QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employment Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer ☐
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Accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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PART I. FINANCIAL INFORMATION
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Item 1.
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|||
1
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2
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3
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4
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Item 2.
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20
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Item 3.
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31
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Item 4.
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31
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PART II. OTHER INFORMATION
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Item 1.
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32
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Item 1A.
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39
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Item 2.
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39
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Item 3.
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39
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Item 4.
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39
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Item 5.
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39
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Item 6.
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40
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PART I. |
FINANCIAL INFORMATION
|
Item 1. |
Financial Statements
|
Woodbridge Liquidation Trust and Subsidiaries
Consolidated
Statements of Net Assets in Liquidation
As of December 31, 2023
and June 30, 2023
|
($ In Thousands)
|
|
12/31/2023
(Unaudited)
|
6/30/2023
|
||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
|
$ |
|
||||
Restricted cash (Note 3)
|
|
|||||||
Other assets (Note 4)
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$
|
|
$
|
|
||||
Distributions payable
|
|
|
||||||
Accrued liquidation costs (Note 5)
|
|
|
||||||
Total liabilities
|
$ | $ | ||||||
Commitments and Contingencies (Note 12)
|
||||||||
Net Assets in Liquidation
|
||||||||
Restricted for Qualifying Victims (Note 6)
|
$
|
|
$
|
|
||||
All Interestholders
|
|
|
||||||
Total net assets in liquidation
|
$
|
|
$
|
|
PART I. |
FINANCIAL INFORMATION (CONTINUED)
|
Item 1. |
Financial Statements (Continued)
|
Woodbridge Liquidation Trust and Subsidiaries
Consolidated Statements of Changes in
Net Assets in Liquidation
For the Three Months Ended December 31, 2023 and 2022
|
(Unaudited, $ in Thousands)
|
Three Months Ended December 31, 2023
|
Three Months Ended December 31, 2022
|
|||||||||||||||||||||||
Restricted
For Qualifying
Victims
|
All
Interestholders
|
Total
|
Restricted
For Qualifying
Victims
|
All
Interestholders
|
Total
|
|||||||||||||||||||
Net Assets in Liquidation as of beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$ | $ | ||||||||||||||
Change in assets and liabilities (Note 7):
|
||||||||||||||||||||||||
Restricted for Qualifying Victims -
|
||||||||||||||||||||||||
Change in carrying value of assets and liabilities, net
|
|
|
|
|
|
|||||||||||||||||||
All Interestholders -
|
||||||||||||||||||||||||
Change in carrying value of assets and liabilities, net
|
|
|
|
|
|
|
||||||||||||||||||
Distributions (declared) reversed, net
|
|
|
|
|
|
|
||||||||||||||||||
Net change in assets and liabilities
|
|
|
|
|
|
|
||||||||||||||||||
Net Assets in Liquidation as of end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
PART I. |
FINANCIAL INFORMATION (CONTINUED)
|
Item 1. |
Financial Statements (Continued)
|
Woodbridge Liquidation Trust and Subsidiaries
Consolidated Statements of Changes in Net Assets in Liquidation
For the Six Months Ended December 31, 2023 and 2022
|
(Unaudited, $ in Thousands)
|
Six Months Ended December 31, 2023
|
Six Months Ended December 31, 2022
|
|||||||||||||||||||||||
Restricted
For Qualifying
Victims
|
All
Interestholders
|
Total
|
Restricted
For Qualifying
Victims
|
All
Interestholders
|
Total
|
|||||||||||||||||||
Net Assets in Liquidation as of beginning of period
|
$ |
$
|
|
$
|
|
$
|
|
$ | $ | |||||||||||||||
Change in assets and liabilities (Note 7):
|
||||||||||||||||||||||||
Restricted for Qualifying Victims -
|
||||||||||||||||||||||||
Change in carrying value of assets and liabilities, net
|
|
|
( |
) |
|
(
|
)
|
|||||||||||||||||
All Interestholders -
|
||||||||||||||||||||||||
Change in carrying value of assets and liabilities, net
|
|
|
|
|
|
|
||||||||||||||||||
Distributions (declared) reversed, net
|
|
|
|
|
|
|
||||||||||||||||||
Net change in assets and liabilities
|
|
|
|
|
|
|
||||||||||||||||||
Net Assets in Liquidation as of end of period
|
$
|
|
$ |
$
|
|
$
|
|
$ | $ |
1)
|
Formation and Description of Business
|
2) |
Summary of Significant Accounting Policies
|
3) |
Restricted Cash
|
December 31, 2023
|
June 30, 2023
|
|||||||
Forfeited Assets (Note 6) | $ | $ | ||||||
Distributions restricted by the Company related to unresolved claims, distributions for recently allowed claims, uncashed distribution checks, distributions withheld due to pending
avoidance actions and distributions that the Trust is waiting for further beneficiary information
|
|
|
|
|
||||
Total restricted cash
|
$ | $ |
4) |
Other Assets
|
December 31, 2023
|
June 30, 2023
|
|||||||
Accrued interest (a) | $ | $ | ||||||
Real estate assets, net (b) | ||||||||
Forfeited Assets (Note 6) (a)
|
|
|||||||
Settlement receivables, net (c) |
||||||||
Escrow receivable (d) |
||||||||
Other
|
|
|
||||||
Total other assets
|
$
|
|
$ |
(a) |
|
(b) |
|
(c) |
|
(d) |
|
5) |
Accrued Liquidation Costs
|
December 31, 2023
|
June 30, 2023
|
|||||||
Development and holding costs
|
$ | $ | ||||||
General and administrative costs:
|
||||||||
Legal and other professional fees
|
|
|
||||||
Directors and officers insurance
|
||||||||
Payroll and payroll-related
|
|
|
||||||
Board fees and expenses
|
|
|
||||||
Other
|
|
|
||||||
Total general and administrative costs
|
|
|
||||||
Total accrued liquidation costs
|
$
|
|
$
|
|
6)
|
Forfeited Assets - Restricted for Qualifying Victims
|
December 31, 2023
|
June 30, 2023
|
|||||||
Restricted cash (Note 3)
|
$
|
|
$
|
|
||||
Other assets (Note 4)
|
|
|
||||||
Accounts payable and accrued liabilities | ( |
) | ( |
) | ||||
Accrued liquidation costs - primarily legal and professional fees
|
(
|
)
|
(
|
)
|
||||
Net assets in liquidation - restricted for Qualifying Victims
|
$
|
|
$
|
|
7)
|
Net Change in Assets and Liabilities
|
Cash | Remeasure- | |||||||||||
Activities
|
ment
|
Total
|
||||||||||
Cash and cash equivalents | $ | $ | $ | |||||||||
Restricted cash
|
||||||||||||
Other assets
|
( |
) | ( |
) | ||||||||
Total assets
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||
Accounts payable and accrued liabilities
|
$ |
$
|
|
$
|
|
|||||||
