sought against both Broad Idea International Limited (“Broad Idea”) (the first respondent), a BVI company in which Mr Cho held a 50.1% stake, and Mr Cho personally. Whilst Broad Idea was a company incorporated in the BVI, Mr Cho was habitually resident in Hong Kong.

ESG Dominates The Corporate Agenda In 2021

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Tristan Yelland – Grant Thornton

If 2020 was the wake-up call that thrust the ESG movement into mainstream society’s consciousness, then 2021 was the year in which it came to dominate the corporate and regulatory agenda in the UK and much of Europe. This has significantly increased pressures on ESG targets and results, which will inevitably lead to a greater risk of fraud.

Summarily Judging Fraud: Bringing Claims To An Early Close

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Jack Watson – Wilberforce Chambers

The conventional wisdom when faced with a fraud claim is that the claim will not be subject to early termination whether by way of strike out or of summary judgment in the Claimant’s favour. The nature of fraud claims, involving serious factual findings against the Defendant make them generally inappropriate for summary determination. However, a number of decisions over the past year should serve to remind parties that even when faced with a fraud case, summary judgment and strike out are available to both Claimants and Defendants and in the appropriate case where claims or defences are inadequately pleaded or where the evidence is overwhelming, the court will be willing to bring the litigation to an early close.

Under Construction: The Interaction Of Confiscation Orders And Constructive Trusts

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Hannah Fitzwilliam – Kingsley Napley

In the Crown Prosecution Service v Aquila [2021] UKSC 49, the Supreme Court considered whether a company could assert its rights under a constructive trust in the face of confiscation orders obtained by the Crown Prosecution Service (“CPS”) over the proceeds of crime.

The Tax Man Cometh: Virtual Currency Industry Beware

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Valerie Charles and Kyla Curley – Stoneturn

The anonymity offered by the cryptocurrency market may soon be no more, and it may not be long before regulators are knocking at your door. In addition to the DOJ and the SEC, the Joint Chiefs of Global Tax Enforcement (J5) and the Internal Revenue Service (IRS) have made it clear that they are increasingly focused on cryptocurrency entities and efforts to facilitate or enable tax evasion.

Akhmedova V Akhmedov – A Case Study In Dealing With Difficult Defendants

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Anthony Riem and Andrew McLeod – PCB Byrne

In this article, Anthony Riem and Andrew McLeod, Senior Partner and Associate at the London firm of PCB Byrne LLP, review the recent litigation in the judgment of Mrs Justice Knowles in the Family Division of the High Court in Akhmedova v Akhmedov 2021 EWHC 545, [2021] 4 WLR 88 (Fam), and the lessons that can be learned about dealing with a recalcitrant defendant in civil fraud proceedings. Such defendants seek to ignore their obligations to the Court or even actively frustrate the Court’s orders and processes. That type of litigation conduct might be seen in the short term to have benefits, in disrupting or even derailing claims against them. Yet the various powers of the English court to grant interim remedies enable it to interrogate a defendant’s claims and if necessary find other methods to compel a defendant to comply with their obligations. These present not only the ability to counteract a defendants’ efforts to defeat the court’s processes, but the opportunity to convert that litigation conduct into a successful outcome at trial.

2021 Development In Quincecare

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Kit Smith and Justina Stewart

The Supreme Court’s 2019 decision in Singularis1, the first in which a breach of Quincecare duty2 was found, brought about a rejuvenated appetite for a duty that had lain relatively dormant for decades. This year’s cases have further tested the limits and application of the duty.

Trends In Fraud 2021

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Charlotte Pender, Abigail Rushton and Simon Heatley

This year has seen a number of cases in which the courts have had to grapple with novel issues arising in fraud disputes. This article explores three trends to have emerged: (1) limits to the Serious Fraud Office’s (SFO) extraterritorial reach; (2) the interaction between criminal restraint orders (CROs) and worldwide freezing orders (WFOs); and (3) the, perhaps unsurprising, continuing rise in cases involving cryptocurrency and crypto fraud.

60-Seconds With: Richard Foss, Partner, Kingsley Napley

Date: 06/01/2022 Type: 60 seconds with Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Richard Foss

Q: What would you be doing if you weren’t in this profession?

A: My answer to this question has shifted each decade I have spent in the profession. My boyhood dream was to be a Formula 1 motor racing driver. Sadly I had neither the talent nor the funding to be able to achieve that. Nowadays, I could picture myself in the Italian mountains. I’d be in the Sella Ronda, running a small family cycle/ski hotel. In the summer, I would spend my days on a bike guiding guests through spectacular mountain passes and climbs, and during the winter, I would do the same, but on skis.

60-Seconds With: Joana Rego, Partner, Raedas

Date: 06/01/2022 Type: 60 seconds with Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Joana Rego

Q: What would you be doing if you weren’t in this profession?

A: I started my career in international development and would have probably continued on that path had I not come across investigations. At the time, I was also considering applying to the Portuguese Foreign Ministry to pursue a career as a diplomat. But I think I would make a decent child’s party planner. I am creative and visual by nature and have a blast conceptualizing my kids’ ideas for their special day. I also do make a mean margarita so maybe an adjacent tequila bar to my party planning studio could be on the cards.

60-Seconds With: Caroline Greenwell, Partner, Charles Russell Speechlys

Date: 06/01/2022 Type: 60 seconds with Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Caroline Greenwell

Q: What would you be doing if youweren’t in this profession?

A: I am completely obsessed with maps so were I not a lawyer, I think I would have been involvedin cartography in some way. Either that or a weather woman. I’m always hoping for a map related fraud case...but I think I might be waiting for some time!

60-Seconds With: Anthony Riem, Senior Partner, PCB Byrne

Date: 06/01/2022 Type: 60 seconds with Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Anthony Riem

Q: What would you be doing if you weren’t in this profession?

A: In some ways, it would be easier to say what I would not have been. Before becoming a lawyer, I worked in banking and insurance but they did not grab my attention. I think I would either have been a historian as I am fascinated by the past – a good job at my age! – and our continual failure to learn from mistakes that have been repeatedly made during the course of history or, dare I say it, a politician. However, I think any political career would have been short-lived as it appears that strategic thinking and an ability to actually answer questions are traits that do not sit comfortably with being a successful politician.

Avengers Assemble: Fighting Fire With Diversity

Date: 06/01/2022 Type: Articles Community Magazine Topic: FIRE | Insolvency | Civil Fraud | International | Enforcement | Offshore | Asset Recovery |
Author: Richard Clayman – Kingsley Napley

The issue of diversity and inclusion has gained increasing prominence in the media over the course of the last year, spurred on by the outrage felt by many in response to the murders of George Floyd and Sarah Everard, and the myriad accounts of discrimination still experienced in many corners of society. When I explained to my wife that I had proposed to do some extracurricular writing on the subject of diversity she (imperceptibly to outsiders) raised an eyebrow.

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