Liability Of Trustees Research Articles

Pattern of Care for the Bankruptcy Trustee: Is Transplantation to Indonesian Law Possible for SDGs?

Purpose: The centrality of the bankruptcy trustee in bankruptcy cases requires bankruptcy law to maintain and enforce the trustee's standard of care. In the United States, the formulation of this standard at least includes the form of liability, level of violation, and exceptions to the trustee's liability. In Indonesia, this standard does not yet exist, so the legal certainty is still questionable. Indeed, there is general provision in Article 1365 of the Indonesia Civil Code and special provision in Article 72 of the Indonesia Bankruptcy Act 2004, but they are considered ineffective. Efforts are needed to borrow this standard from the United States. The most appropriate way of convergence is to carry out legal transplant. Therefore, this article discusses this standard in the United States, describes the text and legal context in Indonesia, and ultimately reveals transplant with the concept of path dependence. Method: The research conducted is normative legal research, so that discussions are carried out on the legal principles of liability, violations, and exceptions; in addition to discussions on comparative laws that exist in the United States. Given that the focus is only on legal materials (secondary data), the research is purely doctrinal research. With document study all results are collected, which are then subjected to quantitative analysis. Results: Research was conducted on the legal history of bankruptcy, namely the legal system (sources, institutions, and legal procedures) and legal culture (compliance, justice, and dispute resolution). There are indeed similarities in institutions and legal procedures that apply to both countries, although there is differentiation in the sources of law for the application of standard. In addition, there is a fairly high discrepancy between the two countries regarding compliance and justice experienced by the community, in addition to the differences in the main mode of court in the eyes of the community.

Гражданско-правовая ответственность опекунов и попечителей

The relevance of the topic is conditioned by the imperfection of norms on civil liability of guardians and custodians; the doctrine has not developed a coherent idea of contractual and tort liability of guardians and custodians. Judicial practice on disputes on contractual liability of guardians and trustees is contradictory. I. Civil liability of guardians of incapacitated citizens. According to the law, guardians are liable for the transactions of minors and are responsible for the harm caused by them. Judicial practice on contractual disputes concerning the recovery of utility payments for the use of residential premises by minor owners or tenants is contradictory. Courts either deny a claim against a guardian with reference to his/her lack of status as a family member; or claims against guardians are satisfied at the expense of the ward's property, but the guardians are not held liable in the form of penalties for late payment, as they did not enter into a contract with a resource supplying organisation on behalf of the owner. Similar rules are established by law for contractual and tort liability of guardians of adult mental patients who have been recognised as incapable. In disputes on contractual liability, the courts often rule that the debt should be recovered and the guardian should be held liable in the form of penalties. However, the Supreme Court of the Russian Federation in one of the cases rejected the claim precisely because the guardian did not conclude a contract on behalf of the incapacitated person. II. Civil liability of guardians of citizens with incomplete legal capacity. The law defines the subjects of civil liability for the actions of minors aged 14 to 18 depending on the type of such liability: they bear contractual liability on their own; when they cause harm, the trustees are held jointly and severally liable. In the doctrine there is an opinion about shared tort liability of trustees, with which we cannot agree. Adult citizens, limited by the court in their legal capacity, bear independent contractual and tort liability. The doctrine criticises this rule with regard to tort liability. Thus, the Civil Code of the Russian Federation should provide for a mandatory condition common for guardians of any ward, i.e. the conclusion of a contract by them on behalf of the ward. If the contract was concluded prior to the appointment of a guardian or placement of the incapacitated person in organisations performing guardianship functions, the guardians may be liable for the execution of the contract, but only at the expense of the ward's property. The guardian is not liable under such a contract. It seems that the distinction in the legal regulation of the tort liability of guardians is unjustified for persons with limited legal capacity due to mental disorder - when they cause harm, guardians, as well as guardians of minors, should be held subsidiary liable. Subsidiary liability of trustees under the contracts of any wards should not arise.

