Table of Contents

		Page
Part I
Item 1.	Business	1
Item 1A.	Risk Factors	1821
Item 1B.	Unresolved Staff Comments	2629
Item 1C.	Cybersecurity	29
Item 2.	Properties	2629
Item 3.	Legal Proceedings	2730
Item 4.	Mine Safety Disclosures	3035

Part II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3136
Item 6.	[Reserved]	32 37
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3338
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	4147
Item 8.	Financial Statements and Supplementary Data	4147
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	4147
Item 9A.	Controls and Procedures	4247
Item 9B.	Other Information	4247
Item 9C.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	4247

Part III
Item 10.	Directors, Executive Officers and Corporate Governance	4348
Item 11.	Executive Compensation	4651
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	5258
Item 13.	Certain Relationships and Related Transactions, and ~~Supervisory Board Member~~Director Independence	5359
Item 14.	Principal Accounting Fees and Services	5562

Part IV
Item 15.	Exhibits and Financial Statement Schedules	5663

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

The Woodbridge Liquidation Trust (the “Trust”) is a Delaware statutory trust. It was formed on February 15, 2019, the effective date (the “Plan Effective Date”) of the First Amended Joint Chapter 11 Plan of Liquidation dated August 22, 2018 of Woodbridge Group of Companies, LLC and Its Affiliated Debtors (the “Plan”). The Trust was formed to implement the terms of the Plan. The Plan was confirmed by the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on October 26, 2018 in the jointly administered chapter 11 bankruptcy cases (the “Bankruptcy Cases”) of Woodbridge Group of Companies, LLC and its affiliated chapter 11 debtors (collectively, the “Debtors”), Case No. 17-12560 (JKS).

In this Annual Report on Form 10-K (“Annual Report”), all beneficial interests in the Trust, including both Class A Liquidation Trust Interests (“Class A Interests”) and Class B Liquidation Trust Interests (“Class B Interests”), are collectively referred to as “Liquidation Trust Interests.”

The material terms of the Plan which relate to holders of Liquidation Trust Interests (the “Interestholders”) are described in this Annual Report, as well as in the Disclosure Statement for the First Amended Joint Chapter 11 Plan of Liquidation of The Woodbridge Group of Companies, LLC and Its Affiliated Debtors (the “Disclosure Statement”). The Disclosure Statement was approved by the Bankruptcy Court on August 22, 2018 and was distributed or made available to creditors of the Debtors and other parties in interest pursuant to Section 1125 of Title 11 of the United States Code (the “Bankruptcy Code”).

A copy of the Plan is referenced as Exhibit 2.1 to this Annual Report. A copy of the order of the Bankruptcy Court confirming the Plan is referenced as Exhibit 99.1 hereto.

Statements Regarding Forward-Looking Statements. This Annual Report, and other filings by the Trust with the U.S. Securities and Exchange Commission (“SEC”), or written statements made by the Trust in press releases or in other communications, oral or written, may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act” and, together with the Securities Act, the “Acts”). Such statements include, without limitation, ~~financial guidance and projections and~~ statements ~~with respect~~(other than historical facts) that address future plans, goals, expectations, activities, events or developments. The Trust has tried, where possible, to expectation of future financial condition, changes in net assets in liquidation, cash flows, plans, targets, goals, objectives, performance, and termination and dissolution of the Trust. Such forward-looking statements also include statements that are preceded by, followed by, or that include theuse words such as “anticipates”, “if”, “believes,” “estimates,” “plans,” “expects,” “intends,” ~~“is anticipated,” “will continue,” “project,” “may,” “could,” “would,”~~“forecasts”, “initiative, “objective”, “goal, “projects”, “outlook”, “priorities”, “target”, “evaluate”, “pursue”, “seek”, “potential”, “continue”, “designed”, “impact”, “may”, “could”, “would”, “should”, “will” and similar expressions ~~and all other statements that are not historical facts. All such~~to identify forward-looking statements. Forward-looking statements are based on ~~the Trust’s~~ current expectations and ~~involve~~are subject to substantial risks, uncertainties and ~~uncertainties~~other factors, many of which ~~may cause actual results to differ materially from those set forth in such statements.~~are beyond our control and not of all of which can be predicted by the Trust. Such risks and uncertainties include the amount of ~~sales proceeds, timing of sales of real estate assets, amount of~~ funds needed for ~~warranty~~construction defect and other claims, ~~punch list items and holding costs of~~ the ~~single-family homes,~~ amount of general and administrative costs, the number and amount of successful litigations and/or settlements and the ability to recover thereon, the amount of funding required to continue litigations, the continuing impact of the COVID-19 pandemic and other global health issues, interest rates, adverse weather conditions in the regions in which properties to be sold are located, inflation, domestic and global economic and political conditions, changes in tax and other governmental rules and regulations applicable to the Trust and its subsidiaries, and other risks identified and described in “Item 1A. Risk Factors” of this Annual Report. Accordingly, the Trust cannot guarantee that any forward-looking statements will be realized, as actual results may differ materially from those identified or implied in any forward-looking statement. These risks and uncertainties are beyond the ability of the Trust to control, and in many cases, the Trust cannot predict the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements.

