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On October 30, 1990, United Sovereigns "A Trust" was
formed.4 United Sovereigns' stated purpose was: "To provide for
the administration of the assets by natural or corporate persons
acting in a fiduciary capacity to preserve, conserve, maintain,
invest, and develop the assets for the benefit of the certificate
holders and in a manner designated in this instrument."
The trust document listed Mr. Phelps as the grantor of
United Sovereigns. Mr. Christal was appointed as trustee of
United Sovereigns. Mr. Christal then selected and appointed Ms.
Menon as a United Sovereigns trustee. United Sovereigns'
trustees were to act as "unbiased, independent fiduciaries in the
best interests of the certificate holders, and in strict
conformity with the guidelines and requirements of this trust
instrument." During 1992, Mr. Christal and Ms. Menon were the
trustees of United Sovereigns.
The funds of United Sovereigns, Inc., including its bank
account, were placed into United Sovereigns' checking account.5
Mr. Christal and Ms. Menon were the signatories on United
Sovereigns' checking account.
4 We use the words "trust", "trust document", "trustee",
"grantor", and "form" in our findings of fact for convenience
only. We do not intend our use of these terms to indicate any
conclusion about the substance of the transactions at issue.
5 According to the trust document, the only property placed
into United Sovereigns was "checking and savings accounts". This
appears to be a mistake, which neither of the parties clarifies,
as only one bank account was placed into United Sovereigns.
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