Liquidating trust definition web for dating
: In bankruptcy proceedings, there are still securities laws considerations.
The structure of liquidating trusts is just one example.
The Staff has generally noted the following characteristics with respect to liquidating trusts being granted no-action relief: While the Staff has granted no-action relief from Exchange Act requirements if the above requirements are met, it has also expressly denied relief in circumstances where the company requesting relief was not current with its required filings under the Exchange Act.
The Staff’s underlying rationale in granting relief to liquidating trusts appears to be two-fold: (1) that compliance with the reporting obligations (including the cost of auditing annual financial statements and preparing and filing quarterly reports) of the Exchange Act would place an unreasonable financial and administrative burden on a liquidating trust and significantly reduce the amount of distributions to be made in respect of the beneficial interests; and (2) as the beneficial interests are not and will not be traded on the open market and the holders of the beneficial interests will receive at least annual financial reports from the trustee of the liquidating trust, there is no need for the general public to receive the type of information regarding the liquidating trust required under Sections 13 and 15(d) of the Exchange Act.
The assets of a running business include its clients and their purchases.
Machinery, equipment, shelving, and communications systems arranged complexly for a purpose are more valuable as a group than taken individually.
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.
Whether it is Hostess Brands—with the future of Twinkies at risk, the prospect of iconic Kodak in the Bankruptcy Court or AMR Corp.’s flight into Chapter 11 reorganization.
Once a decision to liquidate has been reached, the business needs to be closed, employees discharged, and company assets must be secured and inventoried.
In larger operations, the owner will require help in managing the liquidation.
A liquidation tends to be a painful time in business life.
Many liquidations follow months, occasionally years of anxiety and agony as a business gradually fails, and liquidation is painful.