Express Trust Clause Samples
An Express Trust is a legal arrangement in which a person (the settlor) intentionally creates a trust by explicitly stating their intention to do so, usually through a written document such as a trust deed or will. This type of trust clearly identifies the trust property, the trustee who will manage it, and the beneficiaries who will benefit from it. For example, a parent may establish an express trust to provide for their children’s education by transferring assets to a trustee with specific instructions. The core practical function of an express trust is to ensure that the settlor’s wishes regarding the management and distribution of assets are clearly documented and legally enforceable, thereby reducing ambiguity and potential disputes among parties.
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Express Trust. If any Creditor shall have received any payment or distribution out of any of the assets constituting a part of the Collateral from any foreclosure, sale, liquidation or other disposition of, or realization upon, the Collateral, such Creditor shall hold such payment or distribution in trust as trustee of an express trust, for the benefit of itself and the other Creditors, shall not commingle such payment with its other assets, and shall promptly take all action necessary to cause such payment to be shared in accordance with Section 3 hereof. As between the Borrower and the Creditors, any Creditor making a payment to the other Creditors pursuant to Sections 3 or 4 hereof shall be deemed not to have received or realized on account of the Obligations held by such Creditor all or any portion of the amount so paid over to the other Creditors. If all or a portion of any amount paid by a Creditor to the other Creditors pursuant to Sections 3 or 4 hereof must thereafter be repaid or restored (whether by court order or settlement of a claim) the payment shall, to such extent, be rescinded and repaid, without interest.
Express Trust. To begin, ▇▇. ▇▇▇▇▇▇▇ contends that the MSA “is sufficient to create an express trust under Oregon law.” Def. Resp., at 9. I disagree. As relevant here, the creation of an express trust under Oregon law requires either a transfer of property to a trustee, a declaration by the trustee that certain property is held in trust, or a court order that “requires property to be administered in the manner of an express trust.” ORS 130.150(1).9 None of these requirements are met.
a. The MSA does not say that ▇▇▇▇▇▇ holds his interests in the Corporate Entities in trust for ▇▇. ▇▇▇▇▇▇▇. It is true, as ▇▇. ▇▇▇▇▇▇▇ argues, that the use of the term “trust” or “trustee” is not strictly required to create a trust; nonetheless, the contextual evidence in the MSA clearly indicates to me that there was no external expression of intent to create a trust. I make this finding based on three specific features of the MSA. First, instead of transferring the corporate interests to Debtor “in trust,” the MSA awards Debtor “all right, title and interest in said corporations, subject to judgment 8 ▇▇. ▇▇▇▇▇▇▇ makes a strained argument that the MSA establishes different ownership regimes for the Corporate Entities versus the potential proceeds from the sale of the Subject Assets. See Def. Resp., at 9-11. This reading is not supported by the text of the MSA. The MSA either grants ▇▇. ▇▇▇▇▇▇▇ a claim secured by a lien on ▇▇▇▇▇▇’s interests in the Corporate Entities, or it anticipates that she will receive such a secured claim in the future, following a valuation procedure. See infra, note 10. Given this starting point, it is logical that whatever rights ▇▇. ▇▇▇▇▇▇▇ has vis-à-vis the interests in the Corporate Entities would also apply to any proceeds that resulted from a sale of the underlying assets. This does not, as ▇▇. ▇▇▇▇▇▇▇ would have the court rule, create some kind of bifurcated ownership structure. Rather, it is simply the standard mechanics of a security interest.
Express Trust. If any Investor shall have received any payment or distribution out of any of the assets constituting a part of the Collateral from any foreclosure, sale, liquidation or other disposition of, or realization upon, the Collateral other than in accordance with Section 7, such Investor shall hold such payment or distribution in trust as trustee of an express trust, for the benefit of itself and the other Investors, shall not commingle such payment with its other assets, and shall promptly take all actions necessary to cause such payment to be shared in accordance with Section 7. As between the Pledgor and the Investors, any Investor making a payment to the other Investor pursuant to this Section 9(c) shall be deemed not to have received or realized on account of the Obligations held by such Investor all or any portion of the amount so paid over to the other Investors. If all or a portion of any amount paid by an Investor to the other Investors pursuant to this Section 9(c) must thereafter be repaid or restored (whether by court order or settlement of a claim), the payment shall, to such extent, be rescinded and repaid, without interest.