In connection with the “safe harbor” provisions of the Acts, the Trust has identified and is disclosing important factors, risks and uncertainties that could cause its actual results to differ materially from those projected in forward-looking statements made by the Trust, or on the Trust’s behalf. (See “Item 1A. Risk Factors” of this Annual Report.) These cautionary statements are to be used as a reference in connection with any forward-looking statements. The factors, risks and uncertainties identified in these cautionary statements are in addition to those contained in any other cautionary statements, written or oral, which may be made or otherwise addressed in connection with a forward-looking statement or contained in any of the Trust’s subsequent filings with the SEC. Because of these factors, risks and uncertainties, the Trust cautions against placing undue reliance on forward-looking statements. Although the Trust believes that the assumptions underlying forward-looking statements are currently reasonable, any of the assumptions could be incorrect or incomplete, and there can be no assurance that forward-looking statements will prove to be accurate. Forward-looking statements speak only as of the date on which they are made. Except as may be required by law, the Trust does not undertake any obligations to modify, update or revise any forward-looking statement to take into account or otherwise reflect subsequent events, corrections in or revisions of underlying assumptions, or changes in circumstances arising after the date that the forward-looking statement was made.

Table of Contents

Part I

Item 1.

Business

A.~~Overview~~

Overview

The Trust and its wholly-owned subsidiary Woodbridge Wind-Down Entity LLC (the “Wind-Down Entity”) were formed pursuant to the Plan. The purpose of the Trust is to prosecute various causes of action owned by the Trust (the “Causes of Action”), to litigate and resolve claims filed against the Debtors, to pay allowed administrative and priority claims against the Debtors (including professional fees), to receive cash from certain sources and, in accordance with the Plan, to make distributions of cash to Interestholders subject to the retention of various reserves and after the payment of Trust expenses and administrative and priority claims. The Trust has no other purpose. Sources and potential sources of cash include the net proceeds from settlements of various Causes of Action, remittances of cash distributed from the Wind-Down Entity, “Fair Fund” recoveries from the SEC, and assets forfeited to the U.S. Department of Justice by former owners and principals of the Debtors (“Forfeited Assets”).

The purpose of the Wind-Down Entity is, through its subsidiaries (the “Wind-Down Subsidiaries” and, with the Wind-Down Entity, the “Wind-Down Group”), to develop (as applicable), market, and sell the real estate assets owned by the Wind-Down Subsidiaries to generate cash to be remitted to the Trust after the payment of Wind-Down Group expenses and subject to the retention of various reserves. The Trust, the Remaining Debtors (as defined in Section B of this Item 1) and the Wind-Down Group are collectively referred to in this ~~Form 10-K~~Annual Report as the “Company.”

Most of the Debtors filed for chapter 11 bankruptcy protection in December 2017 (certain other Debtors filed cases on later dates). During the Bankruptcy Cases, the major constituencies reached agreements on several matters, including new management for the Debtors, the manner and timing of the liquidation of the Debtors’ assets, and relative priorities to such distributions among creditors. Certain of these agreements were embodied in the Plan, which was confirmed in October 2018 and became effective on February 15, 2019. Under the Plan, holders of certain claims against the Debtors received Class A Interests, which became registered pursuant to Section 12(g) of the Exchange Act on December 24, 2019.

The Trust will be terminated upon the first to occur of (i) the making of all distributions required to be made and a determination by the Liquidation Trustee that the pursuit of additional Causes of Action held by the Trust is not justified or (ii) February 15, 2024. However, the Bankruptcy Court may approve an extension of the term if deemed necessary to facilitate or complete the recovery on, and liquidation of, the Trust’s assets.

During the year ended June 30, 2023, the Company concluded that its liquidation activities would not be completed by February 15, 2024, the current outside termination date of the Trust, for a number of reasons. First, there have been significant delays in certain legal proceedings where the Company is the plaintiff as more fully described in "Item 3. Legal Proceedings". Second, a construction defect claim