Provident royalties liquidating trust
90%) of profits are distributed to shareholders as dividends. This system, similar to real estate investment trusts, effectively avoids the double taxation of corporate income.
Royalty trusts typically own oil or natural gas wells, the mineral rights of wells, or mineral rights on other types of properties.
Also, since commodities are considered a hedge against inflation, the popularity of royalty trusts as investments rises as interest rates rise, and their shares often rise as a result.
in 2007, their distributions were often in the 10 to 15 percent annual range.
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A royalty trust is a type of corporation, mostly in the United States or Canada, usually involved in oil and gas production or mining.
However, unlike most corporations, its profits are not taxed at the corporate level provided a certain high percentage (e.g.
In no event shall KCC be liable to you or any third party for any direct, indirect, incidental, consequential or special damages (including, but not limited to, damages arising from the disallowance of a potential claim against a client of KCC or damages to business reputation, lost business or lost profits), whether foreseeable or unforeseeable and however caused, even if KCC is advised of the possibility of such damages.They are a powerful investment tool for people who wish to invest directly in extraction of petroleum or mining of other materials, but who do not have the resources or risk tolerance to buy their own well or mine.Additionally, since trusts often own numerous individual wells, oil fields, or mines, they represent a convenient way for the average investor to diversify investments across a number of properties.Provident raised 5 million from 7,700 investors between 20. Similarities exist with the fallout 10 years ago from widespread product failures, such as technology stocks, or more recently, auction rate securities.Joseph Blimline, one of Provident's owners, pleaded guilty to fraud in August in U. But the level of damage triggered by the allegedly fraudulent private placements was unique, Mr. “The private placements were both a ticking time bomb and a toxic product,” he said. It isn't clear exactly how many broker-dealers have shut down in direct response to the cost of litigation from investors' suing over the private placements.