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LIQUIDATING TRUST AGREEMENT
This draft assumes that Class 4 accepts the plan and that there
are two classes of beneficiaries.
THIS LIQUIDATING TRUST AGREEMENT ("Agreement") dated as
of , 1998, by and between Fruehauf Trailer Corporation,
Maryland Shipbuilding & Drydock Company, F.G.R., Inc.,
Jacksonville Shipyards, Inc., Fruehauf International
Limited, Fruehauf Corporation, The Xxxxxx Co.,
Deutsche-Fruehauf Holding Corporation, MJ Holdings,
Inc., and E.L. Devices, Inc. ("Fruehauf" and/or
"Debtors"), whose address is 0000 Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxx xxx Xxx, Xxxxxxxxxx 00000-0000, IBJ Xxxxxxxxx Bank &
Trust Company, the Indenture Trustee for Fruehauf's 14.75%
Secured Senior Notes due 2002 (the "Indenture Trustee"), for
the sole purpose of conveying the Foreclosed Assets to the
Beneficial Interestholders who will thereafter transfer them
to the Liquidating Trust, and Xxxxxx X. Street ("Trustee"),
whose address is 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxx xxx
Xxx, Xxxxxxxxxx 00000-0000.
A G R E E M E N T S:
NOW, THEREFORE, in consideration of the premises and
the mutual agreements of the parties hereinafter contained,
and in order fully to set forth certain obligations of the
parties hereto, as contemplated by the Plan, the parties hereto
agree as follows:
1. Definitions:
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1.1 Defined Terms. All terms used herein which are
defined in the Plan shall have the same meaning herein unless
otherwise defined herein or the context otherwise requires.
1.2 Additional Defined Terms. As used herein,
the following terms shall have the meanings set out below,
unless the context otherwise requires:
(a) "Beneficial Interest" or "Beneficial
Interests" shall mean the respective rights and interests
of each of the Class A or Class B Beneficial
Interestholders in and to the Liquidating Trust and the
Trust Estate.
(b) "Beneficial Interestholder" shall mean the
holder of a Beneficial Interest.
(c) "Beneficial Interestholders" shall mean the
Class A Beneficial Interestholders and the Class B
Beneficial Interestholders.
(d) "Class A Beneficial Interestholder" shall mean
an individual or entity holding an Allowed Class 2 Claim or
an Allowed Class 4 Claim and their successors and assigns.
(e) "Class B Beneficial Interestholder" shall mean
an individual or entity holding an Allowed
Administrative Claim, an Allowed Pre-Petition Tax Claim
or an Allowed Priority Claim and its successors and
assigns.
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(f) "Distribution Fund" shall mean the portion of
the Debtors' Cash on the Effective Date which shall
be transferred to the Liquidating Trust, on behalf of and
for the benefit of the holders of Allowed
Administrative, Priority and Pre-Petition Tax Claims. The
amount of Cash in the Distribution Fund shall equal the
aggregate of (a) the allowed amount of all Administrative
Claims, Pre-Petition Tax Claims and Priority Claims; and
(b) the asserted amount or court-estimated amount of
Disputed or undetermined (i) Administrative Expense
Claims, (ii) Pre-Petition Tax Claims, and (iii) Priority
Claims. With respect to Administrative Claims for
compensation and reimbursement of expenses of
professionals or other persons pursuant to sections 328,
330, 331 and 503(b) of the Bankruptcy Code, the amount of
Cash to be deposited shall be the amount sought or the
maximum amount estimated to be sought for such compensation
and expenses. The Distribution Fund shall not include
interest earned on the Distribution Fund after the Effective
Date.
(g) "Indebtedness" shall mean, with respect to
each Beneficial Interestholder, the outstanding amount of
his Allowed Claim, giving rise to a beneficial interest in
the Liquidating Trust and Trust Estate.
(h) "Initial Term" shall have the meaning set out in
Section 9.1 hereof.
(i) "Register" shall have the meaning set out in
Section 3.2 hereof.
(j) "Remaining Assets" shall mean the assets of the
Liquidating Trust, including only that portion of the
Distribution Fund remaining after payment of Allowed
Administrative, Priority and Pre-Petition Tax Claims.
(k) "Renewal Period" shall have the meaning set out
in Section 9.1 hereof.
(l) "Liquidating Trust" shall have the meaning set
out in Section 2.1 hereof.
(m) "Trust Advisory Committee" shall be two
designated representatives of the holders of the Senior Notes
and their successors, if any. The initial members of
the Trust Advisory Committee shall be selected by the
Unofficial Committee of Senior Note Holders. If a
Trust Advisory Committee member resigns, no longer owns or
controls Trust Certificates or is no longer able to carry
out the duties as a member, the Bankruptcy Court (upon
motion by either a Trust Certificate Holder or the Trustee)
shall appoint a replacement member. Any such replacement
member must own one or more Trust Certificates.
(n) "Trust Certificates" shall mean the
certificates issued by the Liquidating Trust to the
Beneficial Interestholders to reflect all of the Class A
Beneficial Interests in the Liquidating Trust.
(o) "Trust Estate" shall mean all of the property
held from time to time by the Trustee pursuant to this Agreement.
2. Authority of and Certain Directions to Trustee: Declaration of Liquidating
Trust.
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2.1 Creation of the Liquidating Trust. The Debtor,
on behalf of the Beneficial Interestholders who are entitled
to receive assets pursuant to the Plan, hereby creates the
Fruehauf Liquidating Trust (the "Liquidating Trust") for the
benefit of its Beneficial Interestholders. The Trustee may,
but shall not be required to, transact the business and
affairs of the Liquidating Trust in that name.