Accrued liquidation costs
|
( |
) | ( |
) | ||||||||
Total liabilities
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Change in carrying value of assets and liabilities, net
|
$
|
|
$
|
|
$
|
|
Cash | Remeasure- | |||||||||||
Activities
|
ment
|
Total
|
||||||||||
Cash and cash equivalents | $ | $ | $ | |||||||||
Restricted cash
|
||||||||||||
Other assets
|
( |
) | ( |
) | ||||||||
Total assets
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Accounts payable and accrued liabilities
|
$ |
$
|
|
$
|
|
|||||||
Accrued liquidation costs
|
( |
) | ( |
) | ||||||||
Total liabilities
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Change in carrying value of assets and liabilities, net
|
$
|
|
$
|
|
$
|
|
Cash
|
Remeasure-
|
|||||||||||
Activities
|
ment
|
Total
|
||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
||||||
Restricted cash
|
|
|
|
|||||||||
Other assets
|
(
|
)
|
|
(
|
)
|
|||||||
Total assets
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||
Accounts payable and accrued liabilities
|
$
|
|
$
|
|
$
|
|
||||||
Accrued liquidation costs
|
(
|
)
|
|
(
|
)
|
|||||||
Total liabilities
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Change in carrying value of assets and liabilities, net
|
$
|
|
$
|
|
$
|
|
Cash
|
Remeasure-
|
|||||||||||
Activities
|
ment
|
Total
|
||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
||||||
Restricted cash
|
|
|
|
|||||||||
Other assets
|
(
|
)
|
|
(
|
)
|
|||||||
Total assets
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Accounts payable and accrued liabilities
|
$
|
|
$
|
|
$
|
|
||||||
Accrued liquidation costs
|
(
|
)
|
|
(
|
)
|
|||||||
Total liabilities
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Change in carrying value of assets and liabilities, net
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
Cash | Remeasure- | |||||||||||
Activities
|
ment
|
Total
|
||||||||||
Cash and cash equivalents
|
$ | $ | $ | |||||||||
Restricted cash
|
|
|
|
|||||||||
Other assets
|
(
|
)
|
( |
) | ||||||||
Total assets
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Accounts payable and accrued liabilities
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Accrued liquidation costs
|
(
|
)
|
|
(
|
)
|
|||||||
Total liabilities
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Change in carrying value of assets and liabilities, net
|
$
|
|
$
|
|
$
|
|
Distributions declared
|
$
|
|
||
Distributions reversed
|
||||
Distributions (declared) reversed, net
|
$
|
|
Cash | Remeasure- | |||||||||||
Activities
|
ment
|
Total
|
||||||||||
Cash and cash equivalents |
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Restricted cash
|
(
|
)
|
|
(
|
)
|
|||||||
Other assets
|
(
|
)
|
|
(
|
)
|
|||||||
Total assets
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Accounts payable and accrued liabilities
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||
Accrued liquidation costs
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Total liabilities
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Change in carrying value of assets and liabilities, net
|
$
|
|
$
|
|
$
|
|
Distributions declared
|
$
|
|
||
Distributions reversed
|
||||
Distributions (declared) reversed, net
|
$
|
|
Cash
|
Remeasure-
|
|||||||||||
Activities
|
ment
|
Total
|
||||||||||
Cash and cash equivalents |
$
|
|
$
|
|
$
|
|
||||||
Restricted cash
|
|
|
|
|||||||||
Other assets
|
(
|
)
|
( |
) | ||||||||
Total assets
|
$
|
|
$
|
|
|
|
||||||
Accounts payable and accrued liabilities
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Accrued liquidation costs
|
(
|
)
|
|
(
|
)
|
|||||||
Total liabilities
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Change in carrying value of assets and liabilities, net
|
$
|
|
$
|
|
$
|
|
Distributions declared
|
$
|
|
||
Distributions reversed
|
||||
Distributions (declared) reversed, net
|
$
|
|
Cash | Remeasure- | |||||||||||
Activities
|
ment
|
Total
|
||||||||||
Cash and cash equivalents |
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Restricted cash
|
|
|
|
|||||||||
Other assets
|
(
|
)
|
|
(
|
)
|
|||||||
Total assets
|
$
|
(
|
)
|
$
|
|
|
(
|
)
|
||||
Accounts payable and accrued liabilities
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||
Accrued liquidation costs
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Total liabilities
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Change in carrying value of assets and liabilities, net
|
$
|
|
$
|
|
$
|
|
Distributions declared
|
$
|
(
|
)
|
|
Distributions reversed
|
||||
Distributions (declared) reversed, net
|
$
|
|
8) |
Liquidation Trust Interests
|
For the Six Months Ended December 31, | ||||||||||||||||
2023 |
2022 |
|||||||||||||||
Liquidation Trust Interests
|
Class A
|
Class B
|
Class A
|
Class B
|
||||||||||||
Outstanding at beginning of period
|
|
|
|
|
||||||||||||
Allowed claims
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
Settlement of claims by cancelling Liquidation |
||||||||||||||||
Trust Interests
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Outstanding at end of period
|
|
|
|
|
For the Six Months Ended December 31,
|
||||||||||||||||
2023 | 2022 | |||||||||||||||
Liquidation Trust Interests
|
Class A
|
Class B
|
Class A
|
Class B
|
||||||||||||
Reserved for unresolved claims at beginning of period
|
|
|
|
|
||||||||||||
Allowed claims
|
(
|
)
|
|
(
|
)
|
|
||||||||||
|
|
|
|
|
||||||||||||
Disallowed claims
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Reserved for unresolved claims at end of period
|
|
|
|
|
9) |
Distributions
|
Six Months Ended December 31, 2022
|
||||||||||||||||||
Date
Declared
|
$ per
Class A
Interest
|
Total
Declared
|
Paid
|
Deposit Into
Restricted
Cash
Account
|
||||||||||||||
Tenth |
|
(a) |
$
|
|
$
|
|
$
|
|
$
|
|
10) |
Related Party Transactions
|
11) |
Causes of Action
|
12) |
Commitments and Contingencies
|
13) |
Subsequent Events
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Class of Interest
|
Number Outstanding as of
December 31, 2023
|
|||
Class A Liquidation Trust Interests
|
11,514,662
|
|||
Class B Liquidation Trust Interests
|
675,617
|
Restricted for
Qualifying Victims
|
All
Interestholders
|
Total
|
||||||||||
Net assets in liquidation as of beginning of period
|
$
|
3,511
|
$
|
35,863
|
$
|
39,374
|
||||||
Change in assets and liabilities (Note 7):
|
||||||||||||
Restricted for Qualifying Victims -
|
||||||||||||
Change in carrying value of assets and liabilities, net
|
30
|
-
|
30
|
|||||||||
All Interestholders -
|
||||||||||||
Change in carrying value of assets and liabilities, net
|
-
|
82
|
82
|
|||||||||
Distributions (declared) reversed, net
|
-
|
333
|
333
|
|||||||||
Net change in assets and liabilities
|
-
|
415
|
415
|
|||||||||
Net assets in liquidation as of end of period
|
$
|
3,541
|
$
|
36,278
|
$
|
39,819
|
Restricted for
Qualifying Victims
|
All
Interestholders
|
Total
|
||||||||||
Settlement recoveries, net (1)
|
$
|
-
|
$
|
78
|
$
|
78
|
||||||
Sales proceeds in excess of carrying value
|
-
|
25
|
25
|
|||||||||
Remeasurement of assets and liabilities, net (2)
|
30
|
(25
|
)
|
5
|
||||||||
Other
|
-
|
4
|
4
|
|||||||||
Change in carrying value of assets and liabilities, net
|
$
|
30
|
$
|
82
|
$
|
112
|
(1) |
Net of 5% payable to the Liquidation Trustee of approximately $4,000.
