A millionaire ‘magic circle’ lawyer who sailed the seas on a £17million superyacht is facing bankruptcy after failing to hand a £19 million investment fund back to a Saudi princess.
Former lawyer Ronald Gibbs has been locked in a court fight with the Saudi Royal Family after he agreed to set up and manage the multi-million-pound investment fund for Princess Deema Bint Sultan Bin Abdulaziz Al Saud in 2011.
But over a number of years, the former Linklaters partner sank the money into shares of a boat building company he controlled, a £2.86 million apartment in Montenegro and a £17 million superyacht, which he sailed around.
The Princess and her brother HRH Prince Khaled claim he failed to liquidate the assets and return the princess’ millions after being asked to do so in 2013.
In 2018, they had reached a settlement agreement with the lawyer, obliging him to begin selling the assets and handing back the cash.
Former lawyer Ronald Gibbs could now face bankruptcy after failing to hand over £19 million in investment to Princess Deema Bint Sultan Bin Abdulaziz Al Saud in 2011
The Princess and her brother HRH Prince Khaled claim he failed to liquidate the assets and return the princess’ millions after being asked to do so in 2013
By 2021, however, he had still no liquidated the investments, leading the princess and the brother to sue him – alleging he had breached the duty of his role as investment manager with the princess suing alone for breach of the 2018 agreement.
In the same year, Mr Gibbs was hit by a worldwide freezing order and in May 2022 had summary judgment entered against him in relation to breaching the settlement agreement.
He was ordered to begin the process of selling the assets in the fund, hand a £1.85million interim payment to the princess and to comply with case management orders, including disclosure of evidence relating to the yacht, the company and the apartment, and which ‘third parties’ have an interest in them.
But he failed to pay up, sell the assets or follow the court order for disclosure, instead claiming he was ‘asset rich but cash poor’ and now living ‘hand to mouth’ as an itinerant skipper on other people’s yachts.
Now he has been given just over a month to pay the £1.85million by another judge, or have his defence to the £19million breach of duty claim struck out, an order which he says leaves him facing bankruptcy.
London’s High Court heard that Mr Gibbs was an asset finance lawyer who rose to become a partner at Linklaters, one of the prestigious top five ‘magic circle’ London commercial legal firms.
He agreed to manage the £19million investment pot handed to the princess by her father, former Saudi defence minister Sultan bin Abdulaziz, on his death in 2011.
The money was invested elsewhere including on a £17million customised 40-metre Sunseeker 131 superyacht, named Elysium
The money was ultimately invested in a swish apartment at the Regent Hotel in Porto, Montenegro, superyacht company Silver Arrows Marine Limited and a £17million customised 40-metre Sunseeker 131 superyacht, named Elysium after the abode of the blessed dead, a fictional realm of ideal happiness from Greek mythology.
The company, whose past projects have included collaborating with Mercedes Benz on a unique yacht based on the lines of one of their cars, is controlled by experienced yachtsman Mr Gibbs, who has also taken the helm of Elysium.
But in 2018, a settlement agreement was signed obliging him to liquidate the investment portfolio by selling the assets and pay out to the princess on her investment. However Mr Gibbs failed to do so, the court heard.
Defending his position in the High Court last year, he raised questions as to why he was being asked under the settlement agreement to pay out the funds to Princess Deema’s brother rather than directly to her, claiming her signature on the document may have been ‘forged’ and suggesting that Prince Khaled was trying to ‘intercept monies which had been earmarked’ for the princess.
He also stated that whilst the multimillion-pound assets had been ‘acquired’ using the princess’ money, ‘those assets were not themselves held on trust for HRH Princess Deema’.
Several investors had stakes in the assets, he went on to say, refusing to release details of the other stakeholders, citing confidentially reasons.
‘Mr Gibbs was permitted to make investments and/or allocate notional interests in assets already being used and/or to be used in the future for the personal benefit of Mr Gibbs, his family, or his other investment interests,’ his defence adds.
However he had summary judgment entered against him for breach of the 2018 agreement.
Judge Mark Pelling QC described as ‘fanciful’ Mr Gibbs’ suggestion that the princess’ signature was forged, adding there was no ‘positive evidence’ to support this.
