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Liquidating trust and

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Supreme Court, in a case dealing with whether a trustee could abandon estate property under 11 U. Regardless, the increase of chapter 11 liquidation plans will result in the increased use of liquidation trusts. Liquidation trusts typically allow for a larger return than a "fire sale" of the debtor's assets, which are transferred into a trust for the benefit of creditors upon confirmation of a liquidating plan. KCC is not in the business of providing professional or legal advice with respect to this website service and this website service should not be relied on as a substitute for financial, legal or other professional advice.Please review KCC's Terms of Use and Privacy Statement for additional information regarding the data maintained on this website.KCC does not endorse or warrant and is not responsible for any third-party content that may be accessed from this website. On October 4, 2011, CDC Corporation (the “Debtor”) filed a voluntary petition for relief under chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Northern District of Georgia (the “Bankruptcy Court”), Case No. A liquidating plan usually contemplates establishing a liquidation trust, assigning assets and causes of action, and appointing a liquidation trustee. 1989) ("Trustees of an estate in bankruptcy are subject to personal liability for willful violations of fiduciary duties."). To avoid such personal liability, trustees must take the utmost care in their duties, particularly considering the differing causes of action that could accrue. Supreme Court held that under the Internal Revenue Code, a liquidation trustee must "pay the tax due on the income attributable to the corporate debtors' property because [26 U. C.] §6012(b)(3) requires him to make a return as the 'assignee' of the 'property..a corporation.'" Holywell Corp. After confirmation and appointment, the liquidation trustee then serves as the liquidation trust's representative and is responsible for complying with the trust agreement (and confirmation order), liquidating the assets and making distributions to trust beneficiaries. This necessitates a liability policy and/or an indemnity agreement to protect the liquidation trustee from errors and omissions. As a "trustee," a liquidation trustee has potential exposure for numerous liabilities. A chapter 11 orderly liquidation is often the result of a failed reorganization attempt. In fact, debtors often file chapter 11 petitions intending to file and confirm a liquidating plan. Therefore, "[a]s the assignee of 'all' or 'substantially all' of the property of the corporate debtors, the trustee must file the returns that the corporate debtors would have filed had the plan not assigned their property to the trustee." Id.

632 comments

  1. Welcome to the Restructuring Case for CDC Liquidation Trust.

  2. Jan 13, 2012. One possible component of a bankruptcy reorganization or liquidation is a liquidating trust. A company considering a liquidating trust needs to determine whether it will be required to comply with the registration and reporting requirements under the Securities Exchange Act of 1934. Under Section 12g1.

  3. Regardless, the increase of chapter 11 liquidation plans will result in the increased use of liquidation trusts. Liquidation trusts typically allow for a larger return than a "fire sale" of the debtor's assets, which are transferred into a trust for the benefit of creditors upon confirmation of a liquidating plan. A liquidating plan usually.

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