Background and the establishment of the trusts

Following the collapse of Mezhprom Bank (Bank) in 2010, the Bank and its liquidators pursued Mr Pugachev (Pugachev), the founder of the Bank, for the misappropriation of large sums of money.

Pugachev fled Russia and between 2011 and 2013 established five irrevocable discretionary trusts governed by New Zealand law (which for all relevant purposes is the same as English law). The combined value of the trusts was estimated at USD95m and there is evidence that Pugachev took advice as to how to defend his assets from claims by Russian creditors.

Pursuant to the terms of the trusts (which were substantially the same) Pugachev and his minor children were included as beneficiaries, Pugachev was the Protector and his adult son was the successor Protector.

Extensive powers were conferred on the Protector, including consent powers in relation to the trust period, the distribution of income and capital, investment of the trust fund, the removal of beneficiaries, the variation of the trust instrument and the release and revocation of any powers conferred upon the Trustee. Additionally, the Protector had power to direct the Trustee to sell residential property, to add beneficiaries and to appoint and remove trustees with or without cause.

In the event of a Protector being “Under a Disability”, the definition of which was broad and included, importantly, being under a disability due to “coercion by operation of law”, that Protector would automatically and immediately cease to serve as a Protector.

PDF Version

Share
Twitter LinkedIn Email Save as PDF
More Publications
30 Jul 2021 |

Fighting international fraud

First published in New Law Journal, July 2021. Appleby partners Anthony William and Jared Dann an...

Contributors: Jared Dann, Claire Corkish
20 May 2021 |

The Gender Pay Gap Debate – a response to comments on social media

As a lawyer the majority of articles we write are about a particular case or a legal issue – which...

4 May 2021 |

New Private Investment Funds in Guernsey

In December 2020, the Guernsey Financial Services Commission (Commission) published a consultation p...

Contributors: Oratile Jonas
16 Mar 2021 |

Guernsey Structures - The Cannabis Investment Conundrum

Jurisdictions around the world have adopted different positions in relation to the legality of the c...

12 Mar 2021 |

Material adverse change clauses in light of the Covid-19 pandemic

Experts from each of our key global offices provide jurisdiction specific advice and answer question...

8 Mar 2021 |

Appleby Celebrates International Women’s Day

International Women’s Day is celebrated annually in support of gender equality and equal participa...

23 Feb 2021 |

Fit and Proper in the Channel Islands – A Regulatory Enforcement Update

It is sometimes easy to forget with all that has happened over the last 12 months that there was a w...

27 Jan 2021 |

Levies, registration and all that jazz

Regulatory markets evolve at various speeds and the data protection regime is one example of a marke...

6 Jan 2021 |

Executors navigating the “perfect (company) storm”

Corporate governance has become one of the most hotly debated topics in recent years. Whether it be ...

Contributors: Paula Fry