Jersey courts start trawl of bankrupt tycoon's web of trusts

Lawyers and financiers yesterday began picking their way through a complex network of offshore trusts to establish the value of the remaining assets held by Kevin Leech, the bankrupt property and leisure tycoon.

Mr Leech based himself on the low-tax, low-disclosure island of Jersey and is believed to have tied up much of his wealth in trusts managed by a local company, Abacus.

Many on the island expressed shock that a man who had made such ostentatious displays of his wealth – including ownership of property, yachts and aircraft to take him to see his beloved Manchester United play at Old Trafford – could be reduced to the status of a bankrupt.

After rising to 17th place in the Sunday Times Rich List, with a mainly paper fortune of £1.2bn, he was brought down by a debt to HSBC of just £22m. The bank successfully petitioned Jersey's Royal Court to have the tycoon declared en désastre, the local form of personal bankruptcy.

Mr Leech's empire at one time stretched from Land's End to John O'Groats, taking in the tourist sites at both locations and including hotels, caravan parks and other leisure investments. While it is believed most of the property was held through Jersey-based trusts, it is not clear how much has been sold.

Sources said HSBC had agreed a number of schemes of arrangement for debt repayments with Mr Leech in the past 12 months, but none had ultimately proved workable.

It was becoming clear yesterday that many of Mr Leech's interests had been paid for using loans secured on other assets, including the dwindling share prices of his pharmaceutical and dot.com companies.

Last year he reached an out-of-court settlement in a dispute over the terms of a loan he took out on allegedly favourable terms from a company he controlled, called Milner Laboratories. Milner is the biggest shareholder in ML Laboratories, the London-listed cancer company whose chairmanship Mr Leech has been forced to resign.

The tycoon was fêted in Jersey as a working-class boy made good and a man generous with his money. His fortune was built on the sale of his family funeral parlour in Man-chester in 1982.