|
(2) |
Includes interest of approximately $29,000 and $127,000 for Reserved for Qualifying Victims and for All Interestholders, respectively.
|
• |
Reversed distributions of approximately $0.33 million from claims being disallowed.
|
• |
Received net proceeds of approximately $0.50 million from the sale of the Hawaii property.
|
• |
Recorded approximately $0.08 million from the settlement of Causes of Action, net of 5% payable to the Liquidation Trustee.
|
• |
Paid construction costs of approximately $0.08 million and received bond refunds of approximately $0.17 million.
|
• |
Paid general and administrative costs of approximately $3.00 million, including approximately $0.07 million of board member fees and expenses, approximately
$0.41 million of payroll and other general and administrative costs, approximately $1.24 million of professional fees and approximately $1.28 million paid to the Liquidation Trustee.
|
Restricted for
Qualifying Victims
|
All
Interestholders
|
Total
|
||||||||||
Net assets in liquidation as of beginning of period
|
$
|
3,483
|
$
|
34,433
|
$
|
37,916
|
||||||
Change in assets and liabilities:
|
||||||||||||
Restricted for Qualifying Victims -
|
||||||||||||
Change in carrying value of assets and liabilities, net
|
-
|
-
|
-
|
|||||||||
All Interestholders -
|
||||||||||||
Change in carrying value of assets and liabilities, net
|
-
|
1,236
|
1,236
|
|||||||||
Distributions (declared) reversed, net
|
-
|
-
|
-
|
|||||||||
Net change in assets and liabilities
|
-
|
1,236
|
1,236
|
|||||||||
Net assets in liquidation, as of end of period
|
$
|
3,483
|
$
|
35,669
|
$
|
39,152
|
Restricted for
Qualifying Victims
|
All
Interestholders
|
Total
|
||||||||||
Remeasurement of assets and liabilities, net
|
$
|
-
|
$
|
910
|
$
|
910
|
||||||
Settlement recoveries (1)
|
-
|
40
|
40
|
|||||||||
Other (2)
|
-
|
286
|
286
|
|||||||||
Change in carrying value of assets and liabilities, net
|
$
|
-
|
$
|
1,236
|
$
|
1,236
|
(1) |
Net of 5% payable to the Liquidation Trustee of approximately $2 and a reversal of an allowance for uncollectible settlement installment receivables of approximately $2.
|
(2) |
The components of Other are as follows ($ in thousands):
|
Sales of furniture, net
|
$
|
228
|
||
Cash interest earned
|
57
|
|||
Miscellaneous
|
1
|
|||
Total
|
$
|
286
|
• |
Received net proceeds from the sale of Forfeited Assets of approximately $0.14 million.
|
• |
Completed construction of one single-family home (41 King Street).
|
• |
Recorded approximately $0.04 million for the settlement of Causes of Action, net of 5% payable to the Liquidation Trustee and the reversal of an allowance for uncollectible installment receivables.
|
• |
Paid construction costs of approximately $0.28 million relating to single-family homes under development.
|
• |
Paid holding costs of approximately $0.19 million.
|
• |
Paid general and administrative costs of approximately $4.14 million, including approximately $0.16 million of board member fees and expenses, approximately $2.37 million of payroll and other general and
administrative costs and approximately $1.61 million of professional fees.
|
Restricted for
Qualifying Victims
|
All
Interestholders
|
Total
|
||||||||||
Net assets in liquidation as of beginning of period
|
$
|
3,491
|
$
|
3,282
|
$
|
6,773
|
||||||
Change in assets and liabilities:
|
||||||||||||
Restricted for Qualifying Victims -
|
||||||||||||
Change in carrying value of assets and liabilities, net
|
50
|
-
|
50
|
|||||||||
All Interestholders -
|
||||||||||||
Change in carrying value of assets and liabilities, net
|
-
|
32,623
|
32,623
|
|||||||||
Distributions (declared) reversed, net
|
-
|
373
|
373
|
|||||||||
Net change in assets and liabilities
|
-
|
32,996
|
32,996
|
|||||||||
Net assets in liquidation, as of end of period
|
$
|
3,541
|
$
|
36,278
|
$
|
39,819
|
Restricted for
Qualifying Victims
|
All
Interestholders
|
Total
|
||||||||||
Settlement recoveries, net (1)
|
$
|
-
|
$
|
32,026
|
$
|
32,026
|
||||||
Remeasurement of assets and liabilities, net (2)
|
38
|
556
|
594
|
|||||||||
Sales proceeds in excess of carrying value
|
12
|
25
|
37
|
|||||||||
Other
|
-
|
16
|
16
|
|||||||||
Change in carrying value of assets and liabilities, net
|
$
|
50
|
$
|
32,623
|
$
|
32,673
|
(1) |
Net of 5% payable to the Liquidation Trustee of approximately $2,484,000.
|
(2) |
Includes interest of approximately $38,000 and $607,000 for Reserved for Qualifying Victims and for All Interestholders, respectively.
|
• |
Reversed distributions of approximately $0.37 million from claims being disallowed.
|
• | Received net proceeds of approximately $0.50 million from the sale of the Hawaii property. |
• |
Received net proceeds from the sale of Forfeited Assets of approximately $0.05 million.
|
• |
Recorded approximately $32.03 million from the settlement of Causes of Action, net of 5% payable to the Liquidation Trustee.
|
• |
Paid construction costs of approximately $0.12 million and received bond refunds of approximately $0.17 million.
