In November 2010 a Moscow court declared Mezhprombank insolvent and Russian authorities later began a criminal investigation into the bank.
Three days later, in January 2011, Pugachev fled the country and settled in London, although it is believed he is now in France, in breach of English court orders.
Mezhprombank's court-appointed liquidators, the Russian State Corporation Deposit Insurance Agency, have alleged Pugachev carried out a scheme designed to extract money from the bank after it received recapitalisation loans from the Russian central bank.
In April the liquidators got a US$1.5 billion ($2.23 million) judgment in Moscow against Pugachev, who has since bought a €11 billion ($19.5 billion) lawsuit against the Russian state claiming it unlawfully seized his assets without compensation.
Pugachev denies the allegations against him and has fought a worldwide freezing order placed over his assets last year by a UK court. When he disclosed details of US$70 million ($110.3 million) of assets to the liquidators to comply with this freezing order, Pugachev revealed he was a beneficiary of five New Zealand-based trusts.
The trustees of these entities, before July 24, were Kiwi firms directed by Auckland lawyers Bill Patterson and Robyn Hopkins.
But documents apparently signed in July by Pugachev in the French city of Nice purported to remove those trustees and replace them with four other local companies.
These are all directed by Auckland lawyer Ben Lenihan, Pugachev's longtime associate Natalia Dozortseva and a London-based man, Willem Smit.
Local trustees concerned
The original trustees applied to the New Zealand courts seeking directions on whether they were validly removed and if so, whether trust assets can be transferred to their replacements without breaching the worldwide freezing order.
Justice Paul Heath's decision on the matter, released publicly this week, reveals that Patterson and Hopkins wished to take a cautious approach to the administration of trust assets in case any criticisms were made about their performance.
The pair felt that Dozortseva, who was also a director of the original trustees, was not assisting them to obtain information from Pugachev or his son Victor.
They formed the conclusion that Dozortseva had stopped to act properly as a director of the trustees and was working in the interests of Pugachev to the detriment of the trusts' beneficiaries as a whole.
They then removed her from the original trustees in mid-July.
Documents signed a week later by Pugachev and his son removed, in turn, the Hopkins and Patterson-directed firms from the New Zealand trusts.
'Unwarranted and impulsive course of action'
Pugachev, according to the judge, saw Dozortseva's removal as an "unwarranted and impulsive course of action" by Patterson and as a result he had lost confidence in the lawyer's ability to act appropriately as a director of the original trustees.
Justice Heath said exercising the power to removal trustees and appoint others, in circumstances where there has been a lost of trust and confidence in those responsible for directing the original trustees, cannot be regarded as having been done for an improper purposes.
There was no reason to suggest, based on the uncontested evidence of Pugachev and his son, that the power to remove the original trustees was exercised improperly, the judge said.
"As a result, I am prepared to make directions that the original trustees have been validly removed," Justice Heath said.
The judge said the original trustees shall transfer assets to their replacements once London courts had made an order varying freezing orders to allow that to happen.
Since August, the New Zealand trusts have been caught by the worldwide freezing orders when the UK Court of Appeal's Lord Justice David Bean said "a good arguable case that the assets held by the trusts are in reality assets of, or under the control of, Mr Pugachev".
Justice Heath, in his decision, also said the original trustees were to recover costs for the application from funds held in UK bank accounts.
