Simply put, Safe Harbor protections prevent assets issued or owned by a bankrupt Debtor from being seized by the FDIC/Creditors for the payment of debts.
This would protect any comingled assets of the 3rd party owners and those of the Debtors in for example, a Trust, from seizure.
IMO, any portion of Safe Harbor assets the Debtor owns is protected from bankruptcy Creditors, but not the Debtors in terms of the cash yields ONLY, not the actual Trust property.
A Debtor that is designated in a PSA (per CBA's post) as the sole recipient of those interests can therefore utilize any cash benefits,...when and if available, as they see fit.
If cash yields return from Safe Harbor Trust Interests, why would the LT not be able to use these funds to finally clear the allowed bankruptcy debt of the estate???
The same logic could apply to LT distributions to Escrows, that's why IMO, the Safe Harbor rule does not preclude the provisions set forth in the POR.
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