|
• |
Paid holding costs of approximately $0.01 million.
|
• |
Paid general and administrative costs of approximately $6.11 million, including approximately $0.14 million of board member fees and expenses, approximately
$0.77 million of payroll and other general and administrative costs, approximately $2.71 million of professional fees and approximately $2.49 million paid to the Liquidation Trustee.
|
Restricted for
Qualifying Victims
|
All
Interestholders
|
Total
|
||||||||||
Net assets in liquidation as of beginning of period
|
$
|
3,485
|
$
|
30,910
|
$
|
34,395
|
||||||
Change in assets and liabilities:
|
||||||||||||
Restricted for Qualifying Victims -
|
||||||||||||
Change in carrying value of assets and liabilities, net
|
(2
|
)
|
-
|
(2
|
)
|
|||||||
|
||||||||||||
All Interestholders -
|
||||||||||||
Change in carrying value of assets and liabilities, net
|
-
|
2,121
|
2,121
|
|||||||||
Distributions (declared) reversed, net
|
-
|
2,638
|
2,638
|
|||||||||
Net change in assets and liabilities
|
-
|
4,759
|
4,759
|
|||||||||
Net assets in liquidation, as of end of period
|
$
|
3,483
|
$
|
35,669
|
$
|
39,152
|
Restricted for
Qualifying Victims
|
All
Interestholders
|
Total
|
||||||||||
Remeasurement of assets and liabilities, net
|
$
|
(2
|
)
|
$
|
1,199
|
$
|
1,197
|
|||||
Settlement recoveries (1)
|
-
|
194
|
194
|
|||||||||
Other (2)
|
-
|
728
|
728
|
|||||||||
Change in carrying value of assets and liabilities, net
|
$
|
(2
|
)
|
$
|
2,121
|
$
|
2,119
|
(1) |
Net of 5% payable to the Liquidation Trustee of approximately $10 and an allowance for uncollectible settlement installment receivables of approximately $27.
|
(2) |
The components of Other are as follows ($ in thousands):
|
Sales of furniture, net
|
$
|
634
|
||
Cash interest earned
|
101
|
|||
Miscellaneous
|
(7
|
)
|
||
Total
|
$
|
728
|
• |
Reversed distributions of approximately $2.65 primarily from claims being disallowed or Class A Interests being cancelled. Distributions that had been previously reversed were recorded of approximately $0.01
million for Interestholders that were previously deemed to have forfeited their rights to receive Class A Interest distributions but had subsequently responded.
|
• |
Received net proceeds from the sale of Forfeited Assets of approximately $0.71 million.
|
• |
Completed construction of two single-family homes (41 King Street).
|
• |
Recorded approximately $0.23 million for the settlement of Causes of Action, net of 5% payable to the Liquidation Trustee and an allowance for uncollectible installment receivables.
|
• |
Paid construction costs of approximately $1.55 million relating to single-family homes under development.
|
• |
Paid holding costs of approximately $0.47 million.
|
• |
Paid general and administrative costs of approximately $9.10 million, including approximately $0.32 million of board member fees and expenses, approximately $5.40 million of payroll and other general and
administrative costs and approximately $3.29 million of professional fees.
|
• |
Proceeds from Real Estate Transactions: As of December 31, 2023, the Company owned two real estate assets with an estimated carrying value of
approximately $0.47 million. Based on the remaining real estate assets of the Company, future net proceeds will be negligible as compared to the proceeds the Company has realized in prior periods.
|
• |
Causes of Action Recoveries: During the three and six months ended December 31, 2023, the Company recognized approximately $0.82 million and $34.51
million, respectively, from the settlement of Causes of Action. Based on the remaining Causes of Action, future recoveries will be negligible as compared to the proceeds the Company has realized in prior periods.
|
• |
Interest Earnings: As of December 31, 2023, the Company has accrued approximately $1.32 million of interest earnings through March 31, 2026. Of this
amount, the Company projects to receive approximately $0.64 million of interest earnings through June 30, 2024.
|
• |
Forfeited Assets: Forfeited Assets consist of cash and other assets (jewelry and art). There were no sales of Forfeited Assets during the three
months ended December 31, 2023. During the six months ended December 31, 2023, the Trust sold some of its Forfeited Assets and received net proceeds of approximately $0.05 million. On
February 7, 2023, the Trust was informed that the DOJ received additional Forfeited Assets from a co-defendant of Robert Shapiro and the DOJ proposes to transfer these Forfeited Assets to the Trust. On December 12, 2023, the DOJ granted the
Trust’s petition for remittance of the additional Forfeited Assets. At this time, the Trust is unable to estimate the precise amount or timing of the transfer of any such Forfeited Assets and therefore these future proceeds have not been
recorded as of December 31, 2023. As noted earlier, net sale proceeds from liquidating the Forfeited Assets are to be distributed only to Qualifying Victims.
|
During the Period from
February 15, 2019 (inception) through
December 31, 2023 ($ in Millions)
|
During the Period from
February 15, 2019 (inception) through February 12, 2024 ($ in Millions) |
||||||||||||||||||||||||||||
|
Date
Declared
|
$ per
Class A Interest |
Total Declared
|
Paid
|
Restricted
Cash
Account
|
Total Declared
|
Paid
|
Restricted
Cash
Account
|
|||||||||||||||||||||
Distributions Declared
|
|||||||||||||||||||||||||||||
First
|
3/15/2019
|
$
|
3.75
|
$
|
44.70
|
$
|
42.32
|
$
|
2.38
|
$
|
44.70
|
$
|
42.32
|
$ |
2.38
|
||||||||||||||
Second
|
1/2/2020
|
4.50
|
53.44
|
51.20
|
2.24
|
53.44
|
51.20
|
2.24
|
|||||||||||||||||||||
Third
|
3/31/2020
|
2.12
|
25.00
|
24.19
|
0.81
|
25.00
|
24.19
|
0.81
|
|||||||||||||||||||||
Fourth
|
7/13/2020
|
2.56
|
29.97
|
29.24
|
0.73
|
29.97
|
29.24
|
0.73
|
|||||||||||||||||||||
Fifth
|
10/19/2020
|
2.56
|
29.96
|
29.21
|
0.75
|
29.96
|
29.21
|
0.75
|
|||||||||||||||||||||
Sixth
|
1/7/2021
|
4.28
|
50.01
|
48.67
|
1.34
|
50.01
|
48.67
|
1.34
|
|||||||||||||||||||||
Seventh (a)
|
5/13/2021
|
2.58
|
30.04
|
29.35
|
0.69
|
30.04
|
29.35
|
0.69
|
|||||||||||||||||||||
Eighth
|
10/8/2021
|
3.44
|
40.02
|
39.14
|
0.88
|
40.02
|
39.14
|
0.88
|
|||||||||||||||||||||
Ninth
|
2/4/2022
|
3.44
|
39.98
|
39.15
|
0.83
|
39.98
|
39.15
|
0.83
|
|||||||||||||||||||||
Tenth
|
6/15/2022
|
5.63
|
65.02
|
64.19
|
0.83
|
65.02
|
64.19
|
0.83
|
|||||||||||||||||||||
Eleventh
|
5/10/2023
|
2.18
|
25.02
|
24.90
|
0.12
|
25.02
|
24.90
|
0.12
|
|||||||||||||||||||||
Subtotal
|
$
|
37.04
|
$
|
433.16
|
$
|
421.56
|
$
|
11.60
|
$
|
433.16
|
$
|
421.56
|
$
|
11.60
|
|||||||||||||||
Distributions Returned / (Reversed)
|
|||||||||||||||||||||||||||||
Disallowed/cancelled (b)
|
(6.64
|
)
|
(6.64
|
)
|
|||||||||||||||||||||||||
Returned (c)
|
0.74
|
0.74
|
|||||||||||||||||||||||||||
Forfeited (d)
|
(1.13
|
)
|
(1.13
|
)
|
|||||||||||||||||||||||||
Subtotal
|
(7.03
|
)
|
(7.03
|
)
|
|||||||||||||||||||||||||
Distributions Paid from Reserve Account (e)
|
(3.68
|
)
|
(3.68
|
)
|
|||||||||||||||||||||||||
Distributions Payable, Net
|
as of 12/31/2023:
|
$
|
0.89
|
as of 2/12/2024:
|
$
|
0.89
|
(a) |
The seventh distribution included the cash the Trust received from Fair Funds.
