Liquidating trust interests
For example, for a small biotech with drug development programs out licensed to third parties, the liquidating trust can be a cost effective way to collect milestones and royalties for a period of time while open issues are resolved and a transaction can be closed to monetize the licensor interest.In the role of liquidating trustee, (beginning before the trust is formed) we administer and manage the liquidating trust to sell remaining assets, settle open contracts, pay creditors and distribute any available funds to the company’s former stockholders. On the contrary, we prefer to be retained early enough in the wind down process to avoid insolvency and transition smoothly from the public entity to the liquidating trust structure.
• Provide a vehicle to wrap up loose ends when lower value or less liquid assets remain. 101, can qualify as sale or exchange of shares for Federal Income Tax purposes allowing stockholders to recognize loss to the extent the cost basis of their shares exceeds the per share value of assets transferred to the liquidating trust.In 2005, shareholders approved the liquidation and dissolution of REMEC, its debtor affiliates (“Plan”) became effective and their assets were transferred to the HERO Liquidating Trust.The Securities and Exchange Commission has allowed a fund to establish a trust solely for the purpose of liquidating the investment interests of its partners and retain its exemption from the Investment Company Act.In fact, a liquidating trust can be a cost effective, simplified structure to wind down a solvent company and realize some value for stockholders.In the context of a managed liquidation it can be particularly effective as the final stage of a well planned wind down process. 17, 2017 (GLOBE NEWSWIRE) -- Winthrop Realty Liquidating Trust (the "Trust") announced today the Trust's trustees have approved a liquidating distribution of $0.60 per common beneficial unit in the Trust payable in cash on August 29, 2017 to holders of record on August 22, 2017.
As the Trust is treated as a partnership for tax purposes, the withholding agent for foreign investors is required to make quarterly withholding payments to the IRS based on the Trust's "effectively connected income." The Trust estimates that for 2017 effectively connected income will be approximately $0.29 per share.
After satisfying the debt encumbering this property and all closing costs and pro rations associated with the sale, the Trust received its preferred return of approximately $5.8 million from the sale.
About Winthrop Realty Liquidating Trust Winthrop Realty Liquidating Trust was formed to continue the liquidation process of remaining assets held by Winthrop Realty Trust at August 5, 2016.
A liquidating trust may be appropriate for a biotech or drug development company if: • Continuing research and development activities is not financeable or otherwise not in the stockholders’ best interests; • The company is solvent on both balance sheet and liquidity bases: with sufficient liquidity to settle contracts, real estate leases and severance; and • The Board and management begin the wind down process early enough to assure an orderly process and maximize the opportunity to realize value for stockholders.
• Lower burn rate versus costs of maintaining company infrastructure.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995.