Liquidating trust definition Sexy free cams
However, if the liquidation is unreasonably prolonged or if the liquidation purpose becomes so obscured by business activities that the declared purpose of liquidation can be said to be lost or abandoned, the status of the organization will no longer be that of a liquidating trust.Bondholders' protective committees, voting trusts, and other agencies formed to protect the interests of security holders during insolvency, bankruptcy, or corporate reorganization proceedings are analogous to liquidating trusts but if subsequently utilized to further the control or profitable operation of a going business on a permanent continuing basis, they will lose their classification as trusts for purposes of the Internal Revenue Code.The multiple classes of ownership interests are designed to permit investors, by transferring one of the certificates and retaining the other, to fulfill their varying investment objectives of seeking primarily either dividend income or capital appreciation from the stock held by the trust.Given that the trust serves to create investment interests with respect to the stock held by the trust that differ significantly from direct investment in such stock, the trust is not formed to facilitate direct investment in the assets of the trust.The means of fulfilling this broad purpose are the disposition of assets, prosecution of claims on behalf of the estate, resolution of claims and making distributions to beneficiaries.
Corporation M is the originator of a portfolio of residential mortgages and transfers the mortgages to a bank under a trust agreement.
In such circumstances, the existence of multiple classes of ownership interests is incidental to the trust's purpose of facilitating direct investment in the assets of the trust. A promoter forms a trust in which shareholders of a publicly traded corporation can deposit their stock.
For each share of stock deposited with the trust, the participant receives two certificates that are initially attached, but may be separated and traded independently of each other.
At the same time, the trustee delivers to N certificates evidencing interests in the bonds. Each certificate represents the right to receive a particular payment with respect to a specific bond.
Under section 1286, stripped coupons and stripped bonds are treated as separate bonds for federal income tax purposes.