|
(b) |
As a result of claims being disallowed or Class A Interests cancelled.
|
(c) |
Distribution checks returned or not cashed.
|
(d) |
Distributions forfeited as Interestholders did not cash checks that were over 180 days old.
|
(e) |
Paid as claims are allowed or resolved.
|
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4. |
Controls and Procedures
|
• |
The first set of counts in the complaint are against law firm Halloran & Sage LLP, attorney Richard Roberts, and the “Doe” defendants for aiding and abetting securities fraud (First Count), aiding and
abetting fraud (Second Count), aiding and abetting breach of fiduciary duty (Third Count), negligent misrepresentation (Fourth Count), professional negligence (Fifth Count), and aiding and abetting conversion (Sixth Count). These defendants
are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive damages.
|
• |
The second set of counts in the complaint are against law firm Balcomb & Green, P.C., attorney Lawrence R. Green, and the “Doe” defendants for aiding and abetting securities fraud (Seventh Count), aiding
and abetting fraud (Eighth Count), aiding and abetting breach of fiduciary duty (Ninth Count), negligent misrepresentation (Tenth Count), professional negligence (Eleventh Count), and aiding and abetting conversion (Twelfth Count). These
defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive damages.
|
• |
The third set of counts in the complaint are against attorney Jon H. Freis and the “Doe” defendants for aiding and abetting securities fraud (Thirteenth Count), aiding and abetting fraud (Fourteenth Count),
aiding and abetting breach of fiduciary duty (Fifteenth Count), negligent misrepresentation (Sixteenth Count), professional negligence (Seventeenth Count), and aiding and abetting conversion (Eighteenth Count). These defendants are alleged
to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive damages.
|
• |
The fourth set of counts in the complaint are against law firm Rome McGuigan, P.C., attorney Brian Courtney, and the “Doe” defendants for aiding and abetting securities fraud (Nineteenth Count), aiding and
abetting fraud (Twentieth Count), aiding and abetting breach of fiduciary duty (Twenty-First Count), negligent misrepresentation (Twenty-Second Count), professional negligence (Twenty-Third Count), and aiding and abetting conversion
(Twenty-Fourth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive
damages.
|
• |
The fifth set of counts in the complaint are against law firm Haight Brown & Bonesteel LLP, attorney Ted Handel, and the “Doe” defendants for aiding and abetting securities fraud (Twenty-Fifth Count),
aiding and abetting fraud (Twenty-Sixth Count), aiding and abetting breach of fiduciary duty (Twenty-Seventh Count), negligent misrepresentation (Twenty-Eighth Count), professional negligence (Twenty-Ninth Count), and aiding and abetting
conversion (Thirtieth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $20 million, as well as for punitive
damages.
|
• |
The sixth set of counts in the complaint are against law firm Bailey Cavalieri LLC, Thomas Geyer, and the “Doe” defendants for aiding and abetting securities fraud (Thirty-First Count), aiding and abetting
fraud (Thirty-Second Count), aiding and abetting breach of fiduciary duty (Thirty-Third Count), negligent misrepresentation (Thirty-Fourth Count), professional negligence (Thirty-Fifth Count), and aiding and abetting conversion
(Thirty-Sixth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive
damages.
|
• |
The seventh set of counts in the complaint are against law firm Sidley Austin LLP, attorney Neal Sullivan, and the “Doe” defendants for aiding and abetting securities fraud (Thirty-Seventh Count), aiding and
abetting fraud (Thirty-Eighth Count), aiding and abetting breach of fiduciary duty (Thirty-Ninth Count), negligent misrepresentation (Fortieth Count), professional negligence (Forty-First Count), and aiding and abetting conversion
(Forty-Second Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive
damages.
|
• |
The eighth set of counts in the complaint are against law firm Davis Graham & Stubbs LLP, attorney S. Lee Terry, Jr., and the “Doe” defendants for aiding and abetting securities fraud (Forty-Third Count),
aiding and abetting fraud (Forty-Fourth Count), aiding and abetting breach of fiduciary duty (Forty-Fifth Count), negligent misrepresentation (Forty-Sixth Count), professional negligence (Forty-Seventh Count), and aiding and abetting
conversion (Forty-Eighth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $200 million, as well as for
punitive damages.
|
• |
The ninth set of counts in the complaint are against law firm Robinson & Cole LLP, attorney Shant Chalian, and the “Doe” defendants for aiding and abetting securities fraud (Forty-Ninth Count), aiding and
abetting fraud (Fiftieth Count), aiding and abetting breach of fiduciary duty (Fifty-First Count), negligent misrepresentation (Fifty-Second Count), professional negligence (Fifty-Third Count), and aiding and abetting conversion
(Fifty-Fourth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $5 million, as well as for punitive damages.
