Wind-Down Fund Clause Samples
A Wind-Down Fund clause establishes a dedicated reserve of funds to cover the costs and obligations associated with winding down a business or project. This clause typically specifies how much money will be set aside, what types of expenses are eligible for payment from the fund—such as final payroll, outstanding debts, or regulatory compliance costs—and the process for distributing any remaining balance. Its core practical function is to ensure that sufficient resources are available to facilitate an orderly and compliant closure, thereby protecting stakeholders from unexpected liabilities during the dissolution process.
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Wind-Down Fund. On the Effective Date, the Debtors shall transfer to a separate bank account of ESI the sum of $750,000 (the “Wind-Down Fund”), which shall be used by ESI to pay continuing administrative expenses and other costs and expenses associated with winding down the ESI estate. Any amounts remaining in the Wind-Down Fund after the wind-down of the ESI estate is completed shall be transferred to the Special Servicer, for the benefit of the holders of Mortgage Certificates. The winding down of the ESI estate shall be through a liquidating plan or another arrangement agreed upon by ESI, the Special Servicer (subject to the consent of the Operating Advisor) and the Creditors’ Committee. The terms of any orders entered in connection with such wind-down shall be consistent with the terms of this Agreement and the Litigation Trust Agreement.
Wind-Down Fund. On the Effective Date, the Debtors shall transfer to a separate bank account of ESI the sum of $750,000 (the “Wind-Down Fund”), which shall be used by ESI to pay continuing administrative expenses and other costs and expenses associated with winding down the ESI estate. Any amounts remaining in the Wind-Down Fund after the wind-down of the ESI estate is completed shall be transferred to the Special Servicer, for the benefit of the holders of Mortgage Certificates.