Directives

Directives

Directives from the Commissioner

The Order of Administration, which sets out the authorities of the Receiver, provides a number of actions which the Receiver may take upon the approval of the Commissioner of Banks and Real Estate. The Receiver has requested such approvals on a number of matters from the Commissioner and has received such approvals, in the form of Directives. These Directives are reproduced below:

Directive No. 1 - Court approves resumption of trading in accounts. HTML / PDF

Directive No. 2 - Guidelines for cash withdrawals. HTML / PDF

Directive No. 3 - Guidelines for Permission to withdraw Preclosing CTF. HTML / PDF

Directive No. 4 - Definition of Preclosing Trust Assets. HTML / PDF

Directive No. 5 - Directive regarding Land Trusts HTML / PDF

Directive No. 1 - Court approves resumption of trading in accounts.

PRICEWATERHOUSECOOPERS LLP, AS RECEIVER
FOR INDEPENDENT TRUST CORPORATION

April 17, 2000

VIA FACSIMILE

TO: Commissioner of Banks and Real Estate ("Commissioner")
RE: Request for Direction No. 1

BACKGROUND: As of the commencement of the receivership of Independent Trust Corporation ("Intrust"), numerous accountholders of Intrust ("Accountholders") held in their accounts securities not constituting cash and constituting various forms of interests in various forms of entities ("Securities"). Pursuant to the Order of Administration entered by the Cook County Circuit Court on April 14, 2000 ("Order"), in connection with the commencement of insolvency proceedings against Intrust, PricewaterhouseCoopers as receiver for Intrust ("Receiver") is not authorized, prior to completion of certain investigations and entry of appropriate court orders, to permit sales or trades of Securities unless directed otherwise by the Commissioner or his authorized agent.

Based on a preliminary examination of the accounts, the Receiver believes that it is appropriate to permit sales or trades of Securities under the circumstances described below.

REQUEST FOR DIRECTION: The Receiver requests the Commissioner to give the Receiver the following direction:

The Receiver shall permit any Accountholder to sell or otherwise dispose of any Security ("Sale Security") that is in the Accountholder's account at Intrust and that constitutes a Preclosing Trust Asset (as defined in the Order) to the same extent the Accountholder would have been entitled to direct Intrust to sell or otherwise dispose of the Security if no receivership proceeding were in effect, if all of the proceeds of the Sale Security ("Proceeds") are deposited in account(s) or sub-accounts as a Preclosing Trust Asset entirely under the control of the Receiver.

The Receiver shall permit any Accountholder to use Proceeds (and not any Preclosing CTF as defined in the Order) to purchase or otherwise acquire any other Security ("Purchased Security") to the same extent the Accountholder would have been entitled to direct Intrust to purchase or otherwise acquire the Security if no receivership proceeding were in effect, if all of the Purchased Securities are deposited in account(s) or sub-accounts as a Preclosing Trust Asset entirely under the control of the Receiver.

Approved by the Commissioner April 17, 2000.

Directive No. 2 - Guidelines for cash withdrawals.

PRICEWATERHOUSECOOPERS LLP, AS RECEIVER
FOR INDEPENDENT TRUST CORPORATION

April 17, 2000

VIA FACSIMILE

TO: Commissioner of Banks and Real Estate ("Commissioner")
RE: Request for Direction No. 2

Based on a preliminary examination of the accounts, the Receiver believes that it is appropriate to permit sales or trades of Securities that permit the Accountholders to obtain control over the Securities under the circumstances described below.

REQUEST FOR DIRECTION: The Receiver requests the Commissioner to give the Receiver the following direction:

The Receiver shall permit any Accountholder to liquidate any Security that is in the Accountholder's account at Intrust and that constitutes a Preclosing Trust Asset (as defined in the Order) ("Sale Security"), and withdraw the cash proceeds thereof, to the same extent the Accountholder would have been entitled to direct Intrust to withdraw the proceeds if no receivership proceeding were in effect, if all of the following conditions are met:

After giving effect to the withdrawal, the value of the Securities remaining in the Accountholder's Account is at least 50% of the value of all of the Securities in the Account as of the close of business on April 14, 2000. In determining value, the Receiver shall be entitled to use any valuation method that the Receiver in reasonable good faith deems appropriate; provided that, with respect to Securities that are traded on a widely recognized market, the value shall presumptively be derived from the sale price quoted for such Securities as of the end of the day on April 14, 2000.
The Accountholder has provided the Receiver with a written statement demonstrating to the Receiver's reasonable satisfaction that failure to allow withdrawal will create an undue hardship on the Accountholder.

Approved by the Commissioner April 17, 2000.

Directive No. 3 - Guidelines Permission to withdraw Preclosing CTF.

PRICEWATERHOUSECOOPERS LLP, AS RECEIVER
FOR INDEPENDENT TRUST CORPORATION

April 18, 2000

VIA FACSIMILE

TO: Commissioner of Banks and Real Estate ("Commissioner")
RE: Request for Direction No. 3

BACKGROUND: As of the commencement of the receivership of Independent Trust Corporation ("Intrust"), numerous accountholders of Intrust ("Accountholders") held cash in their accounts. Pursuant to the Order of Administration entered by the Cook County Circuit Court on April 14, 2000 ("Order"), in connection with the dissolution of Intrust, PricewaterhouseCoopers as receiver for Intrust ("Receiver") is not authorized, prior to completion of certain investigations and entry of appropriate court orders, to permit Accountholders to withdraw cash from their accounts unless directed otherwise by the Commissioner or his authorized agent.