|
• |
The tenth set of counts in the complaint are against law firm Finn Dixon & Herling LLP, attorney Reed Balmer, and the “Doe” defendants for aiding and abetting securities fraud (Fifty-Fifth Count), aiding
and abetting fraud (Fifty-Sixth Count), aiding and abetting breach of fiduciary duty (Fifty-Seventh Count), negligent misrepresentation (Fifty-Eighth Count), professional negligence (Fifty-Ninth Count), and aiding and abetting conversion
(Sixtieth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $5 million, as well as for punitive damages.
|
• |
The eleventh set of counts in the complaint are against law firms Halloran & Sage LLP; Balcomb & Green, P.C.; Rome McGuigan, P.C.; Haight Brown & Bonesteel LLP; Bailey Cavalieri LLC; Sidley Austin
LLP; Davis Graham & Stubbs LLP; Robinson & Cole LLP; and Finn Dixon & Herling LLP; attorney Jon H. Freis, and the “Doe” defendants for actual-intent fraudulent transfer (Sixty-First Count) and constructive fraudulent transfer
(Sixty-Second Count). These defendants are alleged to be liable for damages in an amount believed to be in excess of $5 million, as well as for provisional remedies, avoidance of the transfers, and punitive damages.
|
• |
On March 20, 2020, two sets of defendants – Sidley Austin LLP and Neal Sullivan; and Davis Graham & Stubbs LLP and S. Lee Terry, Jr. – filed special motions to strike the portions of the complaint
directed at them under a California statute (Civil Procedure Code section 425.16) that permits defendants to bring early challenges to causes of action against them that allegedly arise from protected litigation activity if those causes of
action lack minimal merit. The defendants that filed these special motions to strike asserted that the claims against them arise from communicative conduct in the course of quasi-judicial proceedings, such as regulatory inquiries, and that
the Trust cannot establish a likelihood of prevailing on its claims against them. The Trust opposed these motions, and the matters were heard on July 28, 2020, and taken under submission on that date. On August 14, 2020, the Court entered
orders: (i) granting the motion to strike filed by Sidley Austin LLP and Neal Sullivan, and (ii) granting in part and denying in part the motion to strike filed by Davis Graham & Stubbs LLP and S. Lee Terry, Jr. In September 2020, the
Trust filed notices of appeal of the foregoing orders, and Davis Graham & Stubbs LLP and S. Lee Terry, Jr. subsequently filed a cross-appeal. On January 27, 2021, the Court entered an order granting, in part, a motion for attorneys’
fees filed by Sidley Austin LLP and Neal Sullivan, pursuant to which the movants were awarded $282,500.00 in fees and $5,600.00 in costs. On March 1, 2021, the Trustee filed a notice of appeal of the order granting fees and costs.
|
• |
On April 13, 2020, four sets of defendants – Rome McGuigan, P.C. and Brian Courtney; Bailey Cavalieri LLC and Thomas Geyer; Robinson & Cole LLP and Shant Chalian; and Finn Dixon & Herling LLP and Reed
Balmer – filed motions to quash the service of summonses. The defendants that filed these motions asserted that they are not subject to suit in California because they do not have sufficient contacts with California to justify a California
court’s exercise of jurisdiction over them. The Trust opposed these motions, and the matters were heard in part on July 15, 2020 and in part on July 20, 2020, and (with exception of the motion filed by Finn Dixon & Herling LLP and Reed
Balmer) were taken under submission on July 20, 2020. The motion filed by Finn Dixon & Herling LLP, and Reed Balmer was taken off calendar prior to July 20, 2020, and the parties thereafter reached a confidential settlement. On July
21, 2020, the Court entered orders granting the motions to quash filed by Rome McGuigan, P.C. and Brian Courtney; Bailey Cavalieri LLC and Thomas Geyer; and Robinson & Cole LLP and Shant Chalian. On September 10, 2020, the Trust filed
a notice of appeal of the foregoing orders.
|
• |
On June 16, 2020, the Trust reached a confidential settlement with Balcomb & Green, P.C. and Lawrence R. Green. On July 6, 2020, these defendants filed a motion seeking the Court’s determination that the
settlement was made in good faith under a California statute (Civil Procedure Code section 877.6) that permits settling defendants to seek a good faith settlement finding in order to bar any other defendant from seeking contribution or
indemnity. The motion was unopposed, and the Court entered an order granting it on August 12, 2020.
|
• |
On September 11, 2020, the Trust reached a settlement with Finn Dixon & Herling LLP and Reed Balmer that resolved all litigation between them.
|
• |
On January 21, 2021, the Trust reached a confidential settlement with Robinson & Cole LLP and Shant Chalian. As part of that settlement, the appeal of the jurisdictional ruling as to those parties has
been dismissed.
|
• |
The other appeals remain pending. On June 14, 2021, the Trustee filed a combined opening brief for all of the appeals other than his appeal of the order granting fees and costs to Sidley Austin LLP. Between
September 22 and 29, 2021, the respondents filed their opening briefs. On March 17, 2022, the Trustee filed a combined reply brief for all of the appeals other than his appeal of the order granting fees and costs to Sidley Austin LLP. On
June 30, 2022, Davis Graham & Stubbs LLP filed its reply brief in support of its cross-appeal of the order denying a portion of its special motion to strike. The matter is currently fully briefed and awaiting argument.
|
• |
While the appeals were pending, the Trust reached a settlement with Davis Graham & Stubbs LLP and Lee Terry on July 29, 2023 for $25.5 million, which amount resulted in proceeds paid to the Trust on
October 2, 2023 of approximately $17.0 million, net of attorneys’ fees. The settlement resolved all litigation between the Trust and Davis Graham & Stubbs LLP and Mr. Terry.
|
• |
In March 2023, the Trust dismissed its claims against Jon H. Freis.
|
• |
In April 2023, the Trust reached a settlement with Bailey Cavalieri LLC and Thomas Geyer that resolved all litigation between them.
|
• |
In June 2023, the Trust reached a settlement with Halloran & Sage and Richard Roberts for the remaining amount of the law firm’s applicable liability insurance policies, which resulted in proceeds paid to
the Trust on August 11, 2023 of approximately $13.2 million, net of attorneys’ fees and other litigation expenses. This settlement resolved all litigation between the Trust and Halloran & Sage and Richard Roberts.
|
• |
On November 4, 2023, the Trust and law firm Rome McGuigan, P.C. agreed to settle the Trust’s pending litigation against that firm and related defendants for $5.0 million. On January 23, 2024, the court
granted Rome McGuigan, P.C.’s motion to determine that the settlement with the Trust was reached in good faith. Under the terms of the agreement, payment of the settlement is expected on or before February 22, 2024.
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• |
On January 19, 2024, The California Court of Appeal issued an appeal affirming the trial court’s orders granting Sidley Austin LLP and Neal Sullivan’s motion to
strike, as well as the order awarding them attorney’s fees. The Trust has elected not to seek further appellate review of this ruling. The attorneys’ fees and costs owed to
Sidley Austin LLP are approximately $290,000, plus (potentially) additional fees in connection with prosecution of the appeal, the amount of which will not be known until Sidley Austin LLP seeks such additional fees and the trial court
considers the issue at some future date.
