Minority Discount
Posted: Mon Jul 09, 2012 9:01 pm
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It sounds as if this property is an asset of a trust rather than
corporation. Under these circumstances I do not really see a minority
discount being applicable as that more likely comes into play in
interests in coporations/LLCs. If not in a trust, need more
information. If it is a trust asset, the big issue is the terms of
the trust. What type of authority does the trust trustee possess and
what distribution terms does the trust contain? Outright? Certain
age? Is there a spendthrift clause? If distributions are at the
discretion of the successor trustee of the trust, being on good terms
with succusser trustee helps tremendously to protect trust assets.
Being on bad terms with the successor trustee of the trust allows the
bankruptcy trustee the opportunity to manipulate the situation to
induce distributions of assets from the trust that a friendly successor
trustee of the trust would not be inclined to accomodate.
The bankruptcy trustee can sit and wait for a distribution from the
trust or sell the debtor's right to the distribution. The value of the
debtor's interest in the trust is directly correlated to the likelihood
of a distribution being made to the debtor and the likely timeline for
distribution, subject to some present value calculation. Whether the
debtor is a minority or majority beneficiary does not matter if trust
trustee has discretionary control over the distribution. The trustee
is in charge and the debtor beneficary generally has no say in the
matter.
I also have seen bankruptcy trustee's sue a trust trustee for some
sort of breach of fiduciary duty, accounting and any other cause of
action conceiveable to encourage the trust trustee to settle and be
done with bankruptcy trustee.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
On Mon, 9 Jul 2012 19:12:50 -0700, Gerald McNally wrote:
Dear Listmates,
Clients have used up their exemptions prior to filing. After the
filing, wife confesses: her mother died last year, leaving wife 25% of
moms Pacoima residence. Im having clients do the
inspection-contractor bid-appraisal to get a liquidation value before I
amend SchB.
In the meantime, what experience does anyone have with what
percentage minority discount a (very) sophisticated trustee will demand
as a settlement. Clients dont expect much cooperation from the
successor trustee. Any other suggestions to contain the damage also
appreciated.
Gerald McNally
Gerald McNally
McNally & Associates, P.C.
517 East Wilson Ave., Ste 104
Glendale, CA 91206
818.507.5100
Fax: 818.507.5001
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start="42z3aauxf3ms@webmail.mysuperpageshosting.com"
charsetF-8
p{margin: 0;padding: 0;}It sounds as if this
property is an asset of a trust rather than corporation. Under
these circumstances I do not really see a minority discount being
applicable as that more likely comes into play in interests
in coporations/LLCs. If not in a trust, need more information.
If it is a trust asset, the big issue is the terms of the
trust. What type of authority does the trust trustee possess and what
distribution terms does the trust contain? Outright?
Certain age? Is there a spendthrift clause? If distributions are at
the discretion of the successor trustee of the trust, being on good terms with
succusser trustee helps tremendously to protect trust assets. Being on bad
terms with the successor trustee of the trust allows the bankruptcy
trustee the opportunity to manipulate the situation to induce distributions
of assets from the trust that a friendly successor trustee of the
trust would not be inclined to accomodate.
The bankruptcy trustee can sit and wait for a distribution from the trust
or sell the debtor's right to the distribution. The value of
the debtor's interest in the trust is directly correlated to the likelihood
of a distribution being made to the debtor and the likely timeline for
distribution, subject to some present value calculation. Whether the
debtor is a minority or majority beneficiary does not matter if
trust trustee has discretionary control over the
distribution. The trustee is in charge and
the debtor beneficary generally has no say in the
matter.
I also have seen bankruptcy trustee's sue a trust trustee for
some sort of breach of fiduciary duty, accounting and any other cause of action
conceiveable to encourage the trust trustee to settle and be done with
bankruptcy trustee.
Mark T. JesseeLaw Offices of Mark T. Jessee"A Debt Relief
Agency"50 W. Hillcrest Drive, Suite 200Thousand Oaks, CA 91360(805)
497-5868 (805) 497-5864 (Facsimile)
On Mon, 9 Jul 2012 19:12:50 -0700, Gerald McNally
<gm@mcesq.com> wrote:
The post was migrated from Yahoo.