City co investing liquidating trust
An investor that is long a stock may decide to sell some or all of the shares held in his portfolio for cash.
Liquidating an asset is usually carried out when an investor or portfolio manager needs the cash to re-allocate funds or re-balance the portfolio.
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This dispute concerned certain tax liabilities that allegedly were assumed by the predecessor corporation of defendant-appellee City Investing Company Liquidating Trust (the “Trust”). For the reasons that follow, we conclude that Am Base's claims are barred as a matter of law by the doctrine of res judicata. Certain directors and officers of City (“Trustee Defendants”) occupied certain fiduciary positions with both Am Base and the Trust.
The shareholders appoint a liquidator who dissolves the company by collecting the assets of the solvent company, liquidating the assets, and distributing the proceeds to employees who are owed wages and to creditors in order of priority.
Any cash that remains is then distributed to preferred shareholders before common shareholders get a cut.
An asset that is not performing well in the markets may also be partially or fully liquidated to minimize or avoid losses.
An investor who needs cash to fulfill other non-investment obligations, such as bill payments, vacation expenses, car purchase, tuition fees, etc. Financial advisors tasked with allocating assets to a portfolio usually consider, among other factors, why the investor wants to invest a certain amount of money and for how long the investor would like to invest for.