KPMG contract row finally settled

KPMG and Equity Trust (Jersey) have reached a settlement in the £1.5m row
over a property contract.

The dispute between the parties made the High Court last week after KPMG had
sued its former client Ironzar Trust, represented by Equity Trust, for being
sidelined from acting as agent for the sale of two shopping centres.

Equity Trust counterclaimed for negligence and a failure to exercise
reasonable care, after another adviser expressed doubt over KPMG’s proposal to
sell the centres through a collective investment scheme.

Accountancy Age understands that KPMG was pleased with the outcome of the
settlement, though no details were available due to confidentiality agreements.

The row had centred on a complex series of property deals that KPMG had
partially advised on several years ago. The hearing had been due to take place
before the St Dunstan’s House Court. It began last week, with both parties
coming to an agreement on the Wednesday.

The firm had provided a feasibility study on the prospective sale of a number
of shopping centres on behalf of Ironzar Trust.

KPMG would serve as selling agent even if the project was aborted, but if
marketed for sale at a later date. When two of the properties were sold –
Queensmere shopping centre and the Observatory shopping centre – another adviser
was appointed.

KPMG had proposed selling the centres through a corporate structure known as
a collective investment scheme (CIS), through which a manager would be appointed
to effect their sales.

The Big Four firm sued for nearly £1.5m for Ironzar’s failure to appoint it a
selling agent.

Equity Trust was unavailable for comment.

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