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2.2 Property of the Liquidating Trust. Upon
execution hereof, the Debtor and the Indenture Trustee, on
behalf of the Beneficial Interestholders, shall grant,
convey, transfer and assign to the Liquidating Trust the
property described on Exhibit "A" attached hereto and made a
part hereof. Legal title to the Trust Estate shall be held
either in the name of the Liquidating Trust, or in the name of
the Trustee on behalf of the Liquidating Trust, as the
Trustee may from time to time determine. The Trustee shall
hold such property in Liquidating Trust to be administered
and disposed of by him pursuant to the terms of the Plan and
this Agreement.
2.3 Purpose of Liquidating Trust. This Liquidating
Trust is organized for the sole purpose of conserving and
liquidating the Trust Estate for the benefit of the
Beneficial Interestholders as herein set out, with no objective
to engage in the conduct of a trade or business (although
companies whose stock is owned by the Liquidating Trust may
operate a business). Pursuant to this express purpose, the
Trustee is hereby authorized and directed to take all
reasonable and necessary actions to conserve and protect the
Trust Estate and to sell, lease, or otherwise dispose of
the Trust Estate, and to distribute the net proceeds of
such disposition, as hereinafter set out, in as prompt,
efficient and orderly a fashion as possible in accordance
with the provisions of Section Six hereof and the Plan.
3. Beneficial Interests.
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3.1 Class A Beneficial Interests.
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3.1.1 Beneficial Interests of Holders of
Allowed Class 2 Claims. Each Class A Beneficial Interestholder
that is the holder of an Allowed Class 2 Claim shall have a
Beneficial Interest in a pro rata distribution (based upon the
amount of its Class 2 Claim) of 94.5% of the Remaining Assets
and the Trust Certificates evidencing such Beneficial
Interest. The Liquidating Trust shall deliver all of the
Trust Certificates for holders of Allowed Class 2 Claims to the
Indenture Trustee on the Effective Date.
3.1.2 Beneficial Interests of Holders of
Allowed Class 4 Claims. Each Class A Beneficial Interestholder
that is the holder of an Allowed Class 4 Claim shall have a
Beneficial Interest in a pro rata distribution (based upon the
amount of its Class 4 Claim) of 5.5% of the Remaining Assets
and the Trust Certificates evidencing such Beneficial
Interest. The Trust Certificates representing the Beneficial
Interests of holders of Allowed Class 4 Claims shall be
distributed to such holders after all Disputed Class 4 Claims
have been resolved as provided in the Plan.
3.2 Class B Beneficial Interests. Each Class B
Beneficial Interestholder shall be deemed to have a Beneficial
Interest in the Liquidating Trust's interest in the
Distribution Fund to the extent of the amount of such
Beneficial Interestholder's Allowed Administrative, Priority or
Pre-Petition Tax Claims.
3.3 Transfer and Exchange. The Trustee shall cause to
be kept, at his offices, or at such other place or places as
shall be designated by him from time to time, a register
("Register") to register the ownership and the transfer of
ownership of Trust Certificates, subject to the provisions of
Section 3.3 hereof. The Trustee may require such
documentation of the transfer of Trust Certificates as he
deems advisable in his discretion. For good cause shown,
Class A Beneficial Interestholders and their duly authorized
representatives shall have the right, upon reasonable prior
written notice to the Trustee, and in accordance with reasonable
regulations prescribed by the Trustee and at the expense of
such Class A Beneficial Interestholder, to inspect and make
copies of the Register.
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3.4 Absolute Owners. The Trustee may deem and treat
each Beneficial Interestholder reflected as the owner of a
Beneficial Interest on the Register as the absolute owner
thereof for the purpose of receiving the distributions and
payments on account thereof and for all other purposes
whatsoever, and until any transfer of ownership is recorded
in the Register, the Trustee shall not be charged with having
received notice of any claim or demand of any other person to
such Beneficial Interest or the rights, titles, and interests
therein. All notices of a change of ownership of Trust
Certificates shall be forwarded to the Trustee by registered
or certified mail as set out in Section 10.3.
3.5 Place of Payment. The amounts payable to
the Beneficial Interestholders pursuant to Section Six hereof
as of the record date determined by the Trustee will be
payable either by mailing a check payable to such Beneficial
Interestholder at the address set forth in the Schedules or
the address set forth on the Proof of Claim filed by such
Beneficial Interestholder or at such address as such
Beneficial Interestholder shall have specified by written
notice to the Trustee.
4. Delivery and Acceptance of Trust Estate.
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4.1 Conveyance by Debtors and Indenture Trustee.
The Debtors and the Indenture Trustee are executing and
delivering to the Trustee conveyance instruments of the
property described on Exhibit "A" attached hereto, as
contemplated in the Plan and the Confirmation Order. At any
time and from time to time after the date hereof, at the
Trustee's request and without further consideration, the
Debtors and the Indenture Trustee shall execute and
deliver such other instruments of sale, transfer, conveyance,
assignment and confirmation and will cooperate and take such
other actions as the Trustee may reasonably deem necessary
or desirable to more effectively transfer, convey, and assign
the property described on Exhibit "A" to the Liquidating Trust.
The Debtors and the Indenture Trustee shall have no further
interest in the Trust Assets subsequent to their
conveyance to the Liquidating Trust.
4.2 Acceptance of Conveyance. The Trustee is
hereby directed to, and the Trustee agrees that he will:
(a) accept delivery from the Debtors and the
Indenture Trustee, on behalf of and for the benefit of the
Beneficial Interestholders, of the property described on
Exhibit "A" on behalf of the Liquidating Trust;
(b) accept from the Debtors and the Indenture
Trustee, on behalf of and for the benefit of the
Beneficial Interestholders, all conveyance instruments
required to be delivered by the Debtors to the Trustee
with respect to the property described on Exhibit "A"
pursuant to or in connection with the Plan, the Order,
and this Agreement; and
(c) take such other action as may be required of
the Trustee or the Liquidating Trust hereunder, including
the receipt and acceptance as part of the property
transferred into the Liquidating Trust of any property
or rights, including, without limitation, notes and other
negotiable instruments which the Trustee may receive in
connection with or in consideration of the property
transferred into the Liquidating Trust.
