Chapter 12. Statutory Trusts.
Subchapter I. General Provisions.
§ 29–1201.01. Short title.
This chapter may be cited as the “Uniform Statutory Trust Entity Act of 2010”.
§ 29–1201.02. Definitions.
For the purposes of the chapter, the term:
(1) “Beneficial owner” means the owner of a beneficial interest in a statutory trust or foreign statutory trust.
(2) “Certificate of trust” means the record required by § 29-1202.01. The term “certificate of trust” includes the certificate amended or restated.
(3) “Common-law trust” means a fiduciary relationship with respect to property arising from a manifestation of intent to create that relationship and subjecting the person that holds title to the property to duties to deal with the property for the benefit of charity or for one or more persons, at least one of which is not the sole trustee, whether the purpose of the trust is donative or commercial. The term “common-law trust” shall include the type of trust known at common law as a “business trust”, “Massachusetts trust”, or “Massachusetts business trust”.
(4) “Contribution”, except in the phrase “right of contribution”, means property or a benefit described in § 29-1206.03 that a person provides to a statutory trust in order to become a beneficial owner or provides in the person’s capacity as a beneficial owner.
(5) “Distribution” means a transfer of money or other property from a statutory trust as a result of a beneficial interest. The term includes transfers occurring when a statutory trust’s redeems or otherwise purchases a beneficial interest.
(6) “Foreign statutory trust” means a trust that is formed under the laws of a jurisdiction other than the District which would be a statutory trust if formed under the laws of the District.
(7) “Governing instrument” means the trust instrument and certificate of trust.
(8) “Person” means an individual, corporation, statutory trust, estate, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. The term “person” shall not include a common-law trust.
(9) “Registered foreign statutory trust” means a foreign statutory trust that is registered to do business in the District pursuant to a registration statement delivered to the Mayor for filing.
(10) “Related party”, with respect to a person that is a trustee, officer, employee, manager, or beneficial owner, means:
(A) The spouse of the party;
(B) A child, parent, sibling, grandchild, or grandparent of the party, or the spouse of one of them;
(C) An individual having the same residence as the party;
(D) A trust or estate of which a related party described in subparagraph (A), (B), or (C) of this paragraph is a substantial beneficiary;
(E) A trust, estate, legally incapacitated individual, conservatee, or minor for which the party is a fiduciary; or
(F) A person that directly or indirectly controls, is controlled by, or is under common control with, the party.
(11) “Series trust” means a statutory trust that has one or more series created under § 29-1204.01.
(12) “Statutory trust”‘ means an entity formed under this chapter or an entity that becomes subject to this chapter under Chapter 2 of this title.
(13) “Trust” includes a common-law trust, statutory trust, and foreign statutory trust.
(14) “Trust instrument” means a record other than the certificate of trust which provides for the governance of the activities and affairs of a statutory trust and the conduct of its business. The term “trust instrument” includes a trust agreement, a declaration of trust, and bylaws.
(15) “Trustee” means a person designated, appointed, or elected as a trustee of a statutory trust or foreign statutory trust in accordance with the governing instrument or applicable law.
§ 29–1201.03. Governing instrument: scope, limitations, and amendment.
(a) Except as otherwise provided in § 29-1201.04, the governing instrument shall govern the:
(1) Management, affairs, and conduct of the business of a statutory trust; and
(2) Rights, interests, duties, obligations, and powers of, and the relations among, the trustees, a person designated under subsection (e)(8) or (9) of this section, the beneficial owners, and the statutory trust.
(b) To the extent the governing instrument does not otherwise provide for a matter described in subsection (a) of this section, this chapter shall govern the matter.
(c) The governing instrument may include one or more instruments, agreements, declarations, bylaws, or other records and refer to or incorporate any record.
(d) The governing instrument may be amended with the approval of all the beneficial owners.
(e) Subject to § 29-1201.04, without limiting the terms that may be included in a governing instrument, the governing instrument may:
(1) Provide the means by which beneficial ownership is determined and evidenced;
(2) Limit a beneficial owner’s right to transfer its beneficial interest;
(3) Provide for one or more series under subchapter IV of this chapter;
(4) To the extent that voting rights are granted under the governing instrument, include terms relating to:
(A) Notice of the date, time, place, or purpose of any meeting at which any matter is to be voted on;
(B) Waiver of notice;
(C) Action by consent without a meeting;
(D) Establishment of record dates;
(E) Quorum requirements;
(F) Voting:
(i) In person;
(ii) By proxy;
(iii) By any form of communication that creates a record, telephone, or video conference; or
(iv) In any other manner; or
(G) Any other matter with respect to the exercise of the right to vote;
(5) Subject to § 29-1204.03, provide for the creation of one or more classes of trustees, beneficial owners, or beneficial interests having separate rights, powers, or duties;
(6) Subject to § 29-1204.03, provide for any action to be taken without the vote or approval of any particular trustee or beneficial owner, or classes of trustees, beneficial owners, or beneficial interests, including:
(A) Amendment of the governing instrument;
(B) Merger, conversion, interest exchange, or domestication;
(C) Appointment of trustees;
(D) Sale, lease, exchange, transfer, pledge, or other disposition of all or any part of the property of the statutory trust or the property of any series thereof; and
(E) Dissolution of the statutory trust;
(7) Provide for the creation of a statutory trust, including the creation of a statutory trust to which all or any part of the property, liabilities, profits, or losses of a statutory trust may be transferred or exchanged, and for the conversion of beneficial interests in a statutory trust, or series thereof, into beneficial interests in the new statutory trust or series thereof;
(8) Provide for the appointment, election, or engagement of agents or independent contractors of the statutory trust or delegates of the trustees, or agents, officers, employees, managers, committees, or other persons that may manage the activities and affairs of the statutory trust, designate their titles, and specify their rights, powers, and duties;
(9) Provide rights to any person, including a person that is not a party to the governing instrument;
(10) Subject to paragraph (11) of this subsection, specify the manner in which the governing instrument may be amended, including, unless waived by all persons for whose benefit the condition or requirement was intended, a:
(A) Condition that a person that is not a party to the instrument shall approve the amendment for it to be effective; and
(B) Requirement that the governing instrument may be amended only as provided in the governing instrument or as otherwise permitted by law.