Is notice for the purpose of Guardian Trust liability really different to notice or knowledge necessary for constructive trusteeship? Quasi Benjamin orders to assist trustees in difficult situations

The Court of Appeal in Finers v Miro1 considered a trust and underlying company structure established by Mr Carlos Miro with the assistance of Mr Melvyn Stein, partner with London solicitors Messrs Finers. The Court of Appeal described the effect of the arrangement to be that all assets were held to the order of Mr Stein on behalf of Mr Miro. Of course, in those days trustees and solicitors were not subject to the same due diligence obligations that exist today. The judgment records that Mr Stein understood the wealth placed into the structure to be derived from Mr Miro’s successful business activities (though there is also a reference to inheritance, but nothing turns on this). After the structure had come about, Mr Stein learned of a report of a sub-committee of the United States House of Representatives, suggesting Mr Miro’s participation in fraud involving an insurance company called Anglo-American Insurance Company (Anglo-American) licenced in Louisiana, United States. Mr Stein became concerned that if this were the case, the wealth placed in the trust derived from Mr Miro’s fraudulent activity, leading to possible adverse claims to that property and, more significantly for Mr Stein and his firm, personal liability based on constructive trust principles (in the event that Mr Stein exercised powers to benefit Mr Miro). Faced with this difficultly, the firm together with Mr Stein and two companies in the structure sought directions on whether those responsible for investigating the affairs of Anglo-American, and recovering assets, should be informed of the existence of the trust structure. The judge directed that they should. Mr Miro appealed unsuccessfully. An issue before the Court of Appeal was whether Mr Stein and his firm in fact faced possible constructive trustee liability from distributions to Mr Miro (without the risk of such liability the supervisory jurisdiction of the court would not be engaged). The Court of Appeal agreed with Mr Stein. Dillon LJ explained: There is no reason to doubt that when Mr Stein set up all these elaborate arrangements for the defendant he honestly believed that all the moneys and assets belonged to the defendant as a result of inheritance and success in business and that the defendant wanted to conceal his wealth from fear of political expropriation. There are, however, now grounds for suspecting that very much of this wealth may have been achieved by the defendant by fraud on the insurance company. The defendant denies that there has been any fraud or dishonesty whatsoever on his part against the insurance company or any one else, but it is conceded, for the purposes of this appeal, that the plaintiffs have grounds for believing that he may have acquired funds from the wrongful misappropriation of assets of the insurance company. The liquidator has started three actions, now consolidated, against the defendant and certain companies in the United States. In none of them is fraud alleged against the defendant. If the liquidator can establish the causes of action pleaded it would not be necessary for him to allege fraud. So far the liquidator has not made, or even suggested that he may have, any claim against any of the plaintiffs. Nonetheless, at any rate if the decision of Millett J. in Agip (Africa) Ltd. v. Jackson [1990] Ch. 265 is correct (as to which I express no opinion either way since these proceedings do not have the right parties for a decision of the point), there is an arguable case by English law that the plaintiffs have constructive notice of the fraud of the defendant if there was fraud and hold their various powers over the ‘property investments moneys and companies’ in question, or some part thereof, on a constructive trust for the liquidator. Furthermore it is arguable, if the judgment of Millett J. is correct, that if Mr. Stein, with the knowledge he has, exercises his powers under the schemes he has set up to transfer any of the property and money in question to the defendant, he may be regarded by an English court as having acted dishonestly so as to render himself, and possibly the firm, personally liable to the liquidator for the amount of the property and moneys transferred to the defendant, or for any loss so occasioned to the liquidator.2

‘You Say Tomatoes’ – avoiding trustee liability for breach of duties of care in English and US style trust deeds

Abstract This article examines exoneration and exculpation provisions in English and US style trust deeds and considers the extent to which the law applicable to these is the same and how it may differ. The question is how far a trustee may go to exclude liability for breach of duty of care and the legal basis for this. It then examines what perhaps should be the initial question, namely, the extent to which a deed of trust can remove such duties so that no trustee liability arises in the first place. The question is the extent to which removal of duties of care is permissible.

