The Purgative Effect Of The Pugachev Judgment

In October 2017 the English High Court handed down a significant judgment in which it found that the assets of five discretionary trusts settled by Russian oligarch, Sergei Pugachev could be used to satisfy claims by Mr Pugachev's creditors.

Background:

Sergei Pugachev was a Russian businessman, and the founder of Mezhprom Bank, which was once Russia's leading private bank. In 2010 Mezhprom Bank collapsed and Mr Pugachev fled Russia for London. The claimants (including the Russian deposit insurance agency ("DIA")), asserted that Mr Pugachev had misappropriated approximately $95m of DIA funding provided to Mezhprom Bank during the global financial crisis of 2007-2008 and settled it on five New Zealand law discretionary trusts into which it could be traced. Mr Pugachev was named as both a discretionary beneficiary and the Protector of each of the five trusts. As Protector, he had extensive reserved powers.