Jupiter and New Star settle trust dispute

Jupiter International and New Star Asset Management finally settled their long-running dispute over the management of a key investment trust yesterday just three days before the matter was due to come to court.

The settlement ends the last remaining legal issue between the two sides which have been at war for two years since John Duffield won a case for wrongful dismissal from Jupiter and went on to set up his own firm, New Star. It also removes a potential obstacle in Mr Duffield's attempts to buy back Jupiter from Commerzbank.

In yesterday's agreement Jupiter will pay the costs associated with reconstructing the trust, estimated at £400,000 to £450,000. Jupiter was also ordered to pay a substantial amount towards Mr Duffield's legal costs of the claim brought against him. The legal action, brought by Jupiter, had been set for the High Court on Monday.

Commenting on the decision, Mr Duffield said: "I am delighted that Jupiter have finally accepted a reconstruction [of the trust]. I hope both sides can now look to the future."

In a sideways reference to his bid for Jupiter he added: "I have many friends at Jupiter and I wish them all well at what must be a difficult time, with the result of Commerzbank's sale process still uncertain."

The dispute involved the management of an investment trust set up to manage a fund belonging to Jupiter's staff. When Mr Duffield left Jupiter to set up New Star a number of staff went with him. Management of the trust was transferred to New Star but some members wanted to split the trust so that part of its assets would be managed by Jupiter.

Under the proposed reconstruction, shareholders will be able to transfer all or part of their investments in the trust to a unit trust managed by Jupiter.

Mr Duffield, who once described his former German employers as Nazis, wrote to Commerzbank last week saying he was willing to top any other offers for Jupiter by £100m. His offer was rejected.