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and thus provide a vehicle through which a more
coordinated investment policy can be administered.
The first major issue which needs to be addressed
and with respect to which hopefully Steve Dinneen can
provide the detailed information from the Wilmington
Trust Company reports from the various trusts is to
make certain that going into a Delaware business trust
does not create a taxable transaction. The critical
thing is to make certain that the creation of the
business trust does not constitute “an investment
company” in the context of the pertinent provisions of
the Internal Revenue Code. * * *
* * * * * * *
Structurally, it would be proposed that you be
named as the initial trustee of the Delaware business
trust with perhaps the Wilmington Trust Company being
the successor trustee, and that the business trust have
perpetual existence which would not be terminated or
revoked by a beneficial owner or other person except in
accordance with the terms of its governing instrument.
In addition, it should provide that death, incapacity,
dissolution, termination or bankruptcy of a beneficial
owner will not result in the termination or dissolution
of the business trust except to the extent as otherwise
provided in the governing instrument of the business
trust.
We would propose that investment decisions would
be those recommended by you, subject to review by the
Wilmington Trust Company, and that your view would
control based on the terms of the various trusts which
would become participants.
In the event of termination of one of the trusts
investing in the Delaware business trust occurs, then
the assets which would be distributed to the persons
entitled to the beneficial [sic] would be interests in
the Delaware business trust which would continue in
existence as noted above.
The issue raised in the March 6 Wilmington Trust
Company memo pertaining to separate sections of the
Delaware business trust so that certain trusts are not
subject to a share of the capital gains generated by
other sales is of concern because it appears that that
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