Prince and Partners was trustee for finance company Viaduct Capital Limited, which went into receivership in 2010. We believed Prince and Partners failed to carry out its role as a supervisor with the care, diligence and skill expected. Prince and Partners admitted a series of failings in its role as trustee.
In taking these proceedings, the FMA brought a case under Section 34 of the FMA Act for the first time. This is a significant power, in that it allows the FMA to ‘stand in the shoes’ of another person’s right to take action against a third party.
Hearing on 21st and judgment on 25th August approving the terms of settlement between the Financial Markets Authority and Prince & Partners Trustee Co Ltd. Civil proceedings brought by the FMA under Section 34 of the FMA Act were settled for $4.5 million. See media release.
More details on this Settlement Agreement.
The parties reached a settlement and subsequently notified the Court. The scheduled five-week hearing was vacated.
The Financial Markets Authority (FMA) has filed civil proceedings against Prince and Partners Trustee Company Limited (Prince), using the powers of section 34 of the Financial Markets Authority Act.
Viaduct collapsed in 2009. FMA alleges that Prince breached the obligations it owed to Viaduct investors and to the Treasury (the Crown) under the Retail Deposit Crown Guarantee. See media release.