RE Z III Trust [2019] JRC 069

The Royal Court of Jersey has determined that the preferred course to follow when winding up an insolvent trust is for the existing trustee to apply a formal winding up procedure under the Court's supervision. Key features of this procedure would be (i) a moratorium on legal claims; (ii) the trustee should advertise for claims on the trust assets; and (iii) the trustee should require creditors to prove their claims before distributing the assets.

The Z Trusts litigation

In Husky Int’l Electronics, Inc. v. Ritz, No. 15-145 (U.S. May 16, 2016), a 7-1 majority of the Supreme Court held that a fraudulent conveyance scheme comported with the requirements of “actual fraud” to create a potential new debt dischargeability exception pursuant to section 523(a)(2)(A) of the Bankruptcy Code.