‘Momentous' Decisions In Dividing Trust Assets

In a Q&A for LexisNexis, Karen Le Cras, Richard Field and Paula Fry examine the background to the matter of the LKM Discretionary Trust and its potential impact.

What is the background to the case?

The trustee of the LKM Discretionary Trust was asked to make a substantial distribution from trust assets to enable a beneficiary to satisfy the terms of a deferred prosecution agreement (DPA) and a settlement agreement. The beneficiary had negotiated these agreements with foreign authorities in order to resolve proceedings and investigations brought against him.

The claims against the beneficiary involved alleged fraudulent misrepresentations and omissions in respect of certain investments, leading investors to claim damages against the beneficiary and others. Further, the authorities in the relevant jurisdiction investigated and brought criminal proceedings against the beneficiary and others, which meant that the beneficiary was subject to an arrest warrant and faced