City co investing liquidating trust
An investor whose objective is to purchase a home five years from now, may have these a portfolio of stocks and bonds designed with the intention to liquidate in five years.The cash proceeds would then be used to make a down payment for a home.That compares with earlier estimates of between .33 and .10 projected by City's investment banker, the First Boston Corporation.John Herndon, a City spokesman, said the company planned to divest itself of all assets by June 30.Before: WALKER, Chief Judge, and OAKES and MINER, Circuit Judges. Kravitz, Wiggin & Dana LLP, New Haven, CT (Victor A. One of City's wholly-owned subsidiaries was the Home Group, Inc., which changed its name to Am Base in 1989. At the same time, the Trust was formed to, “among other things, assume all of the claims, liabilities, and obligations” of City that were “not otherwise provided for.” The Trust was initially funded with assets having an aggregate estimated value of approximately 0 million.Bolden, Wiggin & Dana, LLP, New Haven, CT, Philip Halpern, Collier, Halpern, Newberg, Nolletti & Bock, LLP, White Plains, NY, on the briefs), for Plaintiff-Appellant. Dodyk, Cravath, Swaine & Moore, New York, NY, for Defendants-Appellees. Am Base owned several operating subsidiaries, including the Home Insurance Company, and in the mid 1980s held assets in excess of billion. City's shareholders were the beneficiaries of the Trust and received ownership units in it.Liquidate means to convert assets into cash or cash equivalents by selling them on the open market.Liquidate is also a term used in bankruptcy procedures in which an entity chooses or is forced by a legal judgment or contract to turn assets into a "liquid" form (cash). In the investments arena, liquidation occurs when an investor decides to close out his or her position in a particular asset or security.
Shareholders of the City Investing Company, the diversified manufacturing, services and financial company, should receive at least a share in the company's liquidation, a spokesman said.The shareholders appoint a liquidator who dissolves the company by collecting the assets of the solvent company, liquidating the assets, and distributing the proceeds to employees who are owed wages and to creditors in order of priority.Any cash that remains is then distributed to preferred shareholders before common shareholders get a cut.When a company fails to repay its creditors due to financial hardship and prolonged losses in its operations, a bankruptcy court may order a compulsory liquidation of the business assets if the company is found to be insolvent.The secured creditors would take over the assets that were pledged as collateral before the loan was approved.