5. Administration of Trust Estate.
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5.1 Liquidating Trust Expenses. Upon execution hereof,
and continuing for so long as the Liquidating Trust
remains in existence, the Trustee may reserve such amounts as
the Trustee deems advisable for the payment of all expenses,
debts, charges, liabilities, and obligations with respect to
the Trust Estate, including all taxes of the Liquidating Trust
as determined by the Trustee in the Trustee's sole and
absolute discretion. Upon expiration of this Agreement,
any remaining cash in the Liquidating Trust after the
payment of all expenses, debts, charges, liabilities, and
obligations intended to be paid therefrom, shall be
distributed to the Class A Beneficial Interestholders as
provided in the Plan and in Section Six.
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5.2 Powers of Trustee. Subject to the provisions
of Section Two and of Section 5.5 hereof, in administering
the Liquidating Trust, the Trustee shall have the following
powers to be exercised in his discretion in the
administration of the Liquidating Trust: (i) to receive the
Trust Estate; (ii) to conserve, manage, sell, operate,
lease, or otherwise dispose of the Trust Estate for such
price and upon such terms and conditions as the Trustee
may deem appropriate and to execute such deeds, bills of
sale, assignments and other instruments in connection
therewith; (iii) to determine and collect payments to and
other income of the Liquidating Trust; (iv) to collect the
proceeds of the sale of property out of the Trust Estate; (v)
to collect, receive, compromise and settle notes and other
claims and receivables of the Liquidating Trust; (vi) to
assert, prosecute, litigate, compromise and settle claims and
causes of action included within the Trust Estate; (vii) to
discharge, compromise and settle any unascertained,
unliquidated or contingent debts, liabilities or obligations
of the Liquidating Trust, including objecting to claims filed
in the Bankruptcy Case; (viii) to distribute the net income
and proceeds of the Trust Estate conveyed or transferred, and
any balance remaining in the Distribution Fund, to the
Beneficial Interestholders in accordance with the Plan as
provided herein; (ix) to bring suit on behalf of or defend any
suit against the Liquidating Trust or the Trustee on behalf of
the Liquidating Trust; (x) to retain such legal counsel,
public accountants and other experts as the Trustee may deem
advisable in connection with the administration of the
Liquidating Trust or the exercise of his other powers set out
herein; (xi) to object to the Claim of any Beneficial
Interestholder under the Plan, and to compromise and
settle objections with respect to such Claims, (xii) to
open bank accounts on behalf of and in the name of the
Liquidating Trust; (xiii) to pay all taxes (without
objections), to make all tax withholdings, and to file tax
returns and tax information returns and make tax elections by
and on behalf of the Liquidating Trust; (xiv) to pay all lawful
expenses, debts, charges and liabilities of the Liquidating
Trust, including, without limitation, the reasonable expenses
of the Indenture Trustee; and (xv) to exercise such
other powers and duties as necessary or appropriate, in
the discretion of the Trustee to accomplish the purposes of the
Liquidating Trust as set out herein.
5.3 Additional Powers of Trustee. Subject to the
express limitations contained herein, the Trustee shall have,
and may exercise with respect to the Trust Estate, or any part
thereof, and in the administration and distribution of the
Trust Estate, all powers now or hereafter conferred on trustees
by the Texas Trust Code. The powers conferred by this Section
in no way limit any power conferred on the Trustee by any
other Section hereof but shall be in addition thereto;
provided, always, that the powers conferred by this
Section are conferred and may be exercised only and solely
within the limitations and for the limited purposes imposed
and expressed in Section Two hereof.
5.4 Limitations on Trustee; Investments.
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5.4.1 Actions Requiring Approval of Trust
Advisory Committee. The Liquidating Trustee must obtain prior
approval of the Trust Advisory Committee to:
(a) borrow money in excess of $500,000 or grant liens on
any part of the Trust Estate in excess of $500,000;
(b) sell assets of the Trust Estate with a value in excess
of $500,000;
(c) modify the Plan;
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(d) initiate and prosecute litigation, including but not
limited to claim objections with expected fees and costs in
excess of $250,000;
(e) dispose of or settle any claim or litigation with a
potential value to the Liquidating Trust in excess of $500,000;
and
(f) forego or defer the annual distribution to
Certificate Holders required by Section 6.2 hereof.
Approval will have been deemed to have been given ten (10)
days after the Trustee makes a written proposal to the Trust
Advisory Committee, unless a member of the Trust Advisory
Committee delivers a written objection to the Trustee.
5.4.2 Court Approval. In the event there is
not unanimous agreement by the Trust Advisory Committee members
and a dispute exists between the members of the Trust
Advisory Committee with respect to any actions described in
5.4.1 proposed by the Liquidating Trustee, and the dispute
cannot be resolved by agreement, the Liquidating Trustee shall
seek Bankruptcy Court approval of the proposed course of
action. All objections to the proposed course of action shall
be preserved and may be presented to the Bankruptcy Court for
resolution. In this event, the Liquidating Trustee shall pay
the professional fees and expenses incurred by the objecting
Committee member, up to but not exceeding the maximum
amount of $25,000 per Committee member during the term of the
Liquidating Trust.
5.4.3 Actions Requiring Approval of Class
A Beneficial Interestholders. The Trustee may not modify the
terms of this Liquidating Trust Agreement unless the
Liquidating Trustee secures the written approval of such
modification from Class A Beneficial Interestholders holding
over 50% of the Class A Beneficial Interests.
5.4.4 No Trade or Business. The Trustee
shall carry out the purposes of the Liquidating Trust
and the directions contained herein and shall not at any time
enter into or engage in any trade or business,
including, without limitation, the purchase of any asset or
property (other than such assets or property as are necessary
to preserve, conserve, and protect the Trust Estate and to
carry out the purposes of Section Two, Section Seven, and
this Section Five) on behalf of the Trust Estate or the
Beneficial Interestholders.
