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Formation of the Rashi and Rambam Trusts
On a date that does not appear in the record but was
sometime before the sale of their HouTex stock, the Melniks
decided to enter into the private annuity transaction that Mr.
Pennoni had suggested. At the Melniks’ request, Moshe Taub, an
Israeli citizen, agreed to establish trusts for their benefit.
Mr. Taub had served with Zalman Melnik in the Israeli Army and
was an old and trusted friend of the Melniks.
On a date that does not appear in the record,7 Mr. Taub
executed two trust indentures, dated November 4, 1996, that
established the Rashi and Rambam Trusts and appointed Bermuda
Trust as trustee.8 The initial corpus of each trust consisted of
$10,000.9 The trust indentures provided that Bermuda Trust had
“sole and absolute discretion” to make distributions of any or
all of the trust income or corpus to any one or more of the
beneficiaries.
7The trust indentures are dated Nov. 4, 1996. However, in a
letter to William Maycock, a Bermuda Trust trust manager, dated
Oct. 14, 1996, Mr. Pennoni sent to Mr. Maycock trust indentures
that had already been signed by Mr. Taub.
8Although the trust indentures are dated Nov. 4, 1996, Mr.
Maycock signed the trust indentures on behalf of the trustee
sometime between Nov. 20 and Nov. 22, 1996.
9On Oct. 8, 1996, Mr. Taub’s bank in Israel issued two
$10,000 checks to fund the Rashi and Rambam Trusts. On Oct. 14,
1996, Mr. Pennoni mailed the checks to Mr. Maycock. However, the
checks were not credited to (and presumably not deposited into)
trust accounts until Jan. 23, 1997, although Bermuda Trust, on
Nov. 22, 1996, acknowledged receiving the checks.
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