Baron Hans Heinrich Thyssen-Bornemisza de Kaszon set up a trust fund worth $2.7 billion because his son warned him his fourth wife could try to get her hands on the family fortune.

The baron, who is suing his son for control of the business, said he saw his son's advice as a "red flag'' and moved more quickly to set up the Bermuda-based trust.

This was revealed at the civil court case at the Supreme Court on Friday where the Baron, who is the head of one of Europe's richest families and an internationally renowned art collector, is attempting to wrest power from his son Georg and to dissolve the trust.

The trust's main asset is the Thyssen-Bornemisza Group, an industrial conglomerate that earned $100 million last year.

The baron, in a written statement, said his son had told him that setting up a trust would stop his fourth wife, Brazilian Denise Shorto, from getting her hands on the family business.

The statement read: "He... told me that it would protect TBG from Denise if anything happened to me.

"Georg used the position of Denise as a `red flag', i.e. a reason why a trust needed to be created as fast as possible.

"He said that she could cause trouble for TBG and that he had a real fear that the threat of Denise trying to gain control of TBG would become serious if I died or became seriously ill. I also had those concerns. Denise's brother was not a very nice man.'' Before this the baron's statement tries to establish how fond he had grown of his son. Georg, also known as Heini junior. Heini junior was the product of his first marriage to Maria Teresa de Lippe.

After the couple divorced, Georg, who is now 49, went to live with his mother and was brought up by her.

But during the case, Michael Crystal QC, acting for the baron, has been at pains to emphasise how father and son grew close after Georg joined the family business in 1979.

The baron said: "From about the time Georg started to work at TBG we began to see more of each other and our relationship developed.

"Thereafter, with my encouragement and approval, Georg became more and more involved with the Group. In 1979, he began to attend meetings of the Supervisory Board of TBG even though he was not then a member.

Baron feared fourth wife wanted fortune "He also became Chairman of the Supervisory Board of Bremer Vulkan. I gave him the job of dealing with Bremer Vulkan as a kind of test to see how he would do. I wanted him to advance in TBG and believed that if he could prove himself, I could in time consider him as a successor to myself.'' He added: "By the beginning of the 1980s I had formed the view that Georg was capable and intelligent as well as being both cautious and careful.

"He was not extravagant, if anything quite the reverse; he looked after money well. Furthermore, by this stage the relationship between us appeared to me to be good. I was very fond of him and believed that the feeling was mutual. I had always wanted and expected to be able to develop the kind of relationship with Georg which I had with my father.'' The baron said: "Importantly, it also seemed to me that Georg was the natural person to succeed me and run TBG in the future. He was my eldest son and, therefore, my natural successor.

"In these circumstances, in the early 1980s I came to have complete trust and confidence in Georg. If I asked him to organise something, I believed that he would do it in such a way as would achieve my aims and further my interests.'' There came a time when he wanted to ensure the continuity of the company and stop wrangles about his fortune after his death.

"I did not want to risk damage to TBG after my death as a result of the type of domestic friction between family shareholders which had taken place following my father's death,'' the baron said.

Mr. Crystal told Puisne Judge Denis Mitchell that Heini junior persuaded his father to act as quickly as possible.

Mr. Justice Mitchell said: "I got the impression from my reading that the Thybo Guernsey Trust was created because of the ancillary problems that might arise if there was a divorce. Am I correct?'' Mr. Crystal agreed and said: "It is highly likely, given the state of the relationship between the Baron and Denise as it then was, that this discussion in which Georg uses the position of Denise as a red flag would have been the motivating factor which caused the Baron to say `I want something as fast as possible'.'' The trial continues today.

BUSINESS BUC