5.4.5 Investments. Other than funds maintained
in operating accounts in an amount deemed appropriate by
the Liquidating Trust to pay the current costs, expenses
and obligations of the Liquidating Trust, the Trustee shall
invest any monies held at any time as a part of the Trust
Estate, including without limitation, the Distribution Fund and
any other reserve or escrow established pursuant to the
terms of this Agreement or the Plan, only in
interest-bearing deposits, certificates of deposit, or
repurchase obligations of any federally insured banking
institution with a combined capital and surplus of at least
$50,000,000, or short term investments and obligations of, and
unconditionally guaranteed as to payment by, the United
States of America and its agencies or
instrumentalities, pending the need to make disbursements
thereof in payment of costs, expenses, and liabilities of the
Liquidating Trust or to make a distribution to the
Beneficial Interestholders. The Trustee shall be
restricted to the collection and holding of such monies
and to the payment and distribution thereof for the purposes
set forth in this Agreement and to the conservation and
protection of the Trust Estate in accordance with the
provisions hereof.
5.5 Transferee Liabilities. Except to the extent set
out in the Plan and in the Conveyance Instruments of the Trust
Estate from the Debtors and the Indenture Trustee to the
Liquidating Trust, the Liquidating Trust shall have no liability
for, and the Trust Estate shall not be subject to, any Claim
arising by, through, or under the Debtors. In no event shall
the Trustee have any personal liability for such Claims. If
any liability shall be asserted against the Liquidating Trust
or the Trustee as the transferees of the Trust Estate on
account of any claimed liability of, through, or under the
Debtors, the Trustee may use such part of the Trust Estate as
may be necessary to contest any such claimed liability and
to pay, compromise, settle or discharge same on terms
reasonably satisfactory to the Trustee. In no event shall
the Trustee be required to use his personal funds or assets or
the funds or assets of his firm or partnership for such purposes.
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5.6 Administration of Liquidating Trust. Subject to
the express limitations contained herein, in administering
the Liquidating Trust, the Trustee is authorized and directed
to do and perform all such acts and to execute and deliver
such deeds, bills of sale, assignments, instruments of
conveyance, and other documents as he may deem necessary or
advisable to carry out the purposes of the Liquidating Trust.
The Trustee shall effect such registrations and take all such
actions as are required to comply with state and federal
securities laws.
5.7 Payment of Expenses and Other Liabilities. The
Trustee shall pay from the Trust Estate all expenses,
charges, liabilities, and obligations of the Liquidating Trust,
including, without limiting the generality of the
foregoing, interest, taxes, assessments, and public charges of
every kind and nature. The Trustee, in his discretion and
judgment, may from time to time make provision by reserve or
otherwise out of the Trust Estate or the proceeds thereof
in such reasonable amount or amounts as the Trustee in
his discretion and judgment may determine to be necessary
or advisable to meet unascertained, unliquidated or contingent
liabilities of the Liquidating Trust. Notwithstanding anything
in this paragraph to the contrary, the Distribution Fund
shall be the sole Liquidating Trust asset in which Class B
Beneficial Interestholders hold a Beneficial Interest. The
Beneficial Interest of any Class B Beneficial Interestholder
in the Liquidating Trust is limited to the Allowed amount of
such Class B Beneficial Interestholders'
Administrative, Priority or Pre-Petition Tax Claim.
5.8 Fiscal Year. The Liquidating Trust's fiscal year
shall end on December 31 of each year unless the Trustee
deems it advisable to establish some other date on which the
fiscal year of the Liquidating Trust shall end.
5.9 Reports to Beneficial Interestholders. The
Trustee shall prepare, deliver, and file, as the case may be:
(a) with the Trust Advisory Committee, as soon
as practicable after the end of each calendar quarter,
a quarterly unaudited report for such quarter, commencing
with the first complete calendar quarter following the
date of this Agreement reflecting (i) the specific assets
of the Trust Estate disposed of or liquidated during such
calendar quarter; (ii) the gross receipts and any selling
expenses associated therewith; (iii) any other income
received or expense, disbursement, or reserve made or
established during such calendar quarter; (iv) the
borrowings of the Liquidating Trust during such
calendar quarter and the amount remaining owing on
such borrowings; and (v) all litigation commenced by
the Trustee on behalf of the Liquidating Trust;
(b) to such Class A Beneficial Interestholders who
so request in writing, within 120 days after the end of
each calendar year, at such Class A Beneficial
Interestholder's expense, an annual report for such
calendar year commencing with the first full calendar year
following the date of this Agreement reflecting (i) the
specific assets of the Trust Estate disposed of or
liquidated during such calendar year; (ii) the gross
receipts and any selling expenses associated therewith;
(iii) any other income received or expense,
disbursement, or reserve made or established during such
calendar year; (iv) the borrowings of the Liquidating Trust
during such calendar year and the amount remaining owing on
such borrowings; and (v) all litigation commenced by the
Trustee on behalf of the Liquidating Trust;
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(c) to each Class A Beneficial
Interestholder receiving a distribution in such year, a
summary of the information required in 5.9(b) above for
such year;
(d) income tax information returns, tax returns,
or other reports to Beneficial Interestholders and
applicable taxing authorities as may be required by law or
as may be requested in writing by a Beneficial
Interestholder at such Beneficial Interestholders' expense;
and
(e) within 120 days after the termination
or expiration of the Liquidating Trust, a final
financial report reflecting the final disposition of Trust
Estate and the final distribution to the Class A
Beneficial Interestholders who so request the delivery of
such report in writing and at such Class A Beneficial
Interestholders' expense.
