Background
Section 100-c of the New York State Banking Law provided for the pooling of small trusts into a large common fund administered by a corporate fiduciary, with the income, expenses, and capital gains and losses shared by the constituent trusts in proportion to their contribution to the common fund. The purpose of this legislation (and similar laws in other states) was to provide corporate fiduciary services to modestly sized trusts which would be too costly to manage individually, promoting economies of scale in the American trust management industry and better risk management for smaller trusts. Central Hanover Bank & Trust Co. in New York City was the manager & trustee of one such common trust fund.
Read more about this topic: Mullane V. Central Hanover Bank & Trust Co.
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