Case study

Guernsey & Cyprus: Delivering Liquidation Value in a Challenging Geopolitical Landscape

The Client
Two Guernsey-based closed-ended investment funds operating within the financial services sector, both specialising in Russian assets held through Cypriot holding companies.

The Client’s Challenge
Amid heightened geopolitical tensions, the Funds faced increasing operational and strategic pressure. Their Limited Partners sought an urgent yet controlled wind-down of operations to bring all exposure to the region to an end. The Royal Court [of Guernsey] appointed Nexia member firm Leonard Curtis to act as liquidators, with a remit to realise assets located across multiple jurisdictions, repatriate proceeds to Limited Partners, and oversee the complete dissolution of the fund structures.

The Solution
The Liquidators embarked on a complex disposal process, seeking purchasers for holdings in both Cyprus and Russia while ensuring compliance with sanctions regimes in Guernsey, Cyprus, the EU and the US. This was further complicated by counter-sanctions introduced by the Russian government, necessitating additional specialist advice. Despite these challenges – and with the liquidation process still ongoing – the team successfully returned more than €21 million to the Limited Partners, with an additional final distribution of approximately €3.5 million anticipated once the last asset realisations have been completed.

The Nexia Value
The success of the project was significantly enhanced by the collaboration, expertise and on-the-ground support of Nexia Poyiadjis, Nexia’s member firm in Cyprus. Their involvement was pivotal in several areas: providing targeted legal guidance to enable the sale of specific Cypriot shareholdings; steering the Liquidators through the intricacies of Cyprus’s sanctions legislation; and managing communications with local service providers who were unfamiliar with the Liquidators’ role and the Funds’ dissolution status. In addition, they undertook a thorough review of certain zero-value assets, offering clear advice on the legal steps required to formally disclaim ownership.

This collaborative approach ensured a smoother process and mitigated potential delays in a highly complex cross-border liquidation.