6. Source of Payments, Distributions Among Beneficial Interestholders
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6.1 Payments from Trust Estate. All payments to be made
by the Trustee to any Beneficial Interestholder shall be made
only from the assets, income and proceeds of the Trust Estate
and only to the extent that the Trustee shall have received
sufficient assets, income, or proceeds of the Trust Estate to
make such payments in accordance with the terms of this Section
Six. Each Beneficial Interestholder shall look solely to
the assets, income, and proceeds of the Trust Estate for
distribution to such Beneficial Interestholder as herein
provided. Payments to Class B Beneficial Interestholders
shall be made solely from the Distribution Fund.
Payments to Class A Beneficial Interestholders may be
made in kind as well as in cash.
6.2 Frequency and Amounts of Payments. The frequency
and amounts of payments shall be determined by the Trustee.
However, unless waived or deferred by the Trust Advisory
Committee, the Trustee shall make distributions to Class
A Beneficial Interestholders no less frequently than annually
(on a calendar year basis). Until such time as all Disputed
Claims that are Administrative, Priority or Pre-Petition Tax
Claims have been Allowed or Disallowed by Final Order, the
Trustee may, but shall not be required to, make
distributions to Class B Beneficial Interestholders.
6.3 Tax Provisions.
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6.3.1 Income Tax Status. For all purposes of
the Tax Code, the Debtors shall be deemed to have transferred
the Liquidating Trust assets to the Beneficial
Interestholders pursuant to the Plan and the Beneficial
Interestholders shall be deemed to have transferred their
share of the Liquidating Trust assets to the Liquidating
Trust. For all federal income tax purposes, consistent
valuations shall be used by the Liquidating Trust and the
Beneficial Interestholders for the transferred Liquidating
Trust Assets. The Liquidating Trust is intended to be
treated as a liquidating trust pursuant to Treasury
Regulations 301.7701-4(d), and as a grantor trust subject
to the provisions of Subchapter J, Subpart E of the Tax Code,
owned by the Beneficial Interestholders as grantors. Any
items of income, deduction, credit, or loss of the Liquidating
Trust shall be allocated for federal, state and local income
tax purposes among the Beneficial Interestholders pro rata on
the basis of their Beneficial Interests; provided, however,
that to the extent that any item of income cannot be allocated
in the taxable year in which it arises, the Liquidating Trust
shall pay the federal, state and local taxes attributable to
such income (net of related deductions) and the amount of such
taxes shall be treated as having been received by, and paid
on behalf of, the Beneficial Interestholders receiving such
allocations when such allocations are ultimately made. The
Liquidating Trust is authorized to take any action that may be
necessary or appropriate to minimize any potential tax
liability of the Beneficial Interestholders arising out of the
operations of the Liquidating Trust.
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6.3.2 Tax Returns and Reports. In accordance
with Treasury Regulation 1.671-4(a), the Liquidating Trust
shall cause to be prepared and filed, at the cost and expense
of the Liquidating Trust, an annual information tax return
(Form 1041) with the Internal Revenue Service, with a
schedule attached showing the item of income, deduction, and
credit attributable to the Liquidating Trust and detailing the
allocation of such items of income, deduction, and credit
among the Beneficial Interestholders as required
pursuant to the Form 1041 instructions for grantor
trusts. Copies of such Form 1041 and attached schedules will
be delivered promptly to each Beneficial Interestholder. In
addition, the Liquidating Trust shall cause to be prepared
and filed in a timely manner, such other state or local tax
returns as are required by applicable law by virtue of the
existence and operation of the Liquidating Trust and shall pay
any taxes shown as due thereon. Within thirty (30) days
after the end of each calendar year, the Liquidating Trust
shall cause to be prepared and mailed to a Beneficial
Interestholder such other information as may be requested by
such Beneficial Interestholder in writing to enable
such Beneficial Interestholder to complete and file his,
her, or its federal, state and local income and other tax
returns.
6.3.3 Withholding. The Liquidating Trust
may withhold from the amount distributable from the Liquidating
Trust at any time such sum or sums as may be sufficient to pay
any tax or taxes or other charge or charges which have been or
may be imposed on the distributee or upon the Liquidating
Trust with respect to the amount distributable or to be
distributed under the income tax laws of the United States
or of any state or political subdivision or entity by reason
of any distribution provided for any law, regulation, rule,
ruling, directive, or other governmental requirement.
6.3.4 Tax Identification Numbers. The
Liquidating Trust may require any Beneficial
Interestholder or other distributee to furnish to the
Liquidating Trust its Employer or Taxpayer Identification
Number as assigned by the Internal Revenue Service and
the Liquidating Trust may condition any distribution to
any Beneficial Interestholder or other distributee upon
receipt of such identification number.
6.3.5 Tax Year. The taxable year of
the Liquidating Trust shall, unless otherwise required by
the Internal Revenue Code, be the calendar year.
7. Other Duties of the Trustee.
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7.1 Management of Trust Estate. With respect to assets
of the Trust Estate from time to time, the Trustee shall, and
is hereby directed:
7.1.1 If sufficient funds are available to
purchase and maintain in existence, such insurance as the
Trustee deems reasonable, necessary, or appropriate from
time to time to protect the Liquidating Trust's, the
Trustee's, and the Beneficial Interestholders' interests in
the Trust Estate.
7.1.2 To take such actions as shall be necessary
or advisable to preserve, maintain, and protect the Trust Estate
for the Beneficial Interestholders' benefit consistent with
the purposes of the Liquidating Trust.
7.2 No Implied Duties. The Trustee shall not
manage, control, use, sell, dispose, collect or otherwise deal
with the Trust Estate or otherwise take any action hereunder,
except as expressly provided herein, and no implied duties or
obligations shall be read into this Agreement in favor of or
against the Trustee; provided, however, that this provision
shall not limit the powers conferred on trustees by Delaware
law, without regard to conflicts of laws principles, except to
the extent any such power may conflict with any of the
provisions and purposes of this Agreement.