Based on a preliminary examination of the accounts, the Receiver believes that it is appropriate to permit Accountholders to withdraw cash from their accounts under the circumstances described below.

REQUEST FOR DIRECTION: The Receiver requests the Commissioner to give the Receiver the following direction:

The Receiver shall permit any Accountholder to withdraw Preclosing CTF (as defined in the Order) (or the proceeds of Preclosing CTF) to the same extent the Accountholder would have been entitled to direct Intrust to withdraw this cash if no receivership proceeding were in effect, if all of the following conditions are met:

After giving effect to the withdrawal, the amount of Preclosing CTF remaining in the Accountholder's account is at least 70% of the cash balance in the account as of the close of business on April 14, 2000.

The Accountholder has provided the Receiver with a written statement demonstrating to the Receiver's reasonable satisfaction that failure to allow withdrawal will create an undue hardship on the Accountholder.

For purposes of determining undue hardship under paragraph 2 and in Request for Direction No. 2, the Receiver shall exercise its reasonable good faith discretion. The following circumstances shall presumptively constitute hardship:

The cash is necessary to pay ordinary course living expenses, tuition bills, child support or alimony;

The Accountholder needs the funds to pay for healthcare expenses;

The Accountholder needs the funds for the payment of Federal or State Income Tax obligations;

The Accountholder needs the funds distributed back to the Accountholder from IRA, Deferred Compensation or other Qualified Plans in order to avoid making excess contributions and avoid the incident of tax penalties;

The Accountholder needs the funds disbursed for the payment of life insurance premiums and for the purposes of this section 3(e) only, the value of the securities remaining in the Accountholders account and the value of the Preclosing CTF remaining in the Accountholders account will be ignored; or

The Accountholder needs the funds disbursed for the payment of funeral expenses or federal, estate, gift or generation skipping taxes incident to death.

Approved by the Commissioner April 20, 2000.

Directive No. 4 - Definition of Preclosing Trust Assets .

PRICEWATERHOUSECOOPERS LLP, AS RECEIVER
FOR INDEPEDNENT TRUST CORPORATION a/k/a INTRUST

April 18, 2000

VIA FACSIMLE
TO: Commissioner of Banks and Real Estate ("Commissioner")
RE: Request for Direction No. 4

BACKGROUND: As we discussed, the Receiver has recently received a request from counsel for Schwab for clarification of the intent of Commissioner's Direction No. 1 to the Receiver and the Order of Administration entered on April 14, 2000 ("Order"). Schwab has asked for guidance regarding whether the custodial accounts held by Schwab for Intrust customers constitute "Preclosing Trust Assets" under the Order, and whether disbursements and transfers of cash held in the Schwab custodial accounts are prohibited as "Preclosing CTF" (under the Order) or may be considered a "Security" under Commissioner Direction No. 1. Schwab has indicated that it will not permit trading in Schwab accounts by customers until guidance is obtained. The Receiver anticipates that similar requests for guidance may be forthcoming from other brokerage firms such as Schwab.

It is the Receiver's understanding that some Intrust customers (primarily IRA account holders) hold their accounts with Schwab, and the Schwab accounts contain cash, as well as other marketable investments. Intrust's books appear to record the customer's asset as merely an investment in a Schwab IRA account (or other similar account), and do not list the asset as cash, securities, or other components that are actually held at Schwab.

REQUEST FOR DIRECTION: The Receiver requests the Commissioner's concurrence and direction as follows:

For the purpose of operations under the Order, Preclosing Trust Assets includes assets held in custodial arrangements with Schwab and other brokers for the benefit of Intrust customers.
For the purpose of operations under the Order, cash and investments held by Schwab and other brokers in custodial accounts for Intrust customers shall not be considered "Preclosing CTF," but instead shall be considered as an investment and treated as a Security within the scope of Commissioner's Direction No. 1 to the Receiver.

Approved by the Commissioner April 18, 2000.

Directive No. 5 - Directive regarding Land Trusts

PRICEWATERHOUSECOOPERS LLP, AS RECEIVER FOR INDEPEDNENT TRUST CORPORATION

April 25, 2000

VIA FACSIMLE
TO:Commissioner of Banks and Real Estate ("Commissioner")
RE: Request for Direction No. 5

BACKGROUND: As of the commencement of the receivership of Independent Trust Corporation ("Intrust"), numerous accountholders of Intrust ("Accountholders") held land trusts in their accounts (where Intrust is the title holding trustee). Pursuant to the Order of Administration entered by the Cook County Circuit Court on April 14, 2000 ("Order"), in connection with the commencement of insolvency proceedings against Intrust, PricewaterhouseCoopers as receiver for Intrust ("Receiver") is not authorized, prior to completion of certain investigations and entry of appropriate court orders, to permit Accountholders to direct actions concerning the Accountholders' land trusts unless directed otherwise by the Commissioner or his authorized agent.

Based on a preliminary examination of the accounts for the land trusts, the Receiver believes that it is appropriate to take instructions from Accountholders to permit Accountholders to direct action concerning the Accountholders' land trusts provided the land trusts had no cash balances included in an account held at Intrust.

REQUEST FOR DIRECTION: The Receiver requests the Commissioner to give the Receiver the following direction:

The Receiver shall permit any Accountholder to direct action in the normal course concerning the Accountholders' land trusts provided the land trusts had no cash balances included in an account held at Intrust, provided further that such actions shall not include a transfer of the land trusts to another trustee to be held and administered.

COMMISSIONER'S RESPONSE: Date: May 10 , 2000

The Commissioner hereby directs the Receiver to take the actions described above in the Request for Direction.