퇴직연금운용상 수탁자책임제도의 법적 개선방안

퇴직연금운용상 수탁자책임제도의 법적 개선방안

Succession of Small and Medium Sized Companies Through Business Trust

회사제도의 발달에 따라 쇠퇴하였던 사업신탁 제도가 최근 미국에서 뮤추얼펀드, 자산유동화, 종업원퇴직연금에 있어서 중요한 매개수단으로 등장함에 따라 다시 재조명되고 있다. 우리나라의 경우에도 2011년 개정 신탁법에서 신탁재산에 영업이 포함되고 신탁선언, 유한책임신탁, 수익증권발행신탁, 신탁사채의 발행 등 제도의 개선이 이루어짐에 따라 사업신탁을 활용하기 위한 제도적 여건이 구비되었다고 평가된다. 이 논문은 사업신탁을 중소기업의 경영승계에 활용하는 데 있어서 제기되는 법적 쟁점의 일부를 검토하였다. 사업신탁은 신탁계약을 통해 유연한 지배구조를 선택할 수 있고, 도산격리나 수탁자 및 수익자의 유한책임을 확보할 수 있다. 특히 자기신탁, 유한책임신탁, 수익증권발행신탁 등을 활용하면 다양한 수요에 대응할 수 있을 것이다. 중소기업이 경영승계를 위하여 신설회사를 설립하여 수탁자로 지정한 후, 승계대상회사의 영업을 신설회사로 이전하고 후계자가 신설회사의 대표자로 취임하여 경영수업을 해 나가는 방식을 활용할 수 있을 것이다. 이를 위해서는 사전에 승계대상회사의 채권자나 이해관계자와의 협의가 이루어져야 한다. 중소기업의 경영승계를 위하여 사업신탁을 활용하는 경우 우선 신탁계약의 내용이 신탁의 실질을 구비해야 할 것이다. 즉, 신탁재산이 수탁자에게 이전되어야 하고, 수탁자가 신탁목적에 따라 신탁재산을 관리･처분할 권한 및 의무를 부담하여야 한다. 또한 수익자가 다수인 경우 수익자의 의사결정방법에 대해서도 미리 정해 두는 것이 바람직하다. 신설회사가 사업신탁의 수탁자로서 부담하는 충실의무와 후계자가 신설회사의 대표이사로서 회사법상 부담하는 충실의무 간의 이익충돌이 발생할 우려가 있는데, 이에 대비한 방안을 강구하여야 한다. 신설회사의 정관에 신탁의 인수를 열거하여 이익출동의 발생 가능성을 공시하고 주주의 사전승인을 받아두는 것이 바람직할 것이다. 또한 수익자가 수탁자를 적절하게 감독할 수 없는 경우에는 신탁관리인을 선임하여 활용하여야 한다. 수탁자의 해임사유에 대해서는 해임사유를 한정적으로 열거하여 사업신탁의 안정성을 확보해야 한다. 사업신탁의 설정에 반대하는 승계대상회사의 주주가 있을 경우 반대주주에 대하여 주식매수청구권을 보장하여야 할 것이다. 공동상속인이 있을 때 발생하는 유류분 반환청구에 대해서도 적절한 대응이 필요하다. 사업신탁을 중소기업의 경영승계에 활용하기 위해서는 그 이외에도 조세문제, 고용승계 문제, 회계제도의 정비, 사업신탁에 관한 특별법의 제정 등 다양한 논의가 더 필요할 것이다. 특히 민사신탁의 법률관계를 중심으로 한 신탁법에 근거하여 사업신탁을 설정할 경우 잠재적인 법적 불확실성을 피할 수 없으므로 이러한 문제점을 근본적으로 해결하기 위해서는 사업신탁에 관한 특별법의 제정을 검토할 필요가 있을 것이다.As the business trust becomes a preferred form of organization for mutual funds, asset securitization and employee pension funds in the United States, various usages of it are reviewed under revised Korean Trust Act of 2011. The Korean Trust Act provides institutional framework for business trust by introducing trust declaration, limited liability trust, beneficiary certificate issued trust. This thesis deals with legal issues raised in applying business trust to business succession of small and medium sized companies. The business trust can offer flexible corporate governance through trust agreement, and also isolation from bankruptcy, limited liability of trustees and beneficiaries. Especially, if the business trust is combined with declared trust, limited liability trust, and beneficiary certificate issued trust, it can meet various needs for trusts. Small and medium sized companies can adopt the business trust under which after nominating newly established company as a trustee, business of the target company is transferred to newly established company and the successor manages the company as CEO. In order to establish business trust, the target company must consult with major creditors and interested parties in advance. In utilizing business trust for business succession of small and medium sized companies, the contents of trust agreement must satisfy the substance of trust. Trust property should be transferred to a trustee, the trustee must have the authority and obligation of administration and disposition of trust property. In case of multiple beneficiaries, decision making method has to be prepared in advance. There is a possibility that conflict of interests could occur between a trustee’s duty of loyalty that is required for newly established company and a successor’s duty of loyalty that is required as CEO of the company. In order to solve this problem, it would be desirable that after it discloses the possibility of conflicts of interests by inserting a provision in an article of corporation that the purpose of company business includes undertaking trusts and gets shareholders’ prior approval. In addition, if beneficiaries cannot properly monitor business trust, it needs to elect trust administrator. Requirements for discharging trustee must be stipulated very narrowly and the stability of business trust should be acquired. If there are dissenters in respect to establishing business trust, appraisal rights of dissenters must be provided. It needs to respond properly to legal portion of joint heirs. In addition to issues raised in this article, more various discussions are necessary for taxation, succession of employees, relevant accounting method, and enacting special act regarding business trust. Since it cannot escape potential legal uncertainty in case business trusts are established according to Korean Trust Act which is based on civil trust, it needs to enact special act for business trust in order to solve this problem fundamentally.

