Monday, April 02, 2018 2:51:16 PM
https://www.irs.gov/pub/irs-wd/201808004.pdf
Starting on page 4:
"Trust represents that the trustee and the trust advisory board have been working in an expeditious, commercially reasonable manner to monetize assets, to analyze and pursue any valid causes of action (including, without limitation, tax refund claims, preference actions, and potential causes of action against former directors and officers of W) and to investigate, prosecute and/or resolve disputed claims against Debtors. However, two principal outstanding matters have not concluded and are not expected to conclude by Date9, including the reconciliation of disputed claims filed against Debtors by former employees of Debtors and two claims pending in litigation with respect to federal and state income tax refunds. Accordingly, Trust represents that it is impossible for Trust to completely liquidate by Date9.
Under Article III of Trust Agreement, multiple extensions of Trust’s term may be obtained so long as Bankruptcy Court approval is obtained on a date within the period six months prior to the expiration of each extended term, and the extension is necessary to facilitate or complete the recovery and liquidation of Trust assets.
LAW AND ANALYSIS
Section 301.7701-4(d) provides that certain organizations which are commonly known as liquidating trusts are treated as trusts for purposes of the Internal Revenue Code. An organization will be considered a liquidating trust if it is organized for the primary purpose of liquidating and distributing the assets transferred to it, and if its activities are all reasonably necessary to, and consistent with, the accomplishment of that purpose. A liquidating trust is treated as a trust for purposes of the Code if it is formed with the objective of liquidating particular assets and not as an organization having as its purposes the carrying on a profit-making business which normally would be conducted through business organizations classified as corporations or partnerships. However, if the liquidation is unreasonably prolonged or if the liquidation purpose becomes so obscure by business activities that the declared purpose of liquidation can be said to be lost or abandoned, the status of the organization will no longer be that of a liquidating trust.
Rev. Proc. 94-45 provides the conditions under which the Service will consider issuing advance rulings classifying certain trusts as liquidating trusts under § 301.77014(d).
Section 3.06 of Rev. Proc. 94-45 provides that the trust instrument must contain a fixed or determinable termination date that is generally not more than five years from the date of creation of the trust and that is reasonable based on all the facts and ..."
Page 5
"...circumstances. If warranted by the facts and circumstances, provided for in the plan and trust instrument, and subject to the approval of the Bankruptcy Court with jurisdiction over the case upon a finding that the extension is necessary to the liquidating purpose of the trust, the term of the trust may be extended for a finite term based on its particular facts and circumstances. The trust instrument must require that each extension be approved by the court within 6 months of the beginning of the extended term."
_____________
IMO...Conclusions:
1) Per the IRS Letter, it states that there are a total of 5 outstanding issues/claims.
a) "principal matter" #1
b) "principal matter" #2
c) "claims filed against Debtors by former employees of Debtors"
d) and e) "two claims pending in litigation with respect to federal
and state income tax refunds"
2) My questions:
a) What is "principal matter" #1 that is outstanding?
b) What is "principal matter" #2 that is outstanding?
3) IMO...Obviously the 3 year extension is not an arbitrary duration, it coincides with time line estimations given by WMILT.
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