Judgment was handed down from the High Court of Justice of the Isle of Man in IOM FSA v Montpelier (Trust & Corporate) Services
Reference: CHP 20/0005
Date: 15 June 2023
Court: High Court
Facts: Judgment was handed down on 15 June 2023 from the High Court of Justice of the Isle of Man in CHP 20/0005 – IOM FSA v Montpelier (Trust & Corporate) Services.
Mark Hubbard (holding a Temporary Advocate’s Licence) and Advocate Damian Molyneux of M&P Legal represented the Joint Liquidators, Dennis McGurgan and Michael Saville of Grant Thornton. The Joint Liquidators also instruct James Saunders, JJ Liew and Millie Rai in connection with other aspects of this complex and multifaceted liquidation.
Practice Area: Insolvency, Offshore
Summary
In April 2020 Montpelier (Trust and Corporate) Services Ltd was wound up on public interest grounds in the Isle of Man on the application the Isle of Man Financial Services Authority. At the time of its liquidation Montpelier was a major offshore trust and corporate services provider and acted directly as trustee of well over 1000 trusts.
In December 2022, after a 4 day contested hearing, the Isle of Man High Court made orders on the application of the Joint Liquidators of Montpelier approving their novel proposed mechanism for the transfer by the Court of hundreds of those trusteeships en bloc from Montpelier to another Isle of Man trust company, Hillberry Trust Company Limited.
The Court also held (despite Hillberry’s determined resistance) that an agreement for the sale of Montpelier’s business to Hillberry was void as, among other things, a disposition taking effect after the commencement of the company’s winding up and that it should not be validated. The orders made reflected proposals made by the Joint Liquidators, supported by Montpelier’s court appointed Receiver & Manager and the Isle of Man Financial Services Authority.
The Court was persuaded to act in a way which was both pragmatic and creative and took account of the wider public interest, in an effort to resolve an otherwise intractable situation.
On 15 June 2023 the Court handed down judgment, giving reasons for the December orders and ordering indemnity costs against Hillberry. The Court was highly critical of parties who it held had opposed the Joint Liquidators’ proposals unreasonably and had been guilty of serious litigation misconduct throughout the application.
