Uber-wealthy Russians don't just have the Ukraine war to contend with. A fight brews in Swiss courts over the Burlakov inheritance.

The Leo Trust name is more than well known in Swiss legal circles. It keeps a bevy of lawyers busy with providing fiduciary and financial services for a coterie of ultra-high net worth clients. It has also played a central role in the contentious divorce proceedings of Russian oligarch Oleg Leonidovich Burlakov. The whole thing has unraveled into this veritable War of the Roses that the boulevard press has followed closely.

It is an extremely complex case with constantly changing sides. But a key part of it are accusations that Burlakov was trying to hide his assets in order to avoid paying out his wife. 

Several Billion Dollars

The overall situation for the uber-wealthy in Russia has become distinctly murky since the invasion of Ukraine. Russian assets to the tune of $5.75 billion U.S. dollars have been frozen, as indicated yesterday. Even those who are not directly affected by the sanctions are no longer allowed to deposit more then 100,000 Swiss francs at a domestic bank. Potential clients that advisors use to veritably fawn over are now looked on with distrust.

But Burlakov, who became rich from the oil business, will not see any of this. He died last June as a result of COVID-19. Since then, the divorce has grown into an internationally contested inheritance battle. It has not become any less complex or bitter. If anything, it has gotten worse in that that the stakes have become considerably higher.

When it was just about divorce, about $1 billion dollars was being contested. Now it is $3 billion, with the demands now including internationally held assets, including the «Black Pearl», the deceased oligarch's yacht (image above).

Ex-Wife, Lover and Advisor

The legal proceedings have mainly taken place in Monaco although they have also been held in Switzerland. On one side is the ex-wife, and her two daughters, both of whom were fathered by Burlakov. She is Ukrainian and the two children are, according to a will, inheritors of the oligarch's fortune under Canadian law.

But there is another daughter that Burlakov had with a girlfriend. She was once the trigger for the divorce itself, but now she appears to be fully supportive of the ex-wife's steps.

The girlfriend is also ostensibly being helped by the chairman of Leo Trust, a long-tenured advisor and asset manager of Burlakov. He has also been reportedly distinctly at odds with his ex-wife in 2020. But he has never responded to the many questions directed at him.

Controversial Documents

On the other hand, Burlakov's sister and brother-in-law are also claiming the inheritance. According to them, they have a hand-written will that confirms them as the sole inheritors. Burlakov has known him from his earliest days in the commodities and construction materials business. The pair now live in Monaco.

They are contesting the documents that the former Leo Trust chairman allegedly gave to Burlakov's ex-wife. A provisional injunction was issued against him, although that was recently rejected by the Cantonal Court of Zug. That was because the documents had previously been handed over and an injunction could no longer change that. The couple is still potentially weighing legal steps against the former chairman and his company, according to the indications of some.

Edelweiss Ownership

The ex-wife is also not standing still. She asked for Burlakov's will to be sealed last July at the Zurich District Court. That includes the assets of the Edelweiss Investments entity. It is a structure that Leo Trust originally engendered. Apparently, that has resulted in assets being blocked at one of the major Swiss banks at the same time that a Geneva-based private bank was seemingly engaged in financial transfers for the sister and the brother-in-law.

The party of the ex-wife is claiming fraud and asking for the assets from the inheritance to be appropriated. Ostensibly, that has led to criminal proceedings in a number of countries.

The fight is keeping several legal firms busy in Switzerland alone and it looks like quite a few lawyers are going to be kept busy with all of this for quite some time.