Liquidating trust form
To many the words “liquidating trust” connote bankruptcy, but that need not always be the case.
The trust units are not tradable but shares of stock in a company that has dissolved are typically are no longer tradable either.
Level of Oversight Does the agreement provide for a committee or other body to be established to oversee the work of the trustee? Is the trustee required to consult with or report to all of the beneficiaries?
Do the beneficiaries have rights to control the trustee’s actions?
Many people consider the liquidating trust agreement to be a boilerplate document requiring nothing more than finding a form used previously and changing the names.
Although this may not always result in disaster, it is nearly certain to result in difficulties down the road — and highly likely to result in objections at plan confirmation.