(11) Provide that a person may comply with paragraph (10) of this subsection by a representative authorized by the person orally, in a record, or by conduct;
(12) Provide that a person becomes a beneficial owner, acquires a beneficial interest, and is bound by the governing instrument if the person complies with the conditions for becoming a beneficial owner set forth in the governing instrument, such as payment to the statutory trust or to a previous beneficial owner;
(13) Provide that the statutory trust or the trustees, acting for the statutory trust, hold beneficial ownership of any income earned on securities held by the statutory trust that are issued by any business entity formed, organized, or existing under the laws of any jurisdiction;
(14) Provide for the establishment of record dates;
(15) Grant to, or withhold from, a trustee or beneficial owner, or class of trustees or beneficial owners, the right to vote, separately or with any or all other trustees or beneficial owners, or class of trustees or beneficial owners, on any matter; and
(16) Limit the duration of the statutory trust.
§ 29–1201.04. Mandatory rules.
The governing instrument shall not:
(1) Vary any requirement, procedure, or other provision of this title pertaining to:
(A) Registered agents; or
(B) The Mayor, including provisions pertaining to records authorized or required to be delivered to the Mayor for filing under this title;
(2) Vary the governing law under § 29-1203.01;
(3) Negate the exclusion of a predominantly donative purpose under § 29-1203.03;
(4) Vary the provisions pertaining to series trusts in §§ 29-1204.01, 29-1204.02(b) or (c), 29-1204.03, and 29-1204.04(c);
(5) Vary the standards of conduct for trustees under § 29-1205.05, but the governing instrument may prescribe the standards by which good faith, best interests of the statutory trust, and care that a person in a similar position would reasonably believe appropriate under similar circumstances are determined, if the standards are not manifestly unreasonable;
(6) Vary the liability under § 29-1205.06 of a trustee or other person; but the governing instrument may prescribe the standards for assessing whether the reliance was reasonable, if the standards are not manifestly unreasonable;
(7) Restrict the right of a trustee to information under § 29-1205.08, but the governing instrument may prescribe the standards for assessing whether information is reasonably related to the trustee’s discharge of the trustee’s duties as trustee, if the standards are not manifestly unreasonable;
(8) Vary the prohibition under § 29-1205.09 of indemnification, advancement of expenses, or exoneration for conduct involving bad faith, willful misconduct, or reckless indifference;
(9) Vary the obligation of a trustee under § 29-1205.10(c) not to follow a direction that is manifestly contrary to the terms of the governing instrument or would constitute a serious breach of fiduciary duty by the trustee;
(10) Vary the provisions pertaining to the transfer of a beneficial interest and the power of the Superior Court under § 29-1206.06(b) through (d);
(11) Restrict the right of a beneficial owner to information under § 29-1206.08, but the governing instrument may prescribe the standards for assessing whether information is reasonably related to the beneficial owner’s interest, if the standards are not manifestly unreasonable;
(12) Restrict the right of a beneficial owner to bring an action under § 29-1206.09 or 29-1206.10, but the governing instrument may subject the right to additional standards and restrictions, including a requirement that beneficial owners owning a specified amount or type of beneficial interest, including in a series trust an interest in the series, join in bringing the action, if the additional standards and restrictions are not manifestly unreasonable;
(13) Vary the right of a beneficial owner under Chapter 2 of this title to approve a merger, interest exchange, conversion, or domestication;
(14) Vary the provisions of Subchapter [subchapter] VIII of this chapter;
(15) Vary the provisions relating to foreign statutory trusts in subchapter V of Chapter 1 of this title;
(16) Vary the miscellaneous provisions in subchapter VII of Chapter 1 of this title;
(17) Vary the rules under § 29-1206.14, if a statutory trust appoints a special litigation committee;
(18) Vary the provision pertaining to the duration of a statutory trust under § 29-1203.06(a);
(19) Vary the capacity of a statutory trust under § 29-1203.08 to sue and be sued in its own name; or
(20) Restrict the rights under this chapter of a person other than a trustee, person designated under § 29-1201.03(e)(8) and (9), or beneficial owner.
§ 29–1201.05. Applicability of trust law.
The law of the District pertaining to common-law trusts shall supplement this chapter. However, a governing instrument may supersede or modify application to the statutory trust of any law of the District pertaining to common-law trusts.
§ 29–1201.06. Rule of construction.
(a) This chapter shall be liberally construed to give maximum effect to the principle of freedom of contract and to the enforceability of governing instruments.
(b) The presumption that a civil statute in derogation of the common law is construed strictly shall not apply to this chapter.
§ 29–1201.07. Constructive notice.
A person that is not a beneficial owner is deemed to have notice of a statutory trust’s merger, interest exchange, conversion, or domestication 90 days after articles of merger, interest exchange, conversion, or domestication under subchapter VII of this chapter or Chapter 2 of this title become effective.
Subchapter II. Formation; Certificate of Trust and Other Filings; Process.
§ 29–1202.01. Certificate of trust.
(a) To form a statutory trust, a person shall deliver a certificate of trust to the Mayor for filing.
(b) A certificate of trust shall state:
(1) The name of the statutory trust, which must comply with §§ 29-103.01 and 29-103.02(i);
(2) The street and mailing address of the principal office of the trust;
(3) The name and street and mailing address of the registered agent of the trust; and
(4) If the trust may have one or more series, a statement to that effect.
(c) A certificate of trust may contain any term in addition to those required by subsection (b) of this section but may not vary or otherwise affect the provisions specified in § 29-1201.04 in a manner that is inconsistent with that section.
(d) A statutory trust is formed when the certificate of trust becomes effective.
(e) A filed certificate of trust, a filed statement of cancellation or change, or articles filed under subchapter VII of this chapter or Chapter 2 of this title prevail over inconsistent terms of a trust instrument.
§ 29–1202.02. Amendment or restatement of certificate of trust; statement of correction.
(a) A certificate of trust may be amended or restated at any time.
(b) To amend its certificate of trust, a statutory trust shall deliver to the Mayor for filing an amendment stating the:
(1) Name of the trust;
(2) Date of filing of its initial certificate; and
(3) Changes to the certificate as most recently amended or restated.
(c) To restate its certificate of trust, a statutory trust must deliver to the Mayor for filing a restatement designated as such in its heading.
(d) A trustee that knows or has reason to know that information in a filed certificate of trust was inaccurate when the certificate was filed or has become inaccurate due to changed circumstances shall promptly:
(1) Cause the certificate to be amended; or
(2) If appropriate, deliver to the Mayor for filing a statement of change under § 29-104.07 or a statement of correction under § 29-102.05.
§ 29–1202.03. Signing of records.
(a) A record delivered by the statutory trust to the Mayor for filing pursuant to this chapter shall be signed by at least one of the trustees.
(b) Any person may sign by an attorney in fact any record filed pursuant to this chapter.
§ 29–1202.04. Signing and filing pursuant to judicial order.
