Rameau A. and Phyllis A. Johnson - Page 62

                                               - 62 -                                                 

                  The Administrator possesses no such discretion over the                             
            payment of claims.  Under the trust arrangement, the Escrow                               
            Trustees are obligated to release reserves upon receipt of any                            
            claim meeting specified conditions.  As fiduciaries, they are                             
            required by law to administer the PLRF in accordance with its                             
            stated purpose to fund the Dealerships' obligations under the                             
            VSC's.  The Administrator's own rights to trust income are                                
            similarly fixed by the terms of the trust.  The Administrator has                         
            no power to withhold consent to a payment from the PLRF for a                             
            Dealership's benefit in order to appropriate those funds for its                          
            own benefit.  The authorization requirement must therefore be                             
            intended only to ensure orderly administration of the trust.  To                          
            the extent that the Administrator Agreement does confer                                   
            discretionary authority upon the Administrator, it is not                                 
            authority to determine the use of trust assets but an authority                           
            limited to procedural matters incidental to the use of trust                              
            assets to satisfy the Dealerships' obligations.                                           
                  In spite of having an interest adverse to the use of trust                          
            income for the Dealerships' benefit, the Administrator is not an                          
            adverse party.  Cf. In re Sonner, 53 Bankr. 859, 61 AFTR 2d 88-                           
            755, 85-2 USTC par. 9810 (Bankr. E.D. Va. 1985).  Accordingly,                            
            pursuant to sections 671 and 677(a), the Dealerships are each                             
            treated as owning an allocable portion of the PLRF and must                               







Page:  Previous  52  53  54  55  56  57  58  59  60  61  62  63  64  65  66  67  68  69  70  71  Next

Last modified: May 25, 2011