Contests Between Rival Trust Beneficiaries

Extract

Having been promised 15% per annum returns on their investments, hundreds of investors paid a total of over £6m to Mr. Prentis’ firm of solicitors, to be invested in short term, high interest mortgages. The payments were held on trust in a client account pending investment. Only some of the payments received were in fact invested in mortgages. For those that were, the documentation was woefully inadequate; frequently it did not identify which investor's money had been applied towards each mortgage or in what amount. There were substantial shortfalls, both in capital and in income. The Law Society intervened and Mr. Prentis was struck off, preventing the firm from continuing to act as trustee. In Russell-Cooke Trust Co. v. Prentis [2002] EWHC 2227 (Ch), [2003] 2 All E.R. 478 the replacement trustee sought directions as to how it should distribute between the various investors the investments which had been made and the surplus funds remaining in the client account.