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• |
Preferential transfers and/or fraudulent transfers (Noteholders and Unitholders).
Certain of the actions include claims arising under chapter 5 of the Bankruptcy Code and seek to
avoid or recover payments made by the Debtors: (1) during the 90 days prior to the December 4, 2017 bankruptcy filing, including payments to miscellaneous vendors and former Noteholders and Unitholders; and/or (2) during the course of the
Ponzi scheme (from July 2012 through the December 4, 2017 bankruptcy filing) for interest paid to former Noteholders and Unitholders.
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• |
Fraudulent transfers (Shapiro personal expenses). Two remaining actions include
claims arising under chapter 5 of the Bankruptcy Code and seek to avoid and recover payments made by the Debtors during the course of the Ponzi scheme (from July 2012 through the December 4, 2017 bankruptcy filing) for the personal
expenses of Robert and Jeri Shapiro, including those identified in a forensic report prepared in connection with an SEC enforcement action in the United States District Court for the Southern District of Florida.
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• |
Fraudulent transfers and fraud (against former agents). Certain of the actions,
which arise under chapter 5 of the Bankruptcy Code and applicable state law governing fraudulent transfers, seek to avoid and recover payments made by the Debtors during the course of the Ponzi scheme (from July 2012 through the December
4, 2017 bankruptcy filing) for commissions to former agents, as well as for fraud, aiding and abetting fraud, and the unlicensed sale of securities asserted by the Trust based on claims contributed to the Trust by defrauded investors.
These actions were filed by the Trust in the Bankruptcy Court between November 15, 2019 and December 4, 2019. Actions of this type are also being pursued by the SEC, and it is the Trust’s understanding that any recoveries obtained by the
SEC will be transmitted to the Trust pursuant to a Fair Fund established by the SEC.
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• |
Fraudulent transfers (Kenneth Halbert). The Trust has pursued fraudulent transfer
claims against Kenneth Halbert to avoid and recover prepetition payments of principal and interest to Mr. Halbert. The Trust filed its initial complaint on December 1, 2019 and the operative first amended complaint on December 7, 2021.
Fact discovery closed on April 24, 2023. Thereafter, on June 27, 2023, the Trust agreed to settle its pending fraudulent transfer claims against Kenneth Halbert. The terms of the settlement are contained in a settlement agreement
between the Trust and Mr. Halbert. Under the agreement, the Trust agreed to dismiss its claims against Mr. Halbert for the sum of $4 million, payable in cash to the Trust. The Trust received the settlement payment on August 15, 2023 and
dismissed the action against Mr. Halbert on August 22, 2023.
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• |
Recovery of United States Trustee Fees. On June 6, 2022, the United States Supreme Court determined in Siegel v. Fitzgerald, 596 U.S. 464 (2022), that a statutory amendment that imposed a temporary increase in the
United States Trustee fees payable in bankruptcy cases in certain judicial districts (but not in other districts) was unconstitutional as a violation of the uniformity requirement of the Bankruptcy Clause of the United States
Constitution. Following Siegel, certain representatives of bankruptcy estates in the affected
districts filed lawsuits seeking refunds of the incremental amounts paid by those estates for United States Trustee fees in excess of the amounts that would have been paid absent the unconstitutional statutory amendment. On December 29,
2022, the Trust file such a complaint in the Bankruptcy Court against Andrew R. Vara, in his capacity as the United States Trustee for Region 3, Tara Twomey, in her capacity as Director of the Executive Office for United States Trustees,
and the United States Trustee Program (Adv. No. 22-50516). The Complaint seeks a refund in the amount of $1,920,219 in connection with the overpayment of United States Trustee fees during the Bankruptcy Cases. On August 3, 2023, the
Trust filed a motion for summary judgment in this action. On September 29, 2023, the United
States Supreme Court granted the petition for a writ of certiorari in United States Trustee v. John Q. Hammons Fall 2006 LLC, No. 22-1238 (U.S.) on the issue of the appropriate remedy for the Constitutional violation identified in Siegel, which issue affects the numerous cases throughout the affected districts in which unconstitutional United States Trustee fees were assessed and paid. Prior to the deadline for the United
States Trustee defendants in the Trust’s refund lawsuit to respond to the Trust’s motion for summary judgment, the parties entered into a stipulation staying the Trust’s action until the Supreme Court renders a decision in the Hammons case. Oral argument before the Supreme Court in the Hammons case took place on January 9, 2024. As of the date hereof, a decision by the Supreme Court has not been issued and, as such, the
Trust’s action remains stayed. As a result, at this time, the Trust is unable to determine if any refund will be obtained or the timing of any such refund.
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• |
Actions regarding the Shapiro’s personal assets. On December 4, 2019, the Trust
filed an action in the Bankruptcy Court, Adv. Pro. No. 10-51076 (BLS), Woodbridge Liquidation Trust v. Robert Shapiro, Jeri Shapiro, 3X a Charm, LLC,
Carbondale Basalt Owners, LLC, Davana Sherman Oaks Owners, LLC, In Trend Staging, LLC, Midland Loop Enterprises, LLC, Schwartz Media Buying Company, LLC and Stover Real Estate Partners LLC. In this action, the Trust asserts claims under chapter 5 of the Bankruptcy Code and applicable state law for avoidance of preferential and fraudulent transfers together with claims for fraud, aiding and abetting fraud, the
unlicensed sale of securities, breach of fiduciary duty and unjust enrichment. The Trust seeks to recover damages and assets held in the names of Robert Shapiro, Jeri Shapiro and their family members and entities owned or controlled by
them, which assets the Trust contends are beneficially owned by the Debtors or for which the Debtors are entitled to recover based on the Shapiros’ defalcations, including over $20 million in avoidable transfers. On February 4, 2022, the
Trust entered into a Settlement Agreement with Ms. Jeri Shapiro resolving the Trust’s adversary proceeding against Ms. Shapiro. In connection with the Settlement Agreement, Ms. Shapiro responded to interrogatories from the Trust and
submitted a declaration under penalty of perjury detailing her lack of assets. Upon execution of the Settlement Agreement, Ms. Shapiro executed and delivered a Stipulated Judgment for approximately $20.6 million that will be held by the
Trust in escrow for three years that can be entered without notice if the Trust learns Ms. Shapiro’s representations in her declaration were false or materially inaccurate. Additionally, Ms. Shapiro authorized the Trust to expunge the
filed claims of certain co-defendants for entities she was listed as an officer and turned over payments to the Trust that were received by certain co-defendants in the adversary proceeding. A stipulation of dismissal (as to Ms. Shapiro
only) was entered on April 1, 2022.