(a) If a person required by this title to sign a record or deliver a record to the Mayor for filing under this title does not do so, any other person that is aggrieved may petition the Superior Court to order:
(1) The person to sign the record;
(2) The person to deliver the record to the Mayor for filing; or
(3) The Mayor to file the record unsigned.
(b) If the petitioner under subsection (a) of this section is not the statutory trust to which the record pertains, the petitioner shall make the trust a party to the action.
(c) A record filed pursuant to subsection (a)(3) of this section is effective without being signed.
§ 29–1202.05. Liability for inaccurate information in filed record.
(a) If a record delivered to the Mayor for filing under this title and filed by the Mayor contains inaccurate information, a person that suffers loss by reliance on the information may recover damages for the loss from:
(1) A person that signed the record, or caused another to sign it on the person’s behalf, and knew the information to be inaccurate at the time the record was signed; and
(2) Subject to subsection (b) of this section, a trustee of a statutory trust, if:
(A) The record was delivered for filing on behalf of the trust; and
(B) The trustee had notice of the inaccuracy for a reasonably sufficient time before the information was relied upon so that, before the reliance, the trustee reasonably could have:
(i) Effected an amendment under § 29-1202.02;
(ii) Filed a petition under § 29-1202.04; or
(iii) Delivered to the Mayor for filing a statement of change under § 29-104.07 or a statement of correction under § 29-102.05.
(b) An individual who signs a record authorized or required to be filed under this title affirms under penalty of making false statements that the information stated in the record is accurate.
Subchapter III. Governing Law; Authorization; Duration; Powers.
§ 29–1203.01. Governing law.
The law of the District shall govern the:
(1) Internal affairs of a statutory trust;
(2) Liability of a beneficial owner as beneficial owner , a trustee as trustee, and a person appointed, elected, or engaged under § 29-1201.03(e)(8) or (9) for a debt, obligation, or other liability of a statutory trust or a series thereof; and
(3) Enforceability of a debt, obligation, or other liability of the statutory trust or a series thereof against the property of the trust or any series thereof.
§ 29–1203.02. Statutory trust as entity.
A statutory trust is an entity separate from its trustees and beneficial owners.
§ 29–1203.03. Permissible purposes.
(a) Except as otherwise provided in subsection (b) of this section, a statutory trust may be formed for and may have any lawful purpose, regardless of whether for profit.
(b) A statutory trust may not have a predominantly donative purpose.
§ 29–1203.04. Limitation on liability of trustees and beneficial owners.
(a) A debt, obligation, or other liability of a statutory trust or series thereof shall be solely a debt, obligation, or other liability of the trust or series thereof. A beneficial owner, trustee, or person designated pursuant to § 29-1201.03(e)(8) or (9) is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the trust or series thereof solely by reason of being or acting as a trustee, beneficial owner, or person designated pursuant to § 29-1201.03(e)(8) or (9. This subsection applies regardless of the dissolution of the statutory trust.
(b) Except as otherwise provided in subchapter IV of this chapter, property of a statutory trust held in the name of the trust or by the trustee in the trustee’s capacity as trustee shall be subject to attachment and execution to satisfy a debt, obligation, or other liability of the trust.
§ 29–1203.05. No creditor rights in trust property.
A creditor of a beneficial owner or trustee shall not obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of a statutory trust or any series thereof.
§ 29–1203.06. Duration.
(a) Except as otherwise provided in its certificate of trust, a statutory trust:
(1) Has perpetual duration; and
(2) May not be terminated or revoked except in accordance with this chapter or the terms of the trust’s certificate of trust.
(b) A series of a statutory trust may not be terminated or revoked except in accordance with this chapter or the terms of the governing instrument.
(c) The death, incapacity, dissolution, termination, or bankruptcy of a beneficial owner , trustee, or person designated under § 29-1201.03(e)(8) or (9) does not result in the termination or dissolution of a statutory trust or any series thereof.
(d) A statutory trust or any series thereof shall not terminate because the same person is the sole trustee and sole beneficial owner.
§ 29–1203.07. Power to hold property; title to trust property.
A statutory trust may hold or take title to property in its own name or in the name of a trustee in the trustee’s capacity as trustee, whether in an active, passive, or custodial capacity.
§ 29–1203.08. Power to sue and be sued.
A statutory trust may sue and be sued in its own name.
Subchapter IV. Series Trusts.
§ 29–1204.01. Statutory trust having series.
(a) The governing instrument may provide for the creation by the statutory trust of one or more series with respect to specified property of the statutory trust if:
(1) Records are maintained for the series which reasonably identify the property of the series, including by specific listing, category, type, quantity, or computational or allocational formula or procedure, such as a percentage or share of any property, or by any other method by which the identity of the property of the series is objectively determinable; and
(2) Notice that the trust may have one or more series is set forth in the certificate of trust as required by § 29-1202.01(b)(4).
(b) A series of a statutory trust shall not be an entity separate from the statutory trust.
(c) A series of a statutory trust may have a purpose, regardless of whether for profit, separate from the trust or any other series thereof if the purpose of the series is lawful and not a predominantly donative purpose.
(d) Subject to § 29-1204.03, the governing instrument may provide for the creation of one or more classes of trustees, beneficial owners, or beneficial interests having separate rights, powers, or duties with respect to the statutory trust or any series thereof.
§ 29–1204.02. Liability of series trust.
(a) In a series trust, a debt, obligation, or other liability incurred or otherwise existing [with] respect to the:
(1) Property of a particular series shall be enforceable against the property of the series only, and not against the property of the trust generally or any other series thereof; and
(2) Trust generally or the property of any other series thereof shall not be enforceable against the property of the series.
(b) The association, disassociation, or reassociation of property of a statutory trust or a series thereof to or with the trust or a series thereof, including by a transaction under subchapter VII of this chapter or Chapter 2 of this title is deemed to be a transfer between separate persons under Chapter 31 of Title 28 and a distribution under § 29-1206.15.
(c) The rules pertaining to distributions under §§ 29-1206.15 and 29-1206.16 apply to a distribution from a series trust and from the property of any series thereof, except for a distribution under § 29-1204.04.
§ 29–1204.03. Duties of trustee in series trust.
If there is at least one trustee of a series trust that, in discharging its duties, is obligated to consider the interests of the trust and all series thereof, the governing instrument may provide that one or more other trustees, in discharging their duties, may consider only the interests of the trust or one or more series thereof.
§ 29–1204.04. Dissolution of series.
(a) A series of a series trust may be dissolved or its property distributed without causing the dissolution of the trust or any other series thereof.
(b) A series of a series trust is dissolved, and its activities shall be wound up, on the occurrence of an event or circumstance that the governing instrument states causes dissolution of the series or upon the dissolution of the trust.