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8. Concerning the Trustee.
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8.1 Acceptance by Trustee. The Trustee accepts
the Liquidating Trust hereby created for the benefit of
the Beneficial Interestholders and agrees to perform the same
upon the terms and conditions herein set out.
Notwithstanding any term or provision hereof to the contrary,
the Trustee shall have and exercise the rights and powers
herein granted and shall be charged with the performance of
the duties herein declared on the part of the Trustee to be
had and exercised or to be performed. The Trustee also agrees
to receive and disburse all monies actually received by him
constituting part of the Trust Estate pursuant to the terms
of this Agreement. The Trustee shall not be personally liable
for any action taken or omitted to be taken by him except for
his own gross negligence or willful misconduct.
8.2 Discretionary Submission of Questions to the
Court. The Trustee, in his discretion and judgment, may submit
to the Court any question or questions regarding which the
Trustee may desire to have explicit approval of the Court for
the taking of any specific action proposed to be taken by
the Trustee with respect to the Trust Estate, or any
part thereof, or the administration and distribution of the
Trust Estate. The Court shall approve or disapprove any such
proposed action after motion and hearing. Any such proposed
action submitted to the Court for approval will be approved
by the Court if no Beneficial Interestholder objects to
such motion within the time specified by the applicable
Bankruptcy Rule. If a Beneficial Interestholder objects
to such action by the Trustee, the Court shall approve or
disapprove such action after hearing. Upon approval of a
proposed action by the Court by Final Order, the Trustee
shall be authorized to take the proposed action without
liability with respect thereto. If such action is not
approved by the Court, the Trustee shall not take such action.
All costs and expenses incurred by the Trustee in the
exercise of any right, power or authority conferred by this
Section shall be costs and expenses of the Trust Estate.
Any party desiring notice of matters submitted to the Court
must send the Trustee a written request for notice of
post-confirmation pleadings.
8.3 Liability of the Trustee.
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8.3.1 Limitation on Liability. No provision
of this Agreement shall be construed to impart any liability
upon the Trustee unless it shall be proved in a court of
competent jurisdiction that the Trustee's actions or omissions
constituted gross negligence or willful misconduct in the
exercise of or failure to exercise any right, power or duty
vested in him under this Agreement. The Trustee shall have no
personal liability for any of the rights, obligations, duties,
or liabilities of the Debtor, Debtor's bankruptcy estate, or
the Liquidating Trust.
8.3.2 Reliance on Orders, Statements,
Certificates or Opinions. In the absence of gross
negligence or willful misconduct on the part of the
Trustee, the Trustee may conclusively rely, as to the
truth of the statements and correctness of the opinions
expressed therein, upon any orders, statements, certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Agreement.
8.3.3 Discretion of Trustee. Within
the limitations and restrictions expressed and imposed herein,
the Trustee may act freely with respect to the exercise of any
or all of the rights, powers, and authority conferred hereby
in all matters concerning the Trust Estate after forming
his best judgment based upon the circumstances without the
necessity of obtaining the consent or permission or
authorization of the Beneficial Interestholders or of the
Court, any other court, official, or officer. The
rights, powers, and authority conferred on the Trustee by
this Agreement are conferred in contemplation of such freedom
of prudent judgment and action by the Trustee, within the
limitations and restrictions so expressed and imposed.
Further, the Trustee shall not be liable for any act or
omission in connection with the administration of this
Liquidating Trust, or the exercise of any right, power,
or authority conferred upon him hereunder, unless it shall be
proved that such Trustee was grossly negligent or acted in a
manner which constituted willful misconduct.
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8.3.4 Delegation of Duties. The Trustee shall
have power over and be solely responsible for the
management and administration of the Liquidating Trust.
Notwithstanding the foregoing, the Trustee may engage the
services of and delegate such of his powers and duties
(but not any of his responsibilities), upon such terms
and conditions as are satisfactory to the Trustee, to
such employees, agents, attorneys, accountants,
appraisers, consultants and other persons, including,
without limitation, where appropriate, any of the Beneficial
Interestholders and their respective agents and employees, as
he may deem necessary or advisable to carry out the purposes of
the Liquidating Trust.
8.3.5 Retention and Payment of Professionals.
The Trustee may consult with legal counsel and with such
public accountants and other professionals as may be retained
by the Trustee. The Trustee may pay from the Trust Estate the
fees and expenses of such professionals monthly at such rates
as may be agreed upon by the Trustee and such professionals.
The Trustee shall not be liable for any action taken or
suffered by him or omitted to be taken by him without gross
negligence or willful misconduct in reliance on any opinion or
certification of such accountants or in accordance with the
advice of such counsel or experts.
8.4 Reliance on Trustee. No person dealing with
the Trustee shall be obligated to see to the application of
any monies, securities, or other property paid or delivered to
him, or to inquire into the expediency or propriety of any
transaction or the right, power, or authority of the Trustee to
enter into or consummate the same upon such terms as the
Trustee may deem advisable. Persons dealing with the Trustee
shall look only to the Trust Estate to satisfy any liability
incurred by the Trustee to such persons, and, except as
otherwise expressly provided herein, the Trustee shall have
no personal obligation to satisfy any such liability.
8.5 Parties Acting on Behalf of Liquidating Trust.
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8.5.1 Indemnification. The Liquidating Trust
shall indemnify any person who becomes a party, or is threatened
to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal,
administrative, or investigative by reason of the fact that he
is or was a Trustee, employee, or agent of the Liquidating
Trust, or is or was serving on behalf of the Liquidating Trust
at the request of the Trustee as a director, officer, employee
or agent of another corporation, partnership, joint venture,
trust, or other enterprise, against expenses (including
attorneys' fees), judgments, tax obligations, liabilities or
penalties, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action,
suit or proceeding, including appeals thereof, if he acted
without gross negligence or willful misconduct, in the
exercise and performance of any power or duty of a
Trustee, employee or agent of the Liquidating Trust, as the case
may be, under this Agreement.