Princess Deema’s evidence was that she signed the letter and knew what she was doing. Her solicitor, a partner at Quinn Emanuel, confirmed that her witness statement was prepared without any input from her brother.
Money was also invested in a swish apartment at the Regent Hotel in Porto, Montenegro
Mr Gibbs was ordered to make a £1.86 million interim payment to the princess – now £2.16 million with interest and legal costs added – and to comply with case management orders including disclosure of evidence relating to the yacht, the company and the apartment, and which ‘third parties’ have an interest in them.
He failed to do so however and barrister Simon Atrill for the princess asked Mrs Justice Dias at the High Court to make an order that he be barred from defending the £19million breach of duty claim unless he complies soon.
Mr Atrill told the judge that Mr Gibbs is ‘a rich man’ with ‘a £17m superyacht’ and ‘assets worth £50m’.
‘He has declared assets he says are worth £50m, including £11m in real estate,’ he said.
‘It is therefore a surprising situation that he can’t pay the orders made so far.’
Mr Gibbs had claimed to be ‘asset rich but cash poor,’ said the barrister, but had gone on to claim he had sold shares in a business recently, realising £3.4m.
‘The inference is that Mr Gibbs could pay if he wanted to, but he doesn’t want to,’ said Mr Atrill.
Mr Gibbs, representing himself, however told the judge that he is ‘living hand to mouth’ due to the freezing order imposed on him in 2021 and no longer has control over the yacht or access to the apartment.
‘Mr Atrill is a very good storyteller,’ he told Mrs Justice Dias.
‘I cannot get access to my apartment in Montenegro because I have not been able to pay the service charge.
‘My lifestyle is actually not very good. I’m living and working jumping between boats. I’m living hand to mouth on the cash I can generate.
‘All I have is cash from working as a captain.’
He told the judge the £17m yacht is now under lock and key in a shipyard in Seville, because he has fallen behind in mortgage payments for it.
‘I’m three instalments in arrears on the mortgage on the boat,’ he said.
‘The Guardia in Seville have been contacted and I have been informed will be seizing the boat and seeking a judicial sale.
‘I tried to save the yacht, but I’m afraid it is now irretrievable.’
‘When one of these freezing orders is granted, it destroys someone’s life,’ he continued.
‘My obligation is to liquidate to manage and to try to recoup at least $25m.. My obligation is not to engage in any fire sales. The whole matter has a very different complexion to what they are presenting.
‘The primary claim was based on what I call ‘the big fat lie.’
‘Just because some poor old schmuck of an ex-solicitor is involved, they feel they can come after me all guns blazing.’
Giving judgment, Mrs Justice Dias said: ‘Mr Gibbs submits that the claimant’s version of events is a pack of lies and even goes so far as to accuse counsel and solicitors of telling lies.
‘There is clearly a lot of background to this case and I am not in a position to take a view one way or another.
‘The question of how much these assets are worth is clearly a material matter.
‘I’m sceptical indeed that Mr Gibbs has provided everything he is able to provide.’
She said the information given in relation to the assets so far by Mr Gibbs is ‘wholly inadequate in light of the…orders for disclosure’.
‘I’m quite satisfied that the failure to disclose…and failure to supply a satisfactory witness statement is likely to interfere with the preparations for trial.
‘I order that he be debarred from defending the case unless he complies with the order,’ she said, dubbing his behaviour ‘non-compliance, serious and flagrant’.
‘The defendant claims to be impecunious, (but) it is clear on any case that the defendant has been less than transparent about his assets,’ she continued.
‘He has given evidence about his lack of cash but has provided no satisfactory documentation to support his position,’ the judge said, ordering him to make the £2.16million payment within seven weeks, or be debarred from defending the wider case.
Mr Gibbs was also handed a £90,000 additional bill for the costs of the latest hearing.
Claiming the order would ruin him, he told the judge: ‘These costs are obscene, off the planet and eye watering.
‘What they are doing is tactical. Whether it’s $2.8m or $2m, I can’t get it.
‘I have no option but to declare myself bankrupt and let this run its course. This is warfare against me.’
