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Friday, January 14, 2011

Top Model Elle Macpherson wins a landmark case against collapsed Kaupthing

Top Supermodel Elle The Body Macpherson has advanced a "landmark" ruling versus the Isle of Man branch of a fallen Icelandic bank, that she had trusted with her mortgage and more of her savings, it came forth today.

Before Kaupthing's collapse, model Macpherson  took out a mortgage with the Isle of Man arm of the bank's UK division, Kaupthing Singer & Friedlander. Keen to protect her privacy, she had set up an Isle of Man-registered "nominee" company in 2006 so she could buy the house in London while keeping her address secret. She also put some of her personal cash into the bank.

Top Model Macpherson  has came forth as one of the highest-profile victims of the death of Kaupthing, Icelands largest bank. The ruling entails the money she had in the bank can be set versus what she owed on her home equity loan.

But in October 2008, catastrophe struck when the Treasury appropriated control of Kaupthing Singer & Friedlander. An estimated 10,000 British depositors owned money tied up in the  Isle of Man branch and access to their cash was removed.

When she chose to sell the house in September 2009, Macpherson, 47, tried to offset the amount of money she had personally lodged against the money her company still owed on the mortgage. But the bank rejected her request because the borrower was not an individual but actually a company possessed by her,

City law business firm Speechly Bircham adopted the liquidators of Kaupthing Singer & Friedlander to the Isle of Man high court. The law firm won the legal struggle on the basis of English case law and a legal rationale that had not been used with success in this way on behalf of a claimant since the 1870s, said a spokesman for the company. The judge decreed that Macpherson and her company were in effect one and the equal.

Charles Gothard, Speechly Bircham's head ofl tax and trusts, said it was dear and nerve-racking to go to court against major institutions.

Remarking on the ruling, Macpherson said: "The team at Speechly Bircham, John McDonnell QC and local counsel Moroneys all worked hard to argue complex and ancient equitable principles in the context of modern law. I am  grateful for the tenacity and commitment of counsel, and the brilliant team at Speechlys who gave clear insight and was able to establish a robust defence in this difficult case. I am extremely pleased with the ruling."

"We hope this verdict will throw a lifeline to a lot of people caught up in complex battles with insolvent banks and lenders," he added. "At a time when bank insolvencies are on the rise, we are grateful we have been able to shed new light on this and show individuals they have more options than they may have thought."

Gothard articulates the supermodel's case "highlights the importance of looking beyond statutory and dry legal rights, to the intentions and equities that underpin relationships with banks, particularly where there are complicated connections between lenders, individuals and the companies they control".

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