The architect of the scheme, Neil Bowman, who was employed by HSBC at the time, and Tim Levy, part of Future Capital Partners, the firm that arranged the investments, have been accused of misrepresenting the “design, promotion and operation of the Eclipse Scheme”.
According to Edwin Coe, the law firm handling the lawsuit, some £2bn ($2.6bn, €2.3bn) of capital was invested between 2006 and 2008 in around 30 Eclipse schemes.
However, the law firm’s letter claims, no investments were ever made on Disney’s film rights.
Tax on ‘no income’
The investors (over 400) are now facing tax demands from HM Revenue and Customs (HMRC) on “non-existent tax deferrals” and several are facing bankruptcy as a result.
Edwin Coe claimed the unpaid tax demand is based on an income “which [investors] have not received and which substantially exceeds the amount of their investment in the Eclipse Partnerships”.
The schemes were designed to facilitate “legitimate tax deferral”, not to avoid tax, according to the press release put out by law firm Edwin Coe.
More than one player
Bank of Ireland, NIIB Group, Barclays and Eagle Financial and Leasing Services are also part of the lawsuit as they loaned large sums of money to the Eclipse Partnerships.
“There was a significant mismatch between the proposed trade activities of the Eclipse Partnerships as presented, and the reality of the activities in which the Eclipse Partnerships would in fact be able to engage,” the lawyers letter claimed.
“The banks nevertheless entered into contribution loan arrangements and thereby facilitated or otherwise participated in the design, promotion and operation of the Eclipse scheme by Future (Capital Partners) and HSBC ,which was presented to our clients in order to induce them to invest their own money.
“They were therefore central players in the Eclipse scheme’s operation, and in particular in the circular movement of funds.”
Investors are now claiming damages for the amount of money invested, the loans, interests and fees paid as well as tax paid to HMRC and fees paid to get out of the Eclipse partnership.
International Adviser reached out to HSBC, but the bank declined to comment.