Trustee Liability for Breach of Trust in the Common Law World

When is a trustee liable at common law for breach of trust? Equity teaches us that a trustee’s duties are onerous and far-reaching not least because a trustee is bound in law and in conscience to give full effect to the terms of the trust in furtherance of the sole interests of the beneficiary. Liability is strict and is focused on restoring the trust fund when loss is occasioned or stripping the trustee of unauthorised gains made on the back of the fiduciary relationship, even if the beneficiaries have also gained. The quantum of damages (and, indeed, the extent of liability) typically requires some consideration of variables relating to the nature and context of the alleged breach; the form of damage suffered and its causal connection to the occasioned wrong; the involvement or non-involvement of any co-trustees in the transaction in question and their professional status; and the terms of the trust deed governing the trustees’ behaviour. In recent years, judicial consideration has been given to the degree to which it is possible for a trustee to contract out of the fiduciary obligations traditionally associated with a trust without undermining the valuable benefits bestowed by this relationship. Attention has also been focused lately on the courts’ ability to intervene and to undo discretionary decisions taken by trustees which, in hindsight, turn out to have unintended consequences for the beneficiaries concerned.This paper sets the context for traditional trustee liability outlining some of the forms, causes and general measures of liability in Part I, before exploring in Part II the recent UK Supreme Court judgment in Futter v. HMRC and its implications for trustees who, in hindsight regret decisions made. Part III considers the issue of commercial transaction trusts and the options available to corporate trustees to limit or exclude liability, concluding with an assessment of developments in common law jurisdictions outside the UK towards trustee liability, trustee forgiveness and trustee exoneration.

NZ Law Commission--proposal for trust reform

The New Zealand Law Commission, after a long deliberation, has released its proposals for the reform of New Zealand's Trust law. This is not the last word, as submissions were invited to those proposals, and the Commission's final recommendations are expected in the next few weeks. The summary below represents the proposals of the Commission, not its final report or recommendations. 1. ‘Trust’ will become a defined term in the new legislation. The core concepts employed in the definition are the ‘enforcer principle’ of Morice v Bishop of Durham and the ‘three certainties’ outlined in Knight v Knight. 2. Trustee duties will be divided into three categories: The mandatory conduct duties will be: 3. There needs to be some clarity as to the Commission’s proposals concerning the permissible scope of limitation or exemption of trustee liability clauses in trusts. This...

A Critical Review on the Criminal Liability of Trustees who disposed of the Properties under Title Trust arbitrarily - Focused on judicial precedents -

A Critical Review on the Criminal Liability of Trustees who disposed of the Properties under Title Trust arbitrarily - Focused on judicial precedents -

A Study on the Change of Trustee and the Limitation of the New Trustee's Liability (Annotation of Supreme Court Decision 2009Da83797 Delievered on February 25, 2009)

A Study on the Change of Trustee and the Limitation of the New Trustee's Liability (Annotation of Supreme Court Decision 2009Da83797 Delievered on February 25, 2009)

As you like it or measure for measure? Private foundations as an alternative to trusts

The appeal of private foundations lies in their ‘legal personality’ and that they—due to their corporate nature—are less exposed to a ‘sham’ attack than trusts. But, the choice of a private foundation out of such arguments may prove to be deceptive. Private foundations managed under the founder's instructions may sooner or later fall prey to a ‘substantive sham’ argument. However, private foundations may be a valid alternative to trusts wherever the personal nature of the trustee's liability proves to be problematic in the light of structuring requirements, such as in dealings with third parties.

Piercing the veneer of the trust in the South African Trust Law: Liability of trustees of a business trust for fraudulent trading