8.5.2 Payment of Expenses. Expenses
(including attorneys' fees) incurred by the Trustee or any
employee or agent of the Trustee in defending any action, suit
or proceeding may be paid by the Liquidating Trust in advance of
the final disposition of such action, suit or proceeding, upon
an undertaking by the Trustee, or such employee or agent, to
repay such amount to the Liquidating Trust, unless it shall
ultimately be determined that he is or was entitled to be
indemnified with respect thereto.
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8.6 Compensation of Trustee. The Trustee shall be
entitled to receive from the Trust Estate compensation for his
services as Trustee in accordance with terms set forth on
Exhibit C to this Liquidating Trust. The Trust Estate shall
also reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by him in the performance
of his duties hereunder, including the reasonable
out-of-pocket expenses of the Trustee, and the Trustee's
employees, attorneys, agents, accountants, appraisers,
consultants, and other persons retained by the Trustee
pursuant to the terms of this Agreement.
8.7 Resignation and Removal.
-----------------------------
8.7.1 Resignation. The Trustee may resign and
be discharged from any future obligations hereunder by
filing written notice thereof with the Bankruptcy Court and
serving the notice on the Trust Advisory Committee at least
thirty (30) days prior to the effective date of such
resignation. Such resignation shall become effective on the
later of (i) thirty (30) days after the giving of such
notice, or (ii) after appointment of a permanent or interim
successor trustee.
8.7.2 Removal. Any person serving as Trustee
may be removed at any time, for cause, upon entry of a Final
Order of the Bankruptcy Court removing the Trustee and
acceptance by a successor Trustee of his appointment.
8.7.3 Appointment of a Successor Trustee. If
the Trustee gives notice of his intent to resign pursuant to
Section 8.7.1 hereof or is removed pursuant to Section 8.7.2
hereof or dies or becomes incapable of acting, the Trust
Advisory Committee shall select a successor Trustee to act under
this Agreement and such successor shall be approved by the
Bankruptcy Court.
8.7.4 Reserve Fund, Tax Reports, Winding
Up. Notwithstanding his resignation or removal, the Trustee
shall be entitled to complete and file any and all tax returns
and reports and pay any and all taxes for periods during which
the Trustee served on behalf of the Liquidating Trust. The
Liquidating Trust shall pay the taxes and the Trustee's
expenses incurred with respect to the foregoing.
8.8 Acceptance of Appointment by Successor Trustee.
Any successor Trustee appointed hereunder shall execute an
instrument accepting such appointment in the form set out on
Exhibit "B" and shall deliver one counterpart thereof to the
Court. Thereupon, such successor Trustee shall, without any
further act, become vested with all the rights, titles,
interests, estates, properties, rights, powers, trusts, and
duties of his predecessor in the Liquidating Trust hereunder
with like effect as if originally named herein.
8.9 Posting of Bond. The Trustee shall not be required
to post a bond.
9. Term and Termination of Liquidating Trust.
-----------------------------------------------
9.1 Term. The Liquidating Trust shall continue and
remain in effect until the first to occur of the following:
(a) three years after the Effective Date ("Initial Term"),
provided, the term of the Liquidating Trust shall automatically
be renewed for two periods of one (1) year each ("Renewal
Period") in the event any portion of the Trust Estate has not
been fully liquidated and the proceeds thereof distributed
in accordance with this Agreement by the end of the Initial
Term or at the end of any Renewal Period and the term of
the Liquidating Trust may be extended beyond five (5) years
after the Effective Date if the Trustee secures Court approval
of the extended term no later than six (6) months after the
beginning of the extended term; or (b) the Trust Estate has
been fully liquidated and the proceeds thereof distributed in
accordance with this Agreement.
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9.2 Determination of Liquidation. The Trustee may
request that the Bankruptcy Court find that the Trustee has
disposed of such of the Trust Estate that it has effectively
been liquidated. If the Bankruptcy Court so finds, the
Liquidating Trust shall be deemed terminated pursuant to Section
9.1(b).
9.3 Termination. Upon termination of the
Liquidating Trust, if the Trustee reasonably determines that the
remainder of the Trust Estate, other than funds necessary to
pay amounts then owing to the Trustee, is of such a small amount
that it would not be economical or prudent to make any
further distributions to Certificate Holders then such funds
shall be distributed to The American Cancer Society or other
similar charity.
9.4 Winding Up. For the purpose of winding up the
affairs of the Liquidating Trust at its termination, the
Trustee shall continue to act as Trustee until his duties
have been fully discharged. After so doing, the Trustee
shall have no further duties or obligations hereunder. Upon
motion by the Trustee, the Court, if it determines it
appropriate, may enter an order relieving the Trustee of any
further duties hereunder.
10. Miscellaneous.
-------------------
10.1 Title to Trust Estate. No Beneficial
Interestholder shall have title to any part of the Trust
Estate. No transfer, by operation of law or otherwise, of the
right and interest of any Beneficial Interestholder in and
to the Trust Estate or hereunder shall operate to terminate
this Agreement or the trust hereunder or entitle any
successor or transferee of such Beneficial Interestholder
to an accounting with respect to the Trust Estate or to the
transfer to him of title to any part of the Trust Estate.
10.2 Sales of Trust Estate. Any sale or other conveyance
of the Trust Estate, or part thereof, by the Trustee made
pursuant to the terms of this Liquidating Trust Agreement shall
bind the Beneficial Interestholders and shall be effective to
transfer or convey all rights, titles and interests of the
Trustee and the Beneficial Interestholders in and to such
Trust Estate or part thereof.
