Treatment of Disputed Claims Reserve. Notwithstanding any other provision of this Agreement to the contrary, subject to definitive guidance from the IRS or a court of competent jurisdiction to the contrary, the Trustee shall (i) treat any Trust Assets allocable to, or retained on account of, the Disputed Claims as held by one or more discrete trusts for federal income tax purposes, consisting of separate and independent shares to be established in respect of each Disputed Claim, in accordance with the trust provisions of the IRC (sections 641 et seq.) or (ii) elect to treat such Trust Assets as a “disputed ownership fund” governed by Treasury Regulation Section 1.468B-9. All parties shall report, for income tax purposes, consistent with the foregoing. In the event, and to the extent, any Cash retained on account of a Disputed Claim in the Disputed Claims Reserve is insufficient to pay the portion of any such taxes attributable to the taxable income arising from the assets allocable to, or retained on account of, such Disputed Claim, such taxes shall be (a) reimbursed from any subsequent Cash amounts retained on account of such Disputed Claim, or (b) to the extent such Disputed Claim has subsequently been resolved, deducted from any amounts distributable by the Trustee as a result of the resolution of such Disputed Claim.
Treatment of Disputed Claims Reserve. Notwithstanding any other provision of this Litigation Trust Agreement to the contrary, subject to definitive guidance from the IRS or a court of competent jurisdiction to the contrary, the Litigation Trust may treat any Litigation Trust Assets allocable to, or retained on account of, the Disputed Claims Reserve as held by one or more discrete entities for federal, and applicable state, local or other, income tax purposes, and may determine that such entity or entities shall constitute “disputed ownership funds” under, and may make the election permitted by, Treasury Regulation section 1.468B-9, or any successor provision thereto. All Beneficiaries and Other Distributees shall be bound by, and shall report consistently with, such income tax treatment.
Treatment of Disputed Claims Reserve. Unless the Trustee determines, in his reasonable discretion, that such treatment is not appropriate, for example, if otherwise taxed, pursuant to Section 468B of the Tax Code, each reserve established pursuant to the Plan may be treated as a trust, separate and distinct from the Trust and all other reserves, which is subject to taxation under Section 641 of the Tax Code for each calendar year during which such reserve is maintained. Any federal, state or local income tax required to be paid with respect to the taxable income of any reserve, shall be paid exclusively out of the Cash credited to such reserve.