(c) On dissolution of a series of a series trust, the persons that under the governing instrument are responsible for winding up the affairs of the series may cause the trust to take all actions permitted under § 29-1208.03, and shall take actions with respect to the claims and obligations of the series as provided in §§ 29-1208.03 through § 29-1208.05.
(d) Any person, including a trustee, that under the governing instrument is responsible for winding up the affairs of a series of a series trust shall not be liable to the creditors of the dissolved series by reason of the person’s actions in winding up the series.
§ 29–1204.05. Claims pertaining to a series.
(a) A series of a statutory trust may not sue or be sued in its own name.
(b) If a series trust has a claim against a person which pertains to the property of a series thereof, the trust may assert the claim under § 29-1203.08 and shall allocate the proceeds of the claim under §§ 29-1204.01 and 29-1204.02.
(c) If a person has a claim against a series trust which pertains to the property of a series thereof, to assert the claim the person must bring the claim against the trust, stating that the claim pertains to the property of a series thereof and specifying the series if known. To the extent the claim succeeds and is reduced to judgment:
(1) The judgment must state that it is collectable only against the property of the specified series; and
(2) The judgment creditor may levy on the judgment only by serving the series trust, which shall satisfy the judgment by using only the property of the specified series.
Subchapter V. Trustees and Trust Management.
§ 29–1205.01. Management of statutory trust.
The activities and affairs of a statutory trust shall be managed by or under the authority of its trustees.
§ 29–1205.02. Trustee powers.
A trustee may exercise:
(1) Powers conferred by the governing instrument;
(2) Except as limited by the governing instrument, any other powers necessary or convenient to carry out the activities and affairs of the statutory trust; and
(3) Other powers conferred by this chapter.
§ 29–1205.03. Action by trustees.
On any matter that is to be acted on by trustees, the following rules apply:
(1) The trustees shall act by majority of the trustees.
(2) The trustees may act without a meeting, without previous notice, and without a vote, if the minimum number of trustees necessary to authorize or take the action at a meeting at which all trustees entitled to vote thereon were present and voted consent in a signed record. However, prompt notice of the action shall be given to those trustees that did not consent.
(3) A trustee may vote in person or by proxy, but, if by proxy, the proxy shall be in a signed record.
§ 29–1205.04. Protection of person dealing with trustee.
(a) A person that in good faith assists a trustee, or in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee’s power, shall be protected from liability as if the trustee properly exercised the power.
(b) A person that in good faith deals with a trustee need not inquire into the extent of a trustee’s power or the propriety of the exercise of the power.
(c) A person that in good faith delivers property to a trustee need not ensure its proper use.
(d) A person that in good faith and without knowledge that the trusteeship has terminated assists a former trustee as if the former trustee were still a trustee, or in good faith and for value deals with a former trustee as if the former trustee were still a trustee shall be protected from liability as if the former trustee were still a trustee.
§ 29–1205.05. Standards of conduct for trustees.
(a) Subject to § 29-1204.03, in exercising the powers of trusteeship, a trustee shall act in good faith and in a manner the trustee reasonably believes to be in the best interests of the statutory trust.
(b) A trustee shall discharge its duties with the care that a person in a similar position would reasonably believe appropriate under similar circumstances.
§ 29–1205.06. Reasonable reliance.
A trustee, officer, employee, manager, or committee of a statutory trust, or other person designated pursuant to § 29-1201.03(e)(8) or (9) is not liable to the trust or to a beneficial owner for breach of any duty, including a fiduciary duty, to the extent the breach results from reasonable reliance on:
(1) A term of the governing instrument;
(2) A record of the statutory trust; or
(3) An opinion, report, or statement of another person that the trustee reasonably believes is within the other person’s professional or expert competence and is made or delivered to the trustee, officer, employee, manager, or committee of a statutory trust or other person designated pursuant to § 29-1201.03(e)(8) or (9).
§ 29–1205.07. Interested transactions.
(a) For the purposes of this section, the term “covered party” means a trustee, officer, employee, or manager of a statutory trust, or a related party of a trustee, officer, employee, manager, or other person designated pursuant to § 29-1201.03(e)(8) or (9).
(b) Subject to subsection (c) of this section, a covered party may lend money to, borrow money from, act as a surety, guarantor, or endorser for, guarantee or assume an obligation of, provide collateral for, or do other business with the statutory trust and, subject to law other than this title, has the same rights and obligations with respect to those matters as a person that is not a covered party.
(c) A transaction described in subsection (b) of this section shall be voidable by the statutory trust unless the covered party shows that the transaction is fair to the trust.
§ 29–1205.08. Trustee’s right to information.
A trustee shall have the right to receive from a statutory trust or another trustee information relating to the affairs of the trust which is reasonably related to the trustee’s discharge of the trustee’s duties as trustee. The trustee may enforce this right by summary proceeding in the Superior Court.
§ 29–1205.09. Reimbursement, indemnification, advancement, and exoneration.
(a) A statutory trust shall reimburse a trustee for any payment made by the trustee in the course of the trustee’s activities on behalf of the statutory trust, if the trustee complied with §§ 29-1205.05 and 29-1206.15 in making the payment.
(b) A statutory trust may indemnify and hold harmless a trustee, beneficial owner, or person designated pursuant to § 29-1201.03(e)(8) or (9) with respect to any claim or demand against the person by reason of the person’s relationship with the trust if the claim or demand does not arise from the person’s bad faith, willful misconduct, or reckless indifference.
(c) Expenses, including reasonable attorneys’ fees and costs, incurred by a trustee, beneficial owner, or person designated pursuant to § 29-1201.03(e)(8) or (9) in connection with a claim or demand against the person by reason of the person’s relationship to a statutory trust may be paid by the trust before the final disposition of the claim or demand, upon an undertaking by or on behalf of the person to repay the trust if the person is ultimately determined not to be entitled to be indemnified under subsection (b) of this section.
(d) A term in the governing instrument relieving or exonerating a trustee or person designated pursuant to § 29-1201.03(e)(8) or (9) from liability is unenforceable to the extent it relieves or exonerates the trustee from liability for conduct involving bad faith, willful misconduct, or reckless indifference.
(e) A statutory trust may purchase and maintain insurance on behalf of a trustee, person designated under § 29-1201.03(e)(8) or (9), or beneficial owner of the trust, against any liability asserted against or incurred by the trustee, person, or beneficial owner in that capacity, or arising from that status. The purchase and maintenance of insurance may occur even if, under § 29-1201.04(9), the trust instrument cannot limit or eliminate a person’s liability to the trust for the conduct giving rise to the liability.
