Philips Trust Corporation: New blow for victims of financial scandal as £14m default revealed

Several major building societies including Leeds, Nottingham and Newcastle introduced customers to unregulated advisers who sold them family trusts linked to properties and investment schemes for their savings which have since become mired in financial complications.

The assets – including £44m worth of invested savings – ultimately ended up in the hands of a firm called Philips Trust Corporation, which collapsed into administration in 2022.

Sign up to The Yorkshire Post business newsletter

Philips Trust had placed the money with four “investment management” companies and administrator Kroll has been attempting to recover cash from the firms as bonds involved reach maturity dates.

A new update by Kroll has revealed that capital recoveries of £15.76m had been contractually due by February 23. However, only £1.17m has been recovered – with £14.59m in default.

Kroll is now pursuing legal action against one of the four firms involved called Berkeley Rutherford, which was loaned £3.7m by Philips Trust. While two bonds worth £100,000 have been repaid in full, nine bonds worth over £3.5m have not been redeemed.

Court proceedings are planned later this month to take over three Berkeley Rutherford entities.

Kroll said of the purpose of the hearings is “to take control of the relevant borrowers, to seek to recover monies owing to PTC and to investigate the conduct of the officers and management of those companies”.

Support The Yorkshire Post’s coverage of this issue by becoming a subscriber

Kroll said also two of the other firms involved – CX Wealth and Float Capital – have issued deferral notices “which they assert enables them to extend the maturity date of each such bond by six months”.

The administrator said while their agreements with Philips Trust did include a provision for deferral notices, “certain conditions” needed to be met to exercise them.

Kroll is now seeking further information from the companies and may consider court action to secure disclosures.

The update said CX Wealth is an unregulated loan provider which had been given £17.5m by Philips Trust. Of £7.5m that had been due by February 2023, only £356,000 has been repaid.

The report said a rephased payment timetable has been proposed by CX Wealth but is “not considered acceptable” to the administrators.

Almost £10m had been invested with Float Capital, another unregulated loan provider.

The report said £3.9m is overdue for payment, £784,200 of which is subject to a deferral payment. Formal demand letters have been issued in regards to money not subject to deferral notices.

A further £13m was given to litigation funder Woodville Consultants, with an initial £562,000 redeemed in full. A further £12.4m is due to be redeemed in April. The report said Woodville is taking legal advice as it considers £3.4m of the amount may not be due then.

The Yorkshire Post attempted to contact all four investment management companies but received no response.