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386A.6-080 Distributions.
(1)
(2)
(3)
(4)
(5)
(6)
Subject to any restriction in the governing instrument and the limitations in
subsection (3) of this section, the trustees may authorize and the statutory trust
may make distributions to its beneficial owners, including distributions to the
beneficial owners associated with a series out of property of or associated with
a series.
If there is no record date for determining the beneficial owners entitled to a
distribution other than one involving a purchase, redemption, or other
acquisition of beneficial interests in the statutory trust, it shall be the date the
distribution is authorized.
No distribution shall be made if, after giving it effect:
(a) The statutory trust would not be able to pay its debts as they become due
in the usual course of business;
(b) The statutory trusts total assets would be less than the sum of its total
liabilities plus, unless the governing instrument permits otherwise, the
amount that would be needed, if the statutory trust were to be dissolved at
the time of the distribution, to satisfy the preferential rights upon
dissolution of beneficial owners whose preferential rights are superior to
those receiving the distribution; or
(c) The distribution is impermissible under the governing instrument.
With respect to any distribution to the beneficial owners associated with a
series out of property of or associated with a series, subsection (3) of this
section shall be applied with respect to that series and not the statutory trust or
any other series thereof.
The trustees may base a determination that a distribution is not prohibited
under subsection (3) or (4) of this section either on financial statements
prepared on the basis of accounting practices and principles that are
reasonable in the circumstances or on a fair valuation or other method that is
reasonable in the circumstances.
Except as provided in subsection (7) of this section, for purposes of
subsections (3) and (4) of this section, the effect of a distribution shall be
measured:
(a) In the case of distribution by purchase, redemption, or other acquisition of
the statutory trusts beneficial interests, as of the earlier of:
1.
The date money or other property is transferred or debt incurred by
the statutory trust; or
2.
The date the beneficial owner ceases to be a beneficial owner with
respect to the acquired beneficial interests;
(b) In the case of any other distribution of indebtedness, as of the date the
indebtedness is distributed; and
(c) In all other cases, as of:
1.
The date the distribution is authorized if the payment occurs within
one hundred twenty (120) days after the date of authorization; or
2.
The date the payment is made if it occurs more than one hundred
twenty (120) days after the date of authorization.
(7)
Indebtedness of a statutory trust or a series thereof, including indebtedness
issued as a distribution, shall not be considered a liability for purposes of
subsections (3) or (4) of this section if its terms provide that payment of
principal and interest are made only if and to the extent that payment of a
distribution to beneficial owners could then be made under this section. If the
indebtedness is issued as a distribution, each payment of principal or interest
shall be treated as a distribution, the effect of which is measured on the date
the payment is actually made.
Effective:July 12, 2012
History: Created 2012 Ky. Acts ch. 81, sec. 52, effective July 12, 2012.
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