TRUSTS IN FINANCING TRANSACTIONS

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TRUSTSIN FINANCING TRANSACTIONS

• Ellen R. Marshall

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FIDEICOMISOSIN FINANCING TRANSACTIONS

• Ellen R. Marshall

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Common Law -

• England

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Common Law -

• England
• US
• Australia
• Hong Kong
• etc.

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Common Law Anglo-American

• England
• US
• Australia
• Hong Kong
• etc.

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Common Law Civil Law Anglo-American

• England
• US
• Australia
• Hong Kong
• etc.

• France

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Common Law Civil Law Anglo-American

• England
• US
• Australia
• Hong Kong
• etc.

• France
• Germany
• Japan
• Argentina
• Brazil
• Uruguay
• etc.

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Common Law Civil Law Anglo-American
Napoleonic

• England
• US
• Australia
• Hong Kong
• etc.

• France
• Germany
• Japan
• Argentina
• Brazil
• Uruguay
• etc.

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Common Law Civil Law Anglo-American
Napoleonic

• TRUSTS

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Common Law Civil Law Anglo-American
Napoleonic

• TRUSTS

• NO TRUSTS

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TRUST HISTORY

• Middle Ages

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TRUST HISTORY

• Middle Ages
• Separation of
• Legal Title from
• Equitable Title

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TRUST HISTORY

• Middle Ages
• Separation of
• Legal Title from
• Equitable Title

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TRUST HISTORY

• Middle Ages
• Separation of
• Legal Title from
• Equitable Title

TRUSTEE
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TRUST HISTORY

• Middle Ages
• Separation of
• Legal Title from
• Equitable Title

BENEFICIARIES
TRUSTEE
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TRUST
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TRUST / SPC
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TRUST / SPC

• Isolate Assets

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TRUST / SPC

• Isolate Assets
• Sale or Pledge

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds
• Higher Credit Rating

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds
• Higher Credit Rating
• Lower Cost

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds
• Sale Accounting

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds
• Sale Accounting
• Shrink Balance Sheet

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds
• Sale for Tax

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds
• Sale for Tax
• Taxable Loss

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds
• Borrowing for Tax

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds
• Borrowing for Tax
• Defer Taxation of Gain

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds
• Liquidity

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TRUST / SPC

• Isolate Assets
• Sale or Pledge Funds
• Public Securities Market

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(No Transcript)
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Legal Considerations
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Bankruptcy Law
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Bankruptcy Law

• Separate in a holder
• bankruptcy

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Bankruptcy Law

• Separate in a holder -- trustee -- bankruptcy

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Bankruptcy Law

• Separate in a holder -- trustee -- bankruptcy
• Separate in an originator
• bankruptcy

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Bankruptcy Law

• Separate in a holder -- trustee -- bankruptcy
• Separate in an originator -- grantor -- bankruptcy

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Bankruptcy Law

• Separate in a holder -- trustee -- bankruptcy
• Separate in an originator -- grantor --
  bankruptcy
• Single purpose

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Bankruptcy Law

• Separate in a holder -- trustee -- bankruptcy
• Separate in an originator -- grantor --
  bankruptcy
• Single purpose
• No employees

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Bankruptcy Law

• Separate in a holder -- trustee -- bankruptcy
• Separate in an originator -- grantor --
  bankruptcy
• Single purpose
• No employees
• No other business

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Conveyancing Law
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Conveyancing Law

• Conclusive transfer, as to third parties

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Conveyancing Law

• Conclusive transfer, as to third parties
• No notice to debtor

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Conveyancing Law

• Conclusive transfer, as to third parties
• No notice to debtor
• No consent from debtor

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Servicing
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Servicing

• Appropriate to assets

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Servicing

• Appropriate to assets
• Segregation of assets

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Servicing

• Appropriate to assets
• Segregation of assets
• Collection as lawful conduct

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Servicing

• Appropriate to assets
• Segregation of assets
• Collection as lawful conduct
• Credit quality of servicer

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Servicing

• Appropriate to assets
• Segregation of assets
• Collection as lawful conduct
• Credit quality of servicer
• Back-up servicer

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Foreclosure Law
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Foreclosure Law

• Legal right

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Foreclosure Law

• Legal right
• Practical ability

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Foreclosure Law

• Legal right
• Practical ability
• Timing

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Foreclosure Law

• Legal right
• Practical ability
• Timing
• Nonjudicial procedure

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Tax Law
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Tax Law

• No additional tax

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Tax Law

• No additional tax
• Or, minimal additional tax

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Tax Law

• No additional tax
• Or, minimal additional tax
• Types of tax

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Tax Law

• No additional tax
• Or, minimal additional tax
• Types of tax income,

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Tax Law

• No additional tax
• Or, minimal additional tax
• Types of tax income, capital gain,

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Tax Law

• No additional tax
• Or, minimal additional tax
• Types of tax income, capital gain, value added

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Tax Law

• No additional tax
• Or, minimal additional tax
• Types of tax income, capital gain, value added
• Occasions of tax

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Tax Law

• No additional tax
• Or, minimal additional tax
• Types of tax income, capital gain, value added
• Occasions of tax transfer in,

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Tax Law

• No additional tax
• Or, minimal additional tax
• Types of tax income, capital gain, value added
• Occasions of tax transfer in, collection of
  cash flow,

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Tax Law

• No additional tax
• Or, minimal additional tax
• Types of tax income, capital gain, value added
• Occasions of tax transfer in, collection of
  cash flow, payment to investors

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Accounting
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Accounting

• Sale vs. secured borrowing

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Accounting

• Sale vs. secured borrowing
• Assets with unrealized appreciation

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Accounting

• Sale vs. secured borrowing
• Assets with unrealized appreciation
• Assets with unrealized depreciation

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Accounting

• Sale vs. secured borrowing
• Assets with unrealized appreciation
• Assets with unrealized depreciation
• Consolidation of accounts

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Accounting

• Sale vs. secured borrowing
• Assets with unrealized appreciation
• Assets with unrealized depreciation
• Consolidation of accounts
• Off balance sheet treatment

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Securities Law
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Securities Law

• Trust interests as securities

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Securities Law

• Trust interests as securities
• Private placement exemption

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Securities Law

• Trust interests as securities
• Private placement exemption
• Registration - identity of issuer

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Securities Law

• Trust interests as securities
• Private placement exemption
• Registration - identity of issuer
• Disclosure - limited scope

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Securities Law

• Trust interests as securities
• Private placement exemption
• Registration - identity of issuer
• Disclosure - limited scope
• Jurisdiction

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Contract Law
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Contract Law

• Cash flow waterfall

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Contract Law

• Cash flow waterfall
• Representations and warranties

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Contract Law

• Cash flow waterfall
• Representations and warranties
• Remedies for erroneous representations

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Contract Law

• Cash flow waterfall
• Representations and warranties
• Remedies for erroneous representations
• Servicing duties

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Contract Law

• Cash flow waterfall
• Representations and warranties
• Remedies for erroneous representations
• Servicing duties
• Indemnification

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Contract Law

• Cash flow waterfall
• Representations and warranties
• Remedies for erroneous representations
• Servicing duties
• Indemnification
• Credit support - guaranties, insurance

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• Bankruptcy Law
• Conveyancing Law
• Servicing
• Foreclosure Law
• Tax Law
• Accounting
• Securities Law
• Contract Law

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TRUSTSIN FINANCING TRANSACTIONS

• Ellen R. Marshall