AbstractThe trust, whichever form it is moulded in, is a useful instrument for estate planning. However, many family businesses nowadays take the form of a business trust without any change in the circumstances surrounding it. This submits the trust to diatribe and suspicion because the protection the trust offers is often exploited. In Land and Agricultural Bank of South Africa v Parker and Others 2005 (2) SA 77 (SCA) it was obiter the court's view that it might be necessary to extend well‐established company law principles also to trusts. The court referred to the Turquand principle and the principle of “piercing the corporate veil”. The motivation is that assets allegedly vesting in the trustees of a trust, in fact belong to one or more of the trustees personally. This view may have obvious and important implications in case of the sequestration of the trustee's estate. It implies that the assets concerned may be used in satisfaction of the trustee's debts because “in fact it belongs to the trustee”. However, it may also be used in satisfaction of debts “to the repayment of which the trustees purported to bind the trust”. Thus, if the trust's estate is sequestrated, the assets may be used in satisfaction of the trust's debts. If the personal estate of the trustee is sequestrated, these assets may be utilized in satisfaction of the trustee's personal debts. Consequently it is relevant to ask the question whether the trustee's personal estate (irrespective of sequestration) would be liable for restitution in favour of the beneficiaries for these actions in breach of trust in competition with the creditors of the trustee. Copyright © 2008 John Wiley & Sons, Ltd.

Taxation of offshore trusts: France

Dispelling the myth that French law does not recognise trusts, this article outlines the basic elements of the French tax system before discussing in detail the tax implications for a French resident settlor on the creation of a trust. Then, taking each key tax in turn, the author concludes with a discussion of beneficiary and trustee liability.

The Jersey approach to excluding trustee liability: a comparison with the Law Commission's proposals

This article considers how Jersey law regards trustee exemption clauses, an important topic in a jurisdiction with a substantial and developed trust industry where most trustees are paid professionals who are regulated by the Island's Financial Services Commission.

Contributory Fault and Breach of Trust

New Zealand and Canadian courts are willing to reduce the liability of a fiduciary for breach of fiduciary duty to take account of the claimant’s contributory fault, whereas English and Australian courts are not. The picture is less clear as regards breaches of trust not involving a breach of fiduciary duty, such as merely careless breaches of trust. English courts have assumed that there is no scope in any case of breach of trust for reducing trustee liability to take account of the beneficiary’s contributory fault, but this paper demonstrates that there is no binding authority to that effect. In the absence of authority the matter falls to be determined as a matter of principle. There are a number of obstacles of principle in the way of apportionment of liability between trustee and beneficiary on the ground of contributory fault. One significant obstacle is the basic difference between the compensatory aim of tortious liability and the traditional aim of trustee liability to reinstate the trust fund by means of the action for account. Another is the exemplary nature of trustee liability, which favours the enforcement of trust obligations even where this might over compensate individual beneficiaries. Significant though these obstacles are, it is demonstrated that they can be overcome in the case of a careless breach by the trustee of a bare trust. In such a case there is no significant difference between the conceptual basis for, and remedies for, negligently caused harm in tort actions and actions for breach of trust. The trustee’s fault-based liability in such a case should therefore be capable of reduction to take account of the beneficiary’s own fault.

Trustee decision making in small UK charities

AbstractManagement theory suggests that increasing the quantity and quality of management information available to key members in organisations will lead to improvements in their decision making. However, judgements as to what counts as ‘management information’, and in what its quality consists may vary according to organisational location, size and purpose. Where those ‘key members’ are volunteers, as with charity trustees, perceptions of management information need, amount and value, may vary further. This paper explores aspects of this theory, with particular reference to trustees of small charities in the United Kingdom. It outlines a research programme drawing on trustees in organisations working for children and for people with disabilities. A range of findings is presented, recording trustee experiences of and responses to management information, as this affects their charities' performance. Following from three in‐depth case studies in small charities, findings show that informal systems are in operation, whereby trustees devolve much of the responsibility for management information to their chief officers, who are then monitored by their chairs. While this system is viewed by participants as an effective and practical means of enabling decision making, certain questions are raised regarding trustee liability and accountability.

Legal alert: Trustee liability under CERCLA

Legal alert: Trustee liability under CERCLA

Trusts of Flawed Assets: The Liability of Trustees

Trusts of Flawed Assets: The Liability of Trustees Get access P B Matthews P B Matthews Withers Solicitors12 Gough Square, London EC4A 3DE Tel: +44 (0) 171 936 1000 Fax: +44 (0) 171 936 2589 DX 160 London/Chancery Lane E-mail: pbm@withers.co.uk Internet: http://www.withers.co.uk Search for other works by this author on: Oxford Academic Google Scholar Trusts & Trustees, Volume 4, Issue 4, March 1998, Pages 6–10, https://doi.org/10.1093/tandt/4.4.6 Published: 01 March 1998

Separable Liabilities of Trustees in Directory Trusts

Separable Liabilities of Trustees in Directory Trusts

Separable Liabilities of Trustees in Directory Trusts

Separable Liabilities of Trustees in Directory Trusts