Philips Trust Corporation: Administrators struggle to recover millions in life saving investments

LBS was among several building societies nationally to have previously had a contract with a firm called the Estate Planning Group, whose arms included The Will Writing Company (TWWC) and the Family Trust Corporation (FTC).

LBS had been in a working relationship with TWWC between 2005 and late 2017.

The Will Writing Company arm of the business went into administration in February 2018 but the Family Trust Corporation division continued to trade.

However, LBS members were wrongly told later that year that all trusts had transferred into the ownership of a recently formed company called the Philips Trust Corporation (PTC).

PTC told those signed up to the trusts to pay further money to them to retain them – but the firm then went into administration itself in 2022. PTC had controlled 2,345 trusts with a value of £138m at the time of its collapse.

Administrators have now issued an update on the ongoing attempts to return properties and money to those affected.

Kroll, the administrators, said that PTC had also held £44m that was placed with four investment management companies.

The report said: “The realisation of these investments is subject to the investment management companies fulfilling their contractual obligations to redeem the bonds upon maturity.”

Capital recoveries of £8.2m had been contractually due by the end of December but only £1.1m has been received by Kroll.

Administrators said two of the investment management companies are “significantly in default” and is now in the initial stages of taking legal action to recover money owed.

It comes as more than 340 properties that had been signed over in family trust agreements have now been returned to victims, who have paid fees of £2,400 each to make the recoveries.

Andrea Hindley, from a committee of creditors, said: “Whilst the majority of the houses have been returned to their rightful owners, this has come at significant cost to them.

"However, the investments are a completely different matter. On top of that Kroll the administrators fees are currently £4 million and rising.

"With a further two years of administration left, who knows what their total bill will be? What we do know is they will be paid before any of the clients who have invested their life savings.”

A spokesperson for Kroll said: “The work of the Joint Administrators has so far returned over 346 properties to clients, however it is not a straightforward case.

"The Philips Trust Corporation administration is a wide ranging and long running matter which has necessitated considerable work to be undertaken upfront to reconstruct the Company’s accounting records, enabling the Joint Administration to establish notional client balances.

"All professional fees incurred are subject to the review and approval of the court. The Joint Administrators’ focus continues to be to best protect the interests of both client stakeholders and Company creditors.”

A Leeds Building Society spokesperson said: “Cases like this are very distressing for everyone involved and we’re saddened by the problems encountered.

“Any advice given by The Will Writing Company or Family Trust Corporation was independent of the Society and was not shared with us.

“We have never had a relationship with Philips Trust Corporation or any influence over them but continue to monitor the administration, which is ongoing.”