§ 29–1205.10. Direction of trustees.
(a) The governing instrument may authorize any person, including a beneficial owner, to direct a trustee or other person in the management of a statutory trust.
(b) The governing instrument may provide that the power to direct a trustee or other person or the exercise of the power by any person, including a beneficial owner, shall not cause the person to be a trustee or impose on the person duties, including fiduciary duties, or liabilities relating to these duties, to a statutory trust or beneficial owner.
(c) If the governing instrument confers on a person a power to direct actions by a trustee or other person, the trustee or other person shall act in accordance with an exercise of the power, unless the direction is manifestly contrary to the terms of the governing instrument or the trustee knows or has reason to know that following the direction would constitute a serious breach of fiduciary duty by the trustee.
§ 29–1205.11. Delegation by trustee.
(a) A trustee may delegate duties and powers. The trustee shall exercise the care a person in a similar position would reasonably believe appropriate under similar circumstances in:
(1) Selecting an agent;
(2) Establishing the scope and terms of the delegation; and
(3) Periodically reviewing the agent’s actions to monitor the agent’s performance and compliance with the terms of the delegation.
(b) Subject to subsection (a) of this section, a trustee may delegate duties and powers to a co-trustee.
(c) In performing a delegated function, an agent of a trustee shall owe a duty to the statutory trust to exercise reasonable care to comply with the terms of the delegation.
(d) A trustee that complies with subsection (a) of this section shall not be liable to a beneficial owner or to the statutory trust for an act or omission of the agent of the trustee to which a function was delegated.
(e) An agent of a trustee submits to the jurisdiction of the courts of the District by accepting a delegation of powers or duties from a trustee with respect to a claim related to the agency.
§ 29–1205.12. Independent trustee in registered investment company.
(a) For the purposes of this section, the term “affiliated person” and “interested person” have the meanings as provided in section 2(3) and (19) of the Investment Company Act of 1940, (54 Stat. 790; 15 U.S.C. § 80a-2(3) and (19)), and any regulations issued thereunder.
(b) If a statutory trust is registered as an investment company under the Investment Company Act of 1940, approved August 22, 1940 (54 Stat. 789; 15 U.S.C. § 80a-1 et seq.), or any successor statute and any regulations issued thereunder, a trustee shall be an independent trustee for all purposes under this chapter if the trustee shall is not an [sic] interested person of the trust. The receipt of compensation both for service as an independent trustee of the trust and for service as an independent trustee of one or more other investment companies managed by a single investment adviser or an affiliated person of an investment adviser, shall not affect the status of the trustee as an independent trustee under this section.
Subchapter VI. Beneficial Owners.
§ 29–1206.01. Beneficial interest.
(a) A beneficial interest in a statutory trust is personal property.
(b) A beneficial interest in a statutory trust shall not be an interest in specific property of the statutory trust.
(c) A beneficial owner shall not have a preemptive right to subscribe to any additional issue of beneficial interests or any other interest of a statutory trust.
§ 29–1206.02. Voting or consent by beneficial owners.
On any matter that is to be acted on by beneficial owners, the following rules apply:
(1) The beneficial owners shall act by majority of the beneficial interests.
(2) The beneficial owners may take the action without a meeting, without notice, and without a vote, if beneficial owners having at least the minimum number of votes necessary to authorize or take the action at a meeting at which all beneficial owners entitled to vote thereon were present and voted consent in a signed record. However, prompt notice of the action shall be given to those beneficial owners that did not consent.
(3) A beneficial owner may vote in person or by proxy, but if by proxy, the proxy shall be contained in a signed record.
§ 29–1206.03. Contribution by beneficial owner.
(a) A contribution of a beneficial owner to a statutory trust may consist of property transferred, services performed, or another benefit provided to the statutory trust, or an agreement to transfer property, perform services, or provide another benefit. A person may become a beneficial owner of a statutory trust and may receive a beneficial interest in a statutory trust without making a contribution or being obligated to make a contribution to the trust.
(b) A person’s obligation to contribute money or other property or other benefit to, or to perform services for, a statutory trust is not excused by the person’s death, disability, or other inability to perform the person’s obligations personally. If a person does not fulfill an obligation to make a contribution, other than a monetary contribution, the person is obligated at the option of the trustee to contribute money equal to the value of the part of the contribution which has not been made.
(c) The governing instrument may provide that a beneficial owner that fails to make a required contribution, or comply with the terms and conditions of the governing instrument, shall be subject to specified penalties for or consequences of the failure, including:
(1) Reduction or elimination of the defaulting beneficial owner’s proportionate interest in the statutory trust or series thereof;
(2) Subordination of the defaulting beneficial owner’s beneficial interest to that of nondefaulting beneficial owners;
(3) Forced sale or forfeiture of the defaulting beneficial owner’s beneficial interest;
(4) Imposition of an obligation to repay a loan to the statutory trust by another beneficial owner of the amount necessary to meet the defaulting beneficial owner’s commitment;
(5) Redemption or sale of the defaulting beneficial owner’s beneficial interest at a value fixed by appraisal or by formula; and
(6) Specific performance of an obligation under the governing instrument.
§ 29–1206.04. Distribution to beneficial owner.
(a) When a beneficial owner becomes entitled to receive a distribution, with respect to the distribution, the beneficial owner shall have the status of, and shall be entitled to all remedies available to, a creditor of the statutory trust.
(b) A beneficial owner has a right to a distribution before the dissolution and winding up of a statutory trust only if the trustee decides to make an interim distribution. A beneficial owner shall not have a right to demand or to receive a distribution from the trust in any form other than money.
(c) Except as otherwise provided in § 29-1208.03(b), the trust may distribute an asset in kind if each part of the asset is fungible with each other part and each beneficial owner receives a percentage of the asset equal in value to the beneficial owner’s share of the distribution.
(d) Any distributions made by a statutory trust before its dissolution and winding up must be in proportion to the beneficial interests.
§ 29–1206.05. Redemption of beneficial interest.
A statutory trust may acquire, by purchase, redemption, or otherwise, any beneficial interest in the trust or series thereof. A beneficial interest acquired under this section shall be canceled.
§ 29–1206.06. Transfer of beneficial interest.
(a) For the purposes of this section, “covered creditor” means a judgment creditor of a beneficial owner or a person to which a beneficial interest has been transferred by operation of law.
(b) Except as otherwise provided in the governing instrument, a beneficial interest in a statutory trust is freely transferable.
(c) The governing instrument may not limit the transferability of a beneficial interest if the same person is the sole trustee and sole beneficial owner.
