Contempt of Court Cases and Cook Islands Trusts

Cook Islands trusts are often marketed as impenetrable asset-protection tools—but U.S. court records tell a more nuanced story. In this episode, we examine why some settlors have failed when courts ordered repatriation, and what “failure” actually means in practice.

Crucially, these cases are not about creditors directly seizing offshore assets. Instead, they center on personal enforcement: courts compelling settlors to act—and punishing non-compliance through contempt sanctions.

🔎 What You’ll Learn in This Episode:

1️⃣ What “Failure” Really Means

When U.S. courts order repatriation and a settlor does not comply, the typical outcome is contempt of court—including fines or imprisonment—rather than a creditor marching into the Cook Islands to seize assets.

2️⃣ Key U.S. Cases and Why They Matter

We break down landmark cases that shaped judicial thinking:

1. FTC v. Affordable Media, LLC (Anderson case):
2. Settlors served as co-trustees and retained excessive control. The court found them in contempt for failing to repatriate assets; incarceration followed until attempts at compliance were made.
3. Lawrence Trust:
4. The trust was established in anticipation of a specific creditor claim. The settlor’s retained influence (including the power to replace protectors) led to a contempt finding for non-repatriation.
5. SEC v. Solow:
6. Although the settlor claimed lack of control, personal use of trust assets undermined that claim. The court deemed the inability to repatriate self-created and imposed contempt sanctions.
7. Advanced Telecommunication Network, Inc. v. Allen:
8. Assets were transferred after a court had already declared the transaction fraudulent. Failure to repatriate resulted in contempt.
9. Barbee v. Goldstein:
10. The settlor ignored a repatriation order, was jailed for contempt, and ultimately agreed to terminate the trust.

3️⃣ The Common Thread Across Cases

Across these decisions, courts focused on:

• Timing (transfers made after claims arose)

• Retained control or influence

• Inconsistent conduct (using trust assets personally)

When courts conclude that non-compliance is within the settlor’s power, contempt sanctions follow.

4️⃣ The Practical Lesson

Cook Islands trusts do not defeat courts; they shift the battleground. Asset protection fails when:

• The trust is set up too late

• Control is retained in substance

• Compliance obligations are ignored

The risk becomes personal liberty, not offshore seizure.

This episode provides a reality-based assessment of Cook Islands trusts—highlighting why early, compliant planning and genuine loss of control are essential, and why no structure can shield a person from court-ordered compliance.