High-Stakes Commercial Litigation

The Challenge

Brad and James, owners of a growing enterprise, found themselves in a “David and Goliath” legal battle. An aggressive, market-leading competitor aiming to eliminate them from the industry launched a personal lawsuit against them for $25 million.

The competitor was funding a “scorched earth” legal strategy, paying top-tier attorneys expensive fees to secure a judgment that would bankrupt Brad and James personally and shutter their business.

The Southpac Strategy

Recognizing the severity of the threat, Southpac established Cook Islands Asset Protection Trusts for both clients. Crucially, these trusts were drafted with a sophisticated “Jones Clause”.

This specialized provision is designed to navigate the delicate line between asset protection and contempt of court.

The Hurdle: The trust placed the assets legally beyond the reach of the US court, meaning the creditor would have to relitigate the case in the Cook Islands to access the funds, which is a massive barrier.
The Safety Valve: When the opponent sought to have Brad and James imprisoned for civil contempt (for failing to repatriate the assets), the “Jones Clause” provided the necessary legal defense to keep them free. It demonstrated that while they could not force the Trustee to act, the structure was not a “willful defiance” of the court in a manner that warranted jail time.

The Result

The “Jones Clause” neutralized the opponent’s ultimate weapon: the threat of imprisonment. Realizing that they could not force a repatriation of assets, and facing the prospect of a futile and expensive legal battle in the Cook Islands, the competitor’s leverage was undermined.

The $25 million claim was settled for $2 million, less than 10% of the original demand. Brad and James retained their business and their personal wealth.