(d) If a beneficial interest is not freely transferable by a beneficial owner such that a transferee may become a beneficial owner without further requirement except notice to the statutory trust, the following rules apply:
(1) On petition by a covered creditor, the Superior Court may authorize the petitioner to reach the beneficial owner’s interest by attachment of present or future distributions to or for the benefit of the beneficial owner or by other means. The court may limit the award to relief that is appropriate under the circumstances.
(2) On petition by a covered creditor, to the extent a trustee has not complied with a standard of distribution provided in the governing instrument or has abused the trustee’s discretion to make a distribution, the Superior Court:
(A) May order a distribution to the benefit of the petitioner; and
(B) If a distribution is ordered, shall direct the trustee to pay to the petitioner an equitable amount but not more than the amount the trustee would have been required to distribute to or for the benefit of the beneficial owner if the trustee had complied with the standard or had not abused the discretion.
§ 29–1206.07. Transaction with beneficial owner.
Subject to § 29-1205.07, a beneficial owner or related party of a beneficial owner may lend money to, borrow money from, act as a surety, guarantor, or endorser for, guarantee or assume an obligation of, provide collateral for, or do other business with the statutory trust and, subject to law other than this chapter, shall have the same rights and obligations with respect to a matter as a person that is not a beneficial owner.
§ 29–1206.08. Beneficial owner’s right to information.
A beneficial owner shall have the right to receive from the statutory trust or a trustee information relating to the affairs of a statutory trust which is reasonably related to the beneficial owner’s interest. The beneficial owner may enforce this right by summary proceeding in the Superior Court.
§ 29–1206.09. Direct action by beneficial owner.
A beneficial owner may maintain a direct action against a statutory trust to redress an injury sustained by, or to enforce a duty owed to, the beneficial owner only if the owner can plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the statutory trust.
§ 29–1206.10. Derivative action by beneficial owner.
A beneficial owner may maintain a derivative action to enforce a right of a statutory trust if:
(1) The beneficial owner first makes a demand on the trustees, requesting that the trustees cause the trust to bring an action to redress the injury or enforce the right, and the trustees do not bring the action within a reasonable time; or
(2) A demand would be futile.
§ 29–1206.11. Proper plaintiff.
A derivative action to enforce a right of a statutory trust may be maintained only by a person that is a beneficial owner at the time the action is commenced and:
(1) Was a beneficial owner when the conduct giving rise to the action occurred; or
(2) Whose status as a beneficial owner devolved upon the person by operation of law or pursuant to the terms of the governing instrument from a person that was a beneficial owner at the time of the conduct.
§ 29–1206.12. Pleading.
In a derivative action to enforce a right of a statutory trust, the complaint shall state with particularity the:
(1) Date and content of the plaintiff’s demand and the trustees’ response to the demand; or
(2) Reason the demand should be excused as futile.
§ 29–1206.13. Proceeds and expenses.
(a) Except as otherwise provided in subsection (b) of this section:
(1) Any proceeds or other benefits of a derivative action on behalf of a statutory trust, whether by judgment, compromise, or settlement belong to the trust and not to the plaintiff; and
(2) If the plaintiff receives any proceeds, the plaintiff shall immediately remit them to the trust.
(b) If a derivative action on behalf of a statutory trust is successful in whole or in part, the court may award the plaintiff reasonable attorneys’ fees, costs, and other expenses from the recovery by the trust.
(c) A derivative action on behalf of a statutory trust shall not be voluntarily dismissed or settled without the court’s approval.
§ 29–1206.14. Special litigation committee.
(a) If a statutory trust is named as or made a party in a derivative proceeding, the trust may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the trust. If the trust appoints a special litigation committee, on motion by the committee made in the name of the trust, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to complete its investigation. This subsection does not prevent the court from enforcing a person’s right to information under § 29-1205.08 or § 29-1206.08, for good cause shown, granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.
(b) A special litigation committee may be composed of one or more disinterested and independent individuals, who may be trustees.
(c) A special litigation committee may be appointed:
(1) By a majority of the trustees not named as defendants or plaintiffs in the proceeding; and
(2) If all trustees are named as defendants or plaintiffs in the proceeding, by a majority of the trustees named as defendants.
(d) After appropriate investigation, a special litigation committee may determine that it is in the best interests of the statutory trust that the proceeding:
(1) Continue under the control of the plaintiff;
(2) Continue under the control of the committee;
(3) Be settled on terms approved by the committee; or
(4) Be dismissed.
(e) After making a determination under subsection (d) of this section, a special litigation committee shall file with the court a statement of its determination and its report supporting its determination and shall serve each party with a copy of the determination and report. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered under subsection (a) of this section and allow the action to proceed under the direction of the plaintiff.
§ 29–1206.15. Limitations on distributions.
(a) A statutory trust may not make a distribution, including a distribution under § 29-1208.03(b)(2), if after the distribution:
(1) The trust would not be able to pay its debts as they become due in the ordinary course of the trust’s activities and affairs; or
(2) The trust’s 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 trust were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights upon dissolution and winding up of beneficial owners and transferees whose preferential rights are superior to the right to receive distributions of the persons receiving the distribution.
(b) A trustee may base a determination that a distribution is not prohibited under subsection (a) of this section on:
(1) Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or
(2) A fair valuation or other method that is reasonable under the circumstances.
(c) Except as otherwise provided in subsection (e) of this section, the effect of a distribution under subsection (a) of this section is measured:
(1) In the case of a distribution by purchase, redemption, or other acquisition of a beneficial interest, as of the earlier of the date:
(A) Money or other property is transferred or debt is incurred by the trust; or
(B) The person entitled to the distribution ceases to own the interest or rights being acquired by the trust in return for the distribution;
(2) In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and
(3) In all other cases, as of the date:
(A) The distribution is authorized, if the payment occurs not later than 120 days after that date; or
(B) The payment is made, if the payment occurs more than 120 days after the distribution is authorized.
(d) A statutory trust’s indebtedness to a beneficial owner or transferee incurred by reason of a distribution made in accordance with this section is at parity with the trust’s indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement.
(e) A statutory trust’s indebtedness, including indebtedness issued as a distribution, is not a liability for purposes of subsection (a) of this section if the terms of the indebtedness provide that payment of principal and interest are made only if and to the extent that payment of a distribution could then be made under this section. If indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made.
(f) In measuring the effect of a distribution under § 29-1208.03(b)(2), the debts, obligations, and other liabilities of a dissolved statutory trust do not include any claim that has been disposed of under § 29-1208.04, 29-1208.05, or 29-1208.06.
§ 29–1206.16. Liability for improper distributions.
