(a) A contribution of a beneficial owner to the statutory trust may be in cash, property or services rendered or a promissory note or other obligation to contribute cash or property or to perform services; provided, 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 statutory trust.
(b) Except as provided in the governing instrument, a beneficial owner is obligated to the statutory trust to perform any promise to contribute cash or property or to perform services, even if the beneficial owner is unable to perform because of death, disability or any other reason. If a beneficial owner does not make the required contribution of property or services, the beneficial owner is obligated at the option of the statutory trust to contribute cash equal to that portion of the agreed value, as stated in the records of the statutory trust, of the contribution that has not been made. Such option shall be in addition to, and not in lieu of, any other rights, including the right to specific performance, that the statutory trust may have against such beneficial owner under the governing instrument or applicable law.
(c) A governing instrument may provide that the interest of any beneficial owner who fails to make any contribution that such beneficial owner is obligated to make shall be subject to specific penalties for, or set forth the specified consequences of, such failure. Such penalty or consequence may take the form of (1) reducing or eliminating the defaulting beneficial owner's proportionate interest in the statutory trust, (2) subordinating the defaulting beneficial owner's beneficial interest to that of nondefaulting beneficial owners, (3) a forced sale of the defaulting beneficial owner's beneficial interest, (4) forfeiture of the defaulting beneficial owner's beneficial interest, (5) the lending by other beneficial owners of the amount necessary to meet the defaulting beneficial owner's commitment, (6) fixing the value of the defaulting beneficial owner's beneficial interest by appraisal or by formula and redemption or sale of the defaulting beneficial owner's beneficial interest at such value, or (7) any other penalty or consequence.
(P.A. 96-271, S. 222, 254.)
History: P.A. 96-271 effective October 1, 1997.