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Security Trustees in Investments: 6 Red Flags to Watch
Investors in schemes like The 79th Group, High Street Group, and Platinum Assets were often told their money was “safe” because a security trustee was in place. But too often, those trustees failed to act, leaving investors exposed.
This episode explains what a security trustee is supposed to do, why they frequently fall short, and the six red flags every loan note holder should know.
What you’ll learn in this episode:
- Why floating charges offer weaker protection than fixed charges.
- How conflicts of interest stop trustees from acting for investors.
- Why trustees in offshore jurisdictions are almost impossible to hold accountable.
- The dangers of silence when defaults occur.
- Why vague deeds and 75% enforcement thresholds make protections unworkable.
- The minimum records a good trustee should keep, including asset schedules and valuations.
Key takeaway
A security trustee should be your shield. But in too many cases, they act more like silent partners to directors. Spotting the warning signs early could mean the difference between protection and loss.
Next steps
If you’re a loan note holder concerned about your trustee arrangements, or you’ve already experienced defaults, you can contact Insolvency & Law’s investigations team at:
[email protected]
020 7504 1300
Disclaimer: Insolvency & Law Ltd is not a firm of solicitors or licensed insolvency practitioners and does not provide legal advice, investment advice, or any regulated services under the Legal Services Act 2007 or the Financial Services and Markets Act 2000. All content published by I&L relating to companies mentioned therein, including blogs and podcasts, is provided free of charge for general information and educational purposes only. Therefore, it must not be relied upon as professional advice.
Where appropriate, I&L may take legal assignment of loan notes issued by companies in its own name, for the purpose of enforcement and recovery. In such cases, I&L bears all associated costs and risks, and the original loan note holder is fully insulated from legal expense and liability.
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By Insolvency & Law
Investors in schemes like The 79th Group, High Street Group, and Platinum Assets were often told their money was “safe” because a security trustee was in place. But too often, those trustees failed to act, leaving investors exposed.
This episode explains what a security trustee is supposed to do, why they frequently fall short, and the six red flags every loan note holder should know.
What you’ll learn in this episode:
- Why floating charges offer weaker protection than fixed charges.
- How conflicts of interest stop trustees from acting for investors.
- Why trustees in offshore jurisdictions are almost impossible to hold accountable.
- The dangers of silence when defaults occur.
- Why vague deeds and 75% enforcement thresholds make protections unworkable.
- The minimum records a good trustee should keep, including asset schedules and valuations.
Key takeaway
A security trustee should be your shield. But in too many cases, they act more like silent partners to directors. Spotting the warning signs early could mean the difference between protection and loss.
Next steps
If you’re a loan note holder concerned about your trustee arrangements, or you’ve already experienced defaults, you can contact Insolvency & Law’s investigations team at:
[email protected]
020 7504 1300
Disclaimer: Insolvency & Law Ltd is not a firm of solicitors or licensed insolvency practitioners and does not provide legal advice, investment advice, or any regulated services under the Legal Services Act 2007 or the Financial Services and Markets Act 2000. All content published by I&L relating to companies mentioned therein, including blogs and podcasts, is provided free of charge for general information and educational purposes only. Therefore, it must not be relied upon as professional advice.
Where appropriate, I&L may take legal assignment of loan notes issued by companies in its own name, for the purpose of enforcement and recovery. In such cases, I&L bears all associated costs and risks, and the original loan note holder is fully insulated from legal expense and liability.