(a) If a trustee of a statutory trust consents to a distribution made in violation of § 29-1206.15 and in consenting to the distribution fails to comply with § 29-1205.05, the trustee is personally liable to the trust or the series thereof for the amount of the distribution which exceeds the amount that could have been distributed in accordance with § 29-1206.15.
(b) A person that receives a distribution knowing that the distribution was made in violation of § 29-1206.15 is personally liable to the statutory trust or series thereof, but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under § 29-1206.15.
(c) A person against which an action is commenced because the person is liable under subsection (a) or (b) of this section may implead:
(1) Any other person that is liable under subsection (a) of this section and seek to enforce a right of contribution from that person; and
(2) Any person that received a distribution in violation of subsection (c) of this section and seek to enforce a right of contribution from that person in the amount the person received in violation of subsection (c) of this section.
(d) An action under this section is barred if not commenced not later than 2 years after the distribution.
Subchapter VII. Merger.
§ 29–1207.01. Definitions.
For the purposes of this subchapter, the term:
(1) “Constituent statutory trust” means a statutory trust that is party to a merger.
(2) “Governing law” means the law that governs the organization’s internal affairs.
(3)(A) “Organization” means:
(i) A common-law trust that does not have a predominantly donative purpose;
(ii) General partnership, including a limited liability partnership;
(iii) Limited partnership, including a limited liability limited partnership;
(iv) Limited liability company;
(v) Corporation; or
(vi) Foreign statutory trust.
(B) The term “organization” shall include a domestic or foreign organization whether or not organized for profit.
(4) “Organizational documents” means the records that create an organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it.
(5) “Surviving organization” means an organization into which one or more other organizations are merged, whether the surviving organization preexisted the merger or was created by the merger.
§ 29–1207.02. Merger.
(a) A statutory trust may merge with one or more other constituent organizations pursuant to this section, §§ 29-1207.03 through 29-1207.05, and a plan of merger if:
(1) The merger is not prohibited by the governing law of any constituent organization; and
(2) Each of the other organizations complies with its governing law in effecting the merger.
(b) A plan of merger shall be in a record and shall include:
(1) The name and form of each constituent organization;
(2) The name and form of the surviving organization and, if the surviving organization is to be created by the merger, a statement to that effect;
(3) The terms and conditions of the merger, including the manner and basis for converting or exchanging the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration;
(4) If the surviving organization is to be created by the merger, the surviving organization’s organizational documents; and
(5) If the surviving organization is not to be created by the merger, any amendments to be made by the merger to the surviving organization’s organizational documents.
§ 29–1207.03. Action on plan of merger by constituent statutory trust.
(a) A plan of merger shall be consented to by all trustees and all beneficial owners of a constituent statutory trust.
(b) After a merger is approved, and at any time before a filing is made under § 29-1207.04, a constituent statutory trust may amend the plan or abandon the planned merger:
(1) As provided in the plan; and
(2) Except as prohibited by the plan, with the same consent as was required to approve the plan.
§ 29–1207.04. Filings required for merger; effective date.
(a) After each constituent organization has approved a merger, articles of merger shall be signed on behalf of each:
(1) Constituent statutory trust, by one or more trustees or other authorized representative; and
(2) Other constituent organization, by an authorized representative.
(b) Articles of merger under this section shall include:
(1) The name and form of each constituent organization and the jurisdiction of its governing law;
(2) The name and form of the surviving organization, the jurisdiction of its governing law, and, if the surviving organization is created by the merger, a statement to that effect;
(3) If the surviving organization is to be created by the merger:
(A) If it will be a statutory trust, the trust’s certificate of trust; or
(B) If it will be an organization other than a statutory trust, the organizational document that creates the organization;
(4) If the surviving organization preexisted the merger, any amendments provided for in the plan of merger for the organizational document that created the organization;
(5) A statement as to each constituent organization that the merger was approved as required by the organization’s governing law;
(6) If the surviving organization is a foreign organization not authorized to do business in the District, the street and mailing address of an office that the Mayor may use for the purposes of § 29-1207.05(b); and
(7) Any additional information required by the governing law of any constituent organization.
(c) The articles of merger shall be delivered to the office of the Mayor for filing.
(d) A merger shall be effective under this chapter:
(1) If the surviving organization is a statutory trust, upon the later of:
(A) Filing of the articles of merger by the Mayor; or
(B) Subject to § 29-102.03, as specified in the articles of merger; or
(2) If the surviving organization is not a statutory trust, as provided by the governing law of the surviving organization[.]
§ 29–1207.05. Effect of merger.
(a) When a merger becomes effective:
(1) The surviving organization shall continue or comes into existence;
(2) Each constituent organization that merges with the surviving organization shall cease to exist as a separate organization;
(3) All property owned by each constituent organization that ceases to exist shall vest in the surviving organization;
(4) All debts, obligations, and other liabilities of each constituent organization that ceases to exist, including those existing with respect to the property of a series thereof, shall continue as debts, obligations, or other liabilities of the surviving organization limited to the property thereof as provided for by the plan of merger and the governing law of the surviving organization;
(5) An action or proceeding pending by or against any constituent organization that ceases to exist shall continue as if the merger had not occurred;
(6) Except as prohibited by law other than this chapter, all rights, privileges, immunities, powers, and purposes of each constituent organization that ceases to exist shall vest in the surviving organization;
(7) Except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger shall take effect;
(8) If the surviving organization is created by the merger and:
(A) If it is a statutory trust, the certificate of trust becomes effective; or
(B) If it is an organization other than a statutory trust, the organizational document that creates the organization shall become effective; and
(9) If the surviving organization preexisted the merger, any amendment provided for in the articles of merger for the organizational document that created the organization shall become effective.
(b) A surviving organization that is a foreign organization consents to the jurisdiction of the courts of the District to enforce any debt, obligation, or other liability owed by a constituent organization if, before the merger, the constituent organization was subject to suit in the District on the obligation. A surviving organization that is a foreign organization not authorized to do business in the District may be served in accordance with § 29-104.12.
§ 29–1207.06. Chapter not exclusive.
This chapter shall not preclude an organization from being merged under law other than this chapter.
Subchapter VIII. Dissolution and Winding Up.
§ 29–1208.01. Events causing dissolution.
A statutory trust shall be dissolved only by:
(1) An administrative dissolution under §§ 29-106.01 and 29-106.02; or
(2) The filing of articles of dissolution under § 29-1208.02:
(A) As provided in the certificate of trust; or
(B) With the approval of all the beneficial owners.
§ 29–1208.02. Articles of dissolution.
(a) If dissolution of a statutory trust is authorized under § 29-1208.01, the trust shall deliver to the Mayor for filing articles of dissolution setting forth the:
(1) Name of the trust; and
(2) Date of the dissolution.