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• |
Criminal proceeding and forfeiture. In connection with the United States’
criminal case against Robert Shapiro (Case No. No. 19-20178-CR-ALTONAGA (S.D. Fla. 2019)), Shapiro agreed to the forfeiture of certain assets. The Trust filed a petition in the Florida court to claim the Forfeited Assets as property of
the Debtors’ estates, and therefore as property that had vested in the Trust pursuant to the Plan. The Trust has entered into an agreement with the United States Department of Justice to resolve its claim. The agreement was approved by
the Bankruptcy Court on September 17, 2020 and was approved by the United States District Court on October 1, 2020. Among other things, the agreement provides for the release of specified Forfeited Assets by the United States to the
Trust, and for the Trust to liquidate those assets and distribute the net sale proceeds to Qualifying Victims, which include the vast majority of Trust beneficiaries—specifically, all former holders of Class 3 and 5 claims under the Plan
and their permitted assigns—but do not include former holders of Class 4 claims under the Plan. The Trust has taken possession of the Forfeited Assets and has sold the wine, gold, clothing, handbags, shoes and an automobile. A
substantial majority of the jewelry and art have also been sold.
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Item 1A. |
Risk Factors
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
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Date of Sale
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Number of
Class A
Interests Sold
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Number of
Class B
Interests Sold
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Nature of the
Transaction
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Consideration
Received
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|||||||
October 26, 2023
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83.68
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-
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Allowance of claims
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Allowance of claims
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Item 3. |
Defaults Upon Senior Securities
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Item 4. |
Mine Safety Disclosures
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First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and its Affiliated Debtors dated August 22, 2018, incorporated herein by reference to the
Registration Statement on Form 10 filed by the Trust on October 25, 2019.
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Certificate of Trust of Woodbridge Liquidation Trust dated February 14 and effective February 15, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by
the Trust on October 25, 2019.
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Liquidation Trust Agreement of Woodbridge Liquidation Trust dated February 15, 2019, as amended by Amendment No. 1 dated August 21, 2019 and Amendment No. 2 dated September 13, 2019,
incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019.
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Amendment No. 3 to Liquidation Trust Agreement dated as of November 1, 2019, incorporated herein by reference to the Quarterly Report on Form 10-Q filed by the Trust on November 9, 2023.
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Amendment No. 4 to Liquidation Trust Agreement dated as of February 5, 2020, incorporated herein by reference to the Current Report on Form 8-K filed by the Trust on February 6, 2020.
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Amended and Restated Bylaws of Woodbridge Liquidation Trust effective August 21, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on
October 25, 2019.
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Limited Liability Company Agreement of Woodbridge Wind-Down Entity LLC dated February 15, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by the
Trust on October 25, 2019.
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First Amendment to Limited Liability Agreement of Woodbridge Wind-Down Entity LLC dated November 30, 2022, incorporated herein by reference to the Current Report on Form 8-K filed by the
Trust on December 1, 2022.
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Second Amendment to Limited Liability Agreement of Woodbridge Wind-Down Entity LLC dated as of March 27, 2023, incorporated herein by reference to the Current Report on Form 8-K filed by
the Trust on March 29, 2023.
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Third Amendment to Limited Liability Agreement of Woodbridge Wind-Down Entity LLC dated as of April 28, 2023, incorporated herein by reference to the Current Report on Form 8-K filed by
the Trust on May 1, 2023.
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Employment Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and Marion W. Fong, incorporated herein by reference to Amendment No. 1 to Registration Statement on
Form 10 filed by the Trust on December 13, 2019.
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First Amendment to Employment Agreement dated September 24, 2020 between Woodbridge Wind-Down Entity LLC and Marion W. Fong, incorporated herein by reference to the Form 10-K filed by the
Trust on September 28, 2020.
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Indemnification Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and Marion W. Fong, incorporated herein by reference to Amendment No. 1 to Registration Statement
on Form 10 filed by the Trust on December 13, 2019.
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Part-Time Employment Agreement dated November 30, 2022 between Woodbridge Wind-Down Entity and Marion W. Fong, incorporated herein by reference to the Current Report on Form 8-K filed by
the Trust on December 1, 2022.
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Employment Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, incorporated herein by reference to Amendment No. 1 to Registration Statement
on Form 10 filed by the Trust on December 13, 2019.
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First Amendment to Employment Agreement dated September 24, 2020 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, incorporated herein by reference to the Form 10-K filed by
the Trust on September 28, 2020.
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Part-Time Employment Agreement dated November 30, 2022 between Woodbridge Wind-Down Entity and David Mark Kemper, incorporated herein by reference to the Current Report on Form 8-K filed
by the Trust on December 1, 2022.
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Indemnification Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed
by the Trust on December 13, 2019.
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Stipulation and Settlement Agreement between the United States and Woodbridge Liquidation Trust, as approved by order of the United States Bankruptcy Court for the District of Delaware
entered September 17, 2020, incorporated herein by reference to the Form 10-K filed by the Trust on September 28, 2020.
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|
Settlement Agreement dated August 6, 2021 by and among Mark Baker, Jay Beynon as Trustee for the Jay Beynon Family Trust DTD 10/23/1998, Alan and Marlene Gordon, Joseph C. Hull, Lloyd and
Nancy Landman, and Lilly A. Shirley on behalf of themselves and the proposed Settlement Class, Michael I. Goldberg, as Trustee for Woodbridge Liquidation Trust, and Comerica Bank, incorporated herein by reference to the Form 10-K filed by
the Trust on September 27, 2021.
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Certification of Liquidation Trustee pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Certification of Liquidation Trustee pursuant to 18 U.S.C. 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Findings of Fact, Conclusions of Law, and Order Confirming the First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and its Affiliated Debtors, entered
October 26, 2018, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019.
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|
101
|
The following financial statements from the Woodbridge Liquidation Trust Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, formatted in eXtensible Business Reporting
Language (XBRL): (i) consolidated statements of net assets in liquidation as of December 31, 2023 and June 30, 2023, (ii) consolidated statements of changes in net assets in liquidation for the three months ended December 31, 2023 and 2022,
(iii) consolidated statements of changes in net assets in liquidation for the six months ended December 31, 2023 and 2022 and (iv) the notes to the consolidated financial statements. XBRL Instance Document does not appear in the Interactive
Data File because its XBRL tags are embedded within the Inline XBRL document.
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104
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Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)
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Woodbridge Liquidation Trust
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||
Date: February 12, 2024
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By:
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/s/ Michael I. Goldberg
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Michael I. Goldberg,
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Liquidation Trustee
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