Common use of Trust fund established Clause in Contracts

Trust fund established. Upon the insolvency of any licensee, a trust fund must be established for the benefit of noncredit-sale receiptholders and to pay the costs incurred by the commission in the administration of the insolvency. The trust fund must consist of the following: 1. Nonwarehouse receipt grain of the insolvent licensee held in storage or the proceeds obtained from the conversion of such grain. 2. The proceeds, including accounts receivable, from any grain sold from the time of the filing of the claim that precipitated an insolvency until the commission is appointed trustee must be remitted to the commission and included in the trust fund. 3. The proceeds of insurance policies on destroyed grain. 4. The claims for relief, and proceeds therefrom, for damages upon bond given by the licensee to ensure faithful performance of the duties of a licensee. 5. The claim for relief, and proceeds therefrom, for the conversion of any grain stored in the warehouse. 6. Unencumbered accounts receivable for grain sold prior to the filing of the claim that precipitated an insolvency. 7. Unencumbered equity in grain hedging accounts. 8. Unencumbered grain product assets. Each surety on the insolvent licensee's bonds must be joined as a party to the insolvency proceeding. If it is in the best interests of the receiptholders, the court may order a surety to deposit some or all of the penal sum of the bond into the trustee's trust account pending determination of the surety's liability under the bond.