Partial Liquidating Trust Agreement

A partial liquidating trust takes place when the Board of Directors of a company approve a certain financial restructuring plan in which the some of the assets of the organization are sold to another organization.

In order to document such process and business transactions a legal document is prepared known as a partial liquidating trust agreement. In such cases the company going for financial restructuring plan establishes a partial liquidating trust. The funds received from the other organization is collected in the trust and then distributed to the creditors on a pro rata basis until the creditors are paid in full.

The details usually required to be mentioned in the agreement are as follows:

• The name of the partial liquidating trust
• The nature of the trust or the purpose of establishing the trust
• The conveyance made  by the organization to the trustee and the process in which it will be made

Partial Liquidating Trust Agreement

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