The High Court of England and Wales (Commercial Court) has handed down judgment in Cedar Mundi (Holding) SAL v Bassel Attieh and others [2026] EWHC 1820 (Comm), setting aside two transactions that purported to transfer a fund's investment portfolio into BVI and Cayman Islands continuation vehicles.
The dispute arose following the 2019 Lebanese financial crisis, where a fund director transferred Cedar Mundi’s portfolio to an entity within the Al Bahar Group (IFA Capital Ltd, BVI) and subsequently executed a Share Purchase Agreement (SPA) transferring the assets to a Cayman Islands exempted limited partnership (Cedar II Fund LP) for US$27 million payable in illiquid Lebanese bank deposits ("Lollars").
Mr Justice Bryan held that both transactions were void for lack of proper corporate authority and executed in breach of fiduciary duty:
- Valuation Integrity & Undervalue: The Court preferred expert valuation evidence demonstrating that payment in "Lollars" represented a fraction of genuine US dollar value, rendering the transfer an improper transaction at a gross undervalue.
- Undisclosed Conflicts of Interest: The director's participation in board decisions while aligned with the buyer, alongside the concealment of key agreements from shareholders, regulators, and auditors, constituted fraud under applicable substantive law.
Key Takeaway for Private Equity Sponsors: GP-led secondary or continuation fund transactions utilizing Cayman or BVI vehicles must maintain strict independent valuation integrity and transparent board disclosure. Unilateral portfolio transfers executed at an undervalue by conflicted directors remain exposed to rescission and clawback claims across common law jurisdictions.
- Source: Read the full trial commentary via Herbert Smith Freehills Banking Litigation Notes: High Court Finds Transfer of Assets to Continuation Fund Void.
UK High Court & Offshore Fund Nexus: PE Continuation Vehicle Asset Transfers Voided (Cedar Mundi)