Carlyle Prevails Against Claims by Guernsey Liquidators

May 2020

On Monday, May 11, 2020, Williams & Connolly’s client, The Carlyle Group, obtained a final victory in a series of over a dozen cases that have spanned over a decade.

Twelve years ago Williams & Connolly was retained by The Carlyle Group to represent it in connection with the collapse of the Carlyle Capital Corporation ("CCC"), a $23 billion mortgage backed securities fund incorporated in Guernsey that invested almost exclusively in guaranteed government-backed securities. CCC declared insolvency at the peak of the 2008 financial crisis, igniting over a dozen different lawsuits against Carlyle on three continents, including class actions, individual investor suits, and claims by the company’s Liquidators. Carlyle retained Williams & Connolly to represent it in each of these matters. During that time, Carlyle has prevailed in every action filed against it with courts finding that Carlyle acted reasonably and in the best interests of its investors at all times and that the risks inherent in the fund were fully disclosed.

The last of these victories came on May 11, when CCC’s Guernsey Liquidators agreed to walk away from the $2 billion breach of fiduciary claims they filed in July 2010. Under the terms of the deal, the Liquidators dismissed their final appeal to the Privy Council in London, took nothing, and paid Carlyle over $30 million in fees.

The settlement brings to a close an extremely hard fought case. A six-month trial in the Royal Court of Guernsey resulted in the exoneration of Carlyle and the former directors of CCC in a 525-page opinion issued in September 2017. CCC’s Liquidators appealed, but in April of last year, the Court of Appeal of Guernsey affirmed. The Liquidators filed a final appeal with the Privy Council. That case was scheduled to be heard in October 2020 before the Liquidators agreed to walk away and pay Carlyle’s fees.

The team representing Carlyle includes Bob Van Kirk, Hack Wiegmann, Sarah Kirkpatrick, Sarah O’Connor, Luke McCloud, and Yifan Wang, along with Guernsey and UK counsel.

Vault Names Williams & Connolly Most Selective Law Firm and Best Firm for White Collar Defense & Internal Investigations

Vault Names Williams & Connolly Most Selective Law Firm and Best Firm for White Collar Defense & Internal Investigations
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