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TexLaw
TexLaw, Attorney
Category: Business Law
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Experience:  Internationational Commercial Attorney
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Eight years ago I entered into a business arrangement with

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Eight years ago I entered into a business arrangement with three other people. The following is a paragraph from our contract:

"It is hereby agreed that there shall be a business organization, the exact type to be agreed upon at a later date, created by the parties hereto; and, that all revenue of any kind received from any of the property and/or assets covered herein shall be deposited into a bank account in that entity’s name, and that all expenses necessary to the continuation of revenue being paid to the parties hereto (i.e. property taxes on the royalties or property covered herein, and any necessary expenses such as well upkeep, etc.) shall be deducted and paid as required before the 70/30 division agreed to in this contract. Barcroft shall have a 50% vote in the operation of said business organization; and, the only function of said business organization shall be to facilitate the agreement in this contract. Any monies paid out of said business organization, other than the agreed upon split between the parties, shall be agreed upon by all parties hereto. The division shall be divided on a basis of 30% to Barcroft, 23.34% to Kenneth Vern Gibbs, 23.33% to Candace Walton Gibbs, and 23.33% to Howard Kirk Gibbs, at each instance of dispersal to the parties. Any party may demand a split of the assets of said business organization at any time."

Mine is the 30%. In fulfillment of this contract, we created a revocable trust wherein we were all settlors. It was a lucrative agreement for us all. Now, I would like my share split out under the provision that says, "Any party may demand a split of the assets of said business organization at any time.".

My question is this. If I demand a spit of my 30%, does the entire trust have to be split, or can the others leave their shares in the trust as before? If it remains in force, would I simply return my voting rights and interest to the trust as part of the split?

Hi,

My name is XXXXX XXXXX I will be assisting you with your legal question.

While the contract clause you have cited will allow you to alienate your interest, you all may have amended the effectiveness of the cited provision when you formed the actual trust. In other words, the wording of the trust document itself will define if you can alienate your share from the rest of the trust, or whether the trust must be completely dissolved and a distribution take place to all beneficiaries. So, in short, do you have the trust document handy?

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am credited by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Kind regards,
Zachary
TexLaw and 2 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.

I sent a follow-up question that you did not respond to. You would not like the rating I would give right now.

First of all, I'm a busy attorney and work in a firm where there is other work that I must address when it comes to my desk, so often there is a delay between my responses.

Second, I never received your message. Please send it again, as for some reason (most likely a technical glitch with the website exchange) it did not come through.
TexLaw and 2 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.


Forget it. I'll get my answer elsewhere. I gave you an OK service rating, just in case you really didn't get the last question.