26 June 2015

Family Trust: van Dam v. Went

Family of Ch’i mineral water founder Adriaan Went gained a High Court order to get information about their late father’s business following allegations the new managers are filling their own pockets reducing potential distributions to them as descendants.
The son and daughter of the late Adriaan Went are beneficiaries of the family trust which now owns the Ch’i mineral water business.  Their father started the business in 1987 bottling and selling flavoured spring water.  He set up the Went family trust in 2002.  Since his death in 2011, the business has been controlled by two trustees: former employee David Paul van Dam and chartered accountant Alan Richard Hall.
The High Court was told Adriaan’s children have tried without success to get detailed information about the business.  In particular, they have expressed concern about the restructuring of Ch’i business assets after their father’s death and the involvement of new general manager, former Frucor executive Ray Nicholls. 
Evidence was given that assets were hived off into separate companies with debts of some four million dollars owing for assets transferred.  Mr Nicholls is entitled to 26 per cent of any increase in the value of the business over and above the four million dollar debt.
The trustees asked for a court ruling on whether they were required to disclose Ch’i financial statements to any beneficiaries. While Adriaan’s children are only discretionary beneficiaries of the family trust, Justice Peters said they were entitled to information necessary to satisfy themselves as to the management of trust assets: in this case any valuations obtained for the selldown of trust assets; details of any agreements with Mr Nicholls; annual financial statements for the various Ch’i business entities and a schedule of the fees paid to trustees.
van Dam v. Went – High Court (26.06.15)

15.073