Trust helping borrowers in trouble 'unlikely to work'
A LEGAL document that is being used to create a trust so people in trouble with their loans can try and avoid repossession has been dismissed by an expert as unlikely to work.
Up to 2,000 people have signed over property to a mystery Kilkenny-based 'trust' in a bid to side-step banks taking control of their assets.
A copy of the trust document has been seen by the Irish Independent.
Earlier this week people involved with the trust were engaged in a standoff with gardai when they prevented entry to a farm in Co Kildare.
Bank of Scotland secured a €7m judgment order over the farm and there were attempts to sell the property.
Charlie Allen, of the Rodolphus Allen Family Private Trust, told gardai they were trespassing on trust land.
Some €2bn worth of properties are understood to have been signed over to the trust – including homes, farms and businesses – in a bid to put the assets beyond the reach of the banks.
But a leading lawyer who reviewed the trust document for the Irish Independent said it was very unlikely to be effective in preventing assets being seized from creditors.
Solicitor Bill Holohan questioned if the trust arrangement would work in preventing repossessions.
He said much of the document was legal "nonsense".
"If people have liabilities to creditors and if they think that they can avoid those liabilities to creditors by putting property into a trust utilising a document, such as this trust document, then they would be sadly mistaken."
Mr Holohan, who has practised for 30 years and is a notary public, said the courts would take a dim view of attempts to hinder or avoid payment to creditors by using such a trust arrangement.
He said of the trust document: "It looks like a glorious mix of some American-style language, with some European-style language. To be honest, it smacks of a cut-and-paste job from a combination of sources."
Mr Holohan said there was a question mark over how to get property out of the Rodolphus Allen trust.
The operators of the trust are understood to claim that they have spotted a loophole in mortgage documents, and other paperwork, that allows them to put assets beyond the reach of banks.
Financial adviser Karl Deeter warned troubled borrowers to take legal and financial advice before signing up to the scheme.
People who sign up to the trust then lease their properties back from it for a nominal sum, giving them the use of the asset. A charge of €250 is imposed to put assets into the trust, while the trust takes an interest in the portfolio transferred to the trust.
Mr Allen did not reply to queries from this newspaper yesterday.