(b) Except as otherwise provided in § 29-102.03, a statutory trust is dissolved when articles of dissolution that comply with subsection (a) of this section, are filed by the Mayor.
§ 29–1208.03. Winding up.
(a) A dissolved statutory trust shall wind up its activities and the trust and each series thereof shall continue after dissolution only for the purpose of its winding up.
(b) In winding up its activities, a statutory trust shall:
(1) Discharge the trust’s debts, obligations, and other liabilities, settle and close the trust’s activities, and marshal and distribute the property of the trust; and
(2) Distribute any surplus property after complying with paragraph (1) of this subsection to the beneficial owners in proportion to their beneficial interests.
(c) In winding up its activities, a statutory trust may:
(1) Preserve the trust’s activities and property as a going concern for a reasonable time;
(2) Institute, maintain, and defend actions and proceedings, whether civil, criminal, or administrative;
(3) Transfer the trust’s property;
(4) Settle disputes; and
(5) Perform other acts necessary or appropriate to its winding up.
(d) Trustees of a dissolved statutory trust that has disposed of claims under § 29-1208.04 or § 29-1208.05 shall not be liable for breach of duty with respect to claims against the trust that are barred or satisfied under § 29-1208.04 or § 29-1208.05.
(e) The dissolution of a statutory trust shall not terminate the authority of its registered agent.
(f) On application of any person that shows good cause, the Superior Court may appoint a person to be a receiver for a dissolved statutory trust with the power to undertake any action that might have been done by the trust during its winding up if the action is necessary for final settlement of the trust.
§ 29–1208.04. Known claims against dissolved statutory trust.
(a) Except as otherwise provided in subsection (c) of this section, a dissolved statutory trust may give notice of a known claim which has the effect provided in subsection (b) of this section. The trust may, in a record, notify its known claimants of the dissolution. The notice shall:
(1) Specify the information required to be included in the claim;
(2) Provide a mailing address to which the claim is to be sent;
(3) State the deadline for receipt of the claim, which shall not be less than 120 days after the date the notice is sent to the claimant; and
(4) State that the claim will be barred if not received by the deadline.
(b) A claim against a dissolved statutory trust is barred if the requirements of subsection (a) of this section are met and:
(1) The claim is not received by the specified deadline; or
(2) If the claim is timely received but rejected by the trust:
(A) The trust notifies the claimant in a record that the claim is rejected and will be barred unless the claimant commences an action against the trust to enforce the claim not later than the 90th day after the claimant receives the notice; and
(B) The claimant does not commence the required action not later than the 90th day.
(c) This section shall not apply to a claim based on:
(1) An event occurring after the effective date of dissolution; or
(2) A liability that on that date is contingent.
§ 29–1208.05. Other claims against dissolved statutory trust.
(a) A dissolved statutory trust may publish notice of its dissolution and request persons having claims against the trust to present them in accordance with the notice.
(b) A notice under subsection (a) of this section shall:
(1) Be published at least once in a newspaper of general circulation in the District or, if it has no principal office in the District, in the city in which the trust’s principal office is or was last located;
(2) Describe the information required for a claim;
(3) Provide a mailing address to which the claim may be sent; and
(4) State that a claim against the trust shall be barred unless an action to enforce the claim is commenced not later than 3 years after publication of the notice.
(c) If a dissolved statutory trust publishes a notice in accordance with subsection (b) of this section, the claim of each of the following claimants is barred unless the claimant commences an action to enforce a claim against the trust not later than 3 years after the publication date of the notice:
(1) A claimant that did not receive notice in a record under § 29-1208.04;
(2) A claimant whose claim was timely sent to the trust but was rejected or not acted on; and
(3) A claimant whose claim is contingent at, or based on an event occurring after, the effective date of dissolution.
(d) A claim not barred under this section or § 29-1208.04 may be enforced against:
(1) A dissolved statutory trust, to the extent of its undistributed property; and
(2) A beneficial owner, except as provided in § 29-1208.06, if property of the trust has been distributed after dissolution, against a beneficial owner to the extent of that person’s proportionate share of the claim or property distributed to the beneficial owner after dissolution, whichever is less.
(e) A person’s total liability for all claims under subsection (d)(2) of this section does not exceed the total amount of assets distributed to the person after dissolution.
§ 29–1208.06. Court proceedings.
(a) A dissolved statutory trust that has published a notice under § 29-1208.05 may file an application with the Superior Court, or, if the principal office is not located in the District, in the appropriate court where the office of its principal office is located, for a determination of the amount and form of security to be provided for payment of claims that are contingent or have not been made known to the dissolved trust or that are based on an event occurring after the effective date of dissolution but which, based on the facts known to the dissolved trust, are reasonably expected to arise after the effective date of dissolution. Provision need not be made for any claim that is or is reasonably anticipated to be barred under § 29-1208.05(c).
(b) Notice of the proceeding must be given by the dissolved statutory trust to each claimant holding a contingent claim whose contingent claim is shown on the records of the dissolved trust not later than 10 days after the filing of the application under subsection (a) of this section.
(c) The Superior Court may appoint a guardian ad litem to represent all claimants whose identities are unknown in any proceeding brought under this section. The reasonable fees and expenses of the guardian, including reasonable expert witness fees, must be paid by the dissolved statutory trust.
(d) Provision by the dissolved statutory trust for security in the amount and the form ordered by the court under subsection (a) of this section satisfies the dissolved trust’s obligations with respect to claims that are contingent, have not been made known to the dissolved trust, or are based on an event occurring after the effective date of dissolution, and such claims may not be enforced against a beneficial owner that received assets in liquidation.
Subchapter IX. Transition Provisions.
§ 29–1209.01. Application to existing relationships.
(a) This chapter shall not limit, prohibit, or invalidate the existence, acts, or obligations of any common-law trust created or doing business in the District before or after the applicability date of this chapter. The laws of the District other than this chapter pertaining to trusts shall apply to common-law trusts.
(b) A common-law trust arising under the law of the District before or after the applicability date of this chapter that does not have a prevailingly donative purpose may elect to be governed by this chapter by filing of a certificate of trust under § 29-1202.01.
(c) A trust created pursuant to a statute of the District that was required by that statute to file a certificate of trust with the Mayor before the applicability date of this chapter may elect to be governed by this chapter by filing an amendment to its certificate of trust under § 29-1202.02.
(d) On and after one year after the applicability date of this chapter, this chapter shall govern the organization and internal affairs of all trusts created pursuant to a statute of the District that was required by that statute to file a certificate of trust with the Mayor before the applicability date of this chapter.
