In international business and asset protection structures, trust and legal clarity are fundamental. When business partners or trustees violate that trust, disputes can rapidly escalate—especially when complex offshore entities, cross-border ownership, and informal arrangements are involved. Below, we outline a theoretical case that highlights a range of legal risks many international clients may encounter.
Misuse of trust and fiduciary duties
A key individual in this case was engaged to manage and structure offshore entities and hold shares on behalf of a successful international entrepreneur. Over time, he took advantage of this position by transferring valuable shares to himself—without the owner’s knowledge or consent. Such actions are not only unethical but legally considered unlawful enrichment and breach of fiduciary duty. These situations often lead to litigation and personal liability for damages.
Disputes over legal vs. beneficial ownership
Many international structures rely on “trust” arrangements, where legal title to assets is held by a trustee, but the true (beneficial) owner remains someone else. While common in Anglo-American jurisdictions, this concept is not formally recognized in all European countries, such as the Netherlands. This creates legal uncertainty and opens the door to disputes about who truly owns the shares—the person on record or the person funding and directing the enterprise.
Broken settlement agreements
Attempts were made to settle the dispute through an agreement requiring the trustee to return control of several companies in exchange for a financial settlement. However, the trustee failed to follow through, prompting further international litigation. In practice, settlement agreements must be carefully drafted and enforceable, with clear remedies in case of non-compliance.
Unauthorized shareholder and board decisions
The trustee, still listed as shareholder, proceeded to issue powers of attorney, replace board members, and vote in shareholder meetings—without informing or seeking consent from the rightful beneficiary. Such acts are clearly unlawful if carried out in breach of a trust deed or other agreements. Unauthorized control of key subsidiaries (including those with significant financial stakes) can cause serious damage to the underlying business.
Liability and recovery of damages
The trustee and his associates were ultimately held liable for significant damages, including the wrongful sale of company shares. This highlights the importance of prompt legal action to recover assets, block unauthorized control, and hold those responsible personally accountable.
Are you facing similar issues?
We assist clients dealing with:
- Misuse of power by trustees or nominees
- Broken trust arrangements or fiduciary breaches
- Shareholder conflicts and boardroom takeovers
- Cross-border asset recovery and enforcement
Our firm is highly experienced in international business disputes, trust litigation, and complex ownership structures across multiple jurisdictions.
If you have any questions about remedies against the breach of a trust agreement, after reading this blog, please feel free to contact our office via telephone number 030 2300 230 or e-mail at: info@amice-advocaten.nl
Amice Advocaten was founded in 2008 and is located in Utrecht, the Netherlands. Amice Advocaten specializes in providing professional legal and consulting services to companies and individuals in the Netherlands, including immigration law, labor law, property law, tenancy law, company law and other civil law areas.