10.3 Notices. Unless otherwise expressly specified
or permitted by the terms hereof, all notices shall be in
writing and shall be given by posting same in the United
States mails, certified or registered mail, return receipt
requested, postage prepaid, addressed to the party to whom
directed, as follows:
If to the Trustee to:
Xxxxxx X. Street
Xxxxxx Xxxxxx & Company
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx xxx Xxx, XX 00000-0000
If to the Trust Advisory Committee to:
and if to any Beneficial Interestholder, addressed to its
address appearing on the Register or at such other address
as such Beneficial Interestholder shall have given by written
notice to the other parties. All such notices shall be
deemed delivered three (3) days after the posting thereof in
such mails. 10.4 Severability. Any provision of this
Agreement which is invalid or unenforceable shall be
ineffective to the extent of such invalidity or
unenforceability without affecting the validity or
enforceability of any other provisions hereof.
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10.5 Counterparts. This Agreement may be executed
in multiple counterparts, each of which shall constitute
an original, but all of which together shall constitute one and
the same instrument.
10.6 Binding Agreement. All covenants and
agreements contained herein shall be binding upon, and inure to
the benefit of, the Trustee and his respective successors and
assigns, any successor trustee provided for in Section Eight,
his respective successors and assigns, and the Beneficial
Interestholders, and their respective successors and assigns.
Any request, notice, direction, consent, waiver, or other
instrument or action by any Beneficial Interestholder shall
bind its successors and assigns.
10.7 No Personal Liability of Beneficial
Interestholders. The Beneficial Interestholders shall not
incur any personal liability through their ownership or
possession of the Beneficial Interests, except for taxes
imposed on the Beneficial Interestholders pursuant to
applicable provisions of federal, state, or local law with
respect to their Beneficial Interests in or distributions from
the Liquidating Trust. Liabilities of the Liquidating Trust
are to be satisfied in all events (including the exhaustion of
the Trust Estate) exclusively from the Trust Estate. If the
Trustee determines that it is appropriate or necessary to
obtain a return of sums distributed to the Beneficial
Interestholders out of the Trust Estate to pay the expenses,
debts or liabilities of the Liquidating Trust
(including, but not limited to, tax liabilities), the
Trustee shall have the right to demand that the
Beneficial Interestholders return to the Trustee sums
distributed to such Beneficial Interestholders out of the
Trust Estate. If the Trustee makes such a demand on the
Beneficial Interestholders, the Beneficial Interestholders
shall return to the Trustee such sums distributed to them out
of the Trust Estate as the Trustee demands.
10.8 Headings. The heading of the various Sections
herein are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
10.9 Construction. Except where the context
otherwise requires, words importing the masculine gender shall
include the feminine and the neuter, if appropriate; words
importing the singular number shall include the plural number
and vice versa; and words importing persons shall
include partnerships, associations, and corporations. The
words herein, hereof, hereby, hereunder, and words of
similar import, refer to this instrument as a whole and
not to any particular Section or Subsection hereof.
10.10 GOVERNING LAW. THIS AGREEMENT SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF , EXCLUSIVE OF ITS LAWS RELATING TO CONFLICT OF
LAWS.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
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DEBTOR:
FRUEHAUF TRAILER CORPORATION,
MARYLAND SHIPBUILDING & DRYDOCK
COMPANY, F.G.R., INC., JACKSONVILLE
SHIPYARDS, INC., FRUEHAUF
INTERNATIONAL, LIMITED, FRUEHAUF
CORPORATION, THE XXXXXX CO.,
DEUTSCHE-FRUEHAUF HOLDING
CORPORATION, MJ HOLDINGS, INC.,
and E. L. DEVICES, INC.
By:______________________________
Xxxxxx X. Street,
Their Chairman, President and
Chief Executive Officer
TRUSTEE:
_______________________________
Xxxxxx X. Street
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EXHIBIT "A"
PROPERTY TO BE TRANSFERRED TO LIQUIDATING TRUST
Fruehauf Trailer Corporation, Maryland Shipbuilding
& Drydock Company, F.G.R., Inc., Jacksonville Shipyards,
Inc., Fruehauf International Limited, Fruehauf Corporation, The
Xxxxxx Co., Deutsche-Fruehauf Holding Corporation, MJ
Holdings, Inc., and E.L. Devices, Inc. transfer to the
Liquidating Trust, on behalf of and for the benefit of the
Beneficial Interestholders, all property, of any type, in which
it has a legal or equitable interest including, but not
limited to, all money, deposit accounts, accounts, general
intangibles, inventory, equipment, fixtures, goods,
instruments, chattel paper, documents, books and records,
customer lists, stock, bonds, certificates of deposits, letters
of credit, rights to refunds, promissory notes, real
property, the Distribution Fund, any interest in the
Foreclosed Assets and causes of action, including causes of
action under Chapter 5 of Title 11 of the United States Code
and excluding the Wabash Securities.
The Indenture Trustee for the Senior Notes, on behalf of
and for the benefit of the Beneficial Interestholders, shall
transfer to the Liquidating Trust all of its rights, title and
interest in the Foreclosed Assets.
17
EXHIBIT "B"
ACCEPTANCE OF APPOINTMENT
The undersigned,
___________________________________________, having been
appointed to serve as successor Trustee of the Liquidating
Trust created pursuant to that certain Liquidating Trust
Agreement ("Agreement") dated , 199 , by and
between Fruehauf Trailer Corporation, Maryland Shipbuilding
& Drydock Company, F.G.R., Inc., Jacksonville Shipyards,
Inc., Fruehauf International Limited, Fruehauf Corporation, The
Xxxxxx Co., Deutsche-Fruehauf Holding Corporation, MJ
Holdings, Inc., and E.L. Devices, Inc. and Xxxxxx X. Street,
Trustee, hereby accepts such appointment and agrees to serve as
successor Trustee under the Agreement as set out in Section 8.7
thereof.
Executed this ____ day of ___________________, 1998.
Successor Trustee:
By:_________________________
