- 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 mustPage: 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