Liquidating trust agreement
Download PDF When "Liquidating Trust" is mentioned, most people associate this with bankruptcy.
In a bankruptcy, a liquidating trust may be formed whereby certain assets are placed in a trust for the benefit of creditors who may have certain claims against those assets.
Alternatively, the liquidating trust can be a backstop for a complete and relatively quick transfer of liquidation responsibilities to a third party trustee when a management team finds itself unable or unwilling to complete the liquidation effectively.
Stockholders in the company become unit holders a/k/a beneficiaries of the trust.
The trust units are not tradable but shares of stock in a company that has dissolved are typically are no longer tradable either.
Our services do not replace lawyers, investment bankers or accountants, but our involvement can make their work more cost effective.
The mechanics of transitioning to a liquidating trust are straightforward, but are not standard fare for these high priced professionals.