Investment liquidating trust
When a company fails to repay its creditors due to financial hardship and prolonged losses in its operations, a bankruptcy court may order a compulsory liquidation of the business assets if the company is found to be insolvent.
The secured creditors would take over the assets that were pledged as collateral before the loan was approved.
The financial advisor would keep that five year deadline in mind when selecting investments likely to appreciate and protect the capital for the investor.
While businesses can liquidate assets to free up cash even in the absence of financial hardship, asset liquidation in the business world is mostly done as part of a bankruptcy procedure.
Many investors prefer to use mutual funds for stock investing so that the portfolio can be traded.
If an investor is interested in buying and holding a portfolio of bonds and earning interest, that individual may purchase a UIT or closed-end fund with a fixed portfolio.
Unit investment trusts, along with mutual funds and closed-end funds, are defined as investment companies.
Though the Trustees initially anticipated issuing additional partial distribution payments, it has been determined that a single final distribution will be made upon repayment of the balance due under the Note.The shareholders appoint a liquidator who dissolves the company by collecting the assets of the solvent company, liquidating the assets, and distributing the proceeds to employees who are owed wages and to creditors in order of priority.Any cash that remains is then distributed to preferred shareholders before common shareholders get a cut.A RIC is a corporation in which the investors are joint owners, and a grantor trust grants investors proportional ownership in the UIT's underlying securities.
Investors can redeem mutual fund shares or UIT units at net asset value (NAV) to the fund or trust either directly or with the help of an investment advisor.
An investor that is long a stock may decide to sell some or all of the shares held in his portfolio for cash.