Liquidating personal debt
If followed, these guidelines should ensure that the establishment of the trust will be treated as a transfer from the bankruptcy estate to the beneficiaries followed by a deemed transfer by the beneficiaries to the liquidating trust. Finally, a liquidating trust may lose its grantor trust status “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.” 26 CFR § 301.7701-4(d).
Additional considerations include retaining bankruptcy court jurisdiction in the plan and trust agreement so that a liquidating trustee can seek court approval of certain actions and decisions made on behalf of the trust.
An oversight committee is often utilized as well to oversee the liquidating trustee’s certain decisions and actions.
Joint ASIC/AFSA/ARITA liaison meeting ASIC, AFSA and ARITA held their bi-annual liaison meeting on 5 December 2017. The Government has introduced new laws that change the way ASIC is funded.
Regulated entities will receive an invoice for ASIC’s regulatory services delivered in the prior year.
Section 1123(b) (3) of the Bankruptcy Code facilitates the use of a liquidating trust for prompt administration of the estate by providing post-confirmation standing to an appointed representative of the estate to enforce claims and interests.
By establishing a liquidating trust pursuant to section 1123(b)(3) in a confirmed plan of reorganization or liquidation, a debtor can transfer causes of action and other assets to a trust, for future liquidation and distribution to the debtor’s creditors, and avoid delaying plan confirmation.
The degree of specificity required in identifying preserved claims varies from jurisdiction to jurisdiction.