Royal Court rules against a near $2bn claim from liquidators in largest-ever court case

The US private equity firm Carlyle and seven senior employees, including co-founder Bill Conway, were being sued by liquidators to Carlyle Capital Corporation, a separate fund that was set up in 2007 to invest in mortgage-backed bonds.

CCC was based in Guernsey and listed in Amsterdam. It borrowed heavily to buy bonds, and when the financial crisis hit in 2007 investors lost nearly $1bn.

A six-month trial conducted in 2016 finally ended this morning when Lt-Bailiff Hazel Marshall summarised a 500-page judgment into just a few words at a Royal Court hearing attended by advocates for both sides.

The claim was brought by CCC’s liquidators against the executive directors of Carlyle Capital Corporation and its independent directors, investment manager and promoters.

Each of the 187 claims made were dismissed by the court, including allegations of breaches of fiduciary duty, gross negligence, wrongful trading, misfeasance and breaches of contract which, the liquidators had argued, led to CCC’s liquidation following a withdrawal of funding by its lending banks.

Mrs Marshall ruled that the directors had acted properly at all times and said that the liquidators failed to show that selling off CCC's assets in the autumn of 2007 – which they argued the company should have done – would have produced any better outcome for fund and investors.

The court briefly discussed costs this morning and set a hearing date for costs at the end of October.