Family trust resolves dispute with BCB
A bid by a family trust to sue the Bermuda Commercial Bank over a $7 million fund has been resolved, the bank said yesterday.
The case against the bank and BCB Paragon Trust, and former trust and corporate services division leader Neil de ste Croix, was also dismissed by two US courts because neither had jurisdiction over the claim by the LVAR Trust.
The LVAR Trust, which is based in Bermuda, but understood to be operated on behalf of family from the US, alleged that assets had been “concentrated in high-risk and speculative investment funds” and that “virtually all of the $7 million in trust fund assets had been dissipated”.
The claim also alleged that the family had been unaware of the high-risk nature of investments “which were completely unsuitable for the trust fund and incompatible with its conservative investment objective of principal preservation”.
A statement from BCB said: “Subsequent to the dismissal of LVAR LP's complaint in the US courts, LVAR LP now confirms that it has unreservedly withdrawn all allegations of wrongdoing of whatsoever nature made in the US complaint or otherwise against the BCB defendants and Mr de ste Croix concerning the administration of the LVAR Trust.”
The 2013 claim was filed originally in the US District Court for the Southern District of New York, which ruled that any case should be heard in Bermuda.
That judgment was later upheld on appeal to the United States Appeals Court for the Second District.
The beneficiaries of the trust were described in the original court papers as “senior citizen members of the same family and dependant on the distributions from the trust fund to cover their living expenses”.
The action also cited other defendants, named as Peat, Peat Finanz, Chesed and PROFCO, all said in court papers to be investment advisers.