A common structure used by businesses operating in Dubai, Hong
Kong, London or Singapore is to incorporate layers of intermediary
companies in the home country, the Cayman Islands and the British
Virgin Islands and list the offshore ultimate parent entity on a
foreign stock exchange. For creditors of entities in such a
structure, obtaining a judgment is often only a first step in
recovering money, and where payment is not made voluntarily, time
consuming and potentially expensive enforcement proceedings can
become a necessity.
This is complicated further where the beneficiary of a judgment has been the victim of a fraud and assets have been spread across a number of jurisdictions (both offshore and onshore), or placed in structures deliberately designed to make enforcement problematic, including, for example, by making it difficult to identify and value such assets. How to enforce over a fraudster's assets has been the subject of a number of recent cases; which have looked in particular at how the appointment of an equitable receiver may be an effective option to secure recovery.
We summarise here the recent developments in equitable receivership and set out some of the key considerations when contemplating how best to ensure that a judgment can be effectively enforced, particularly where the assets are held by way of shares in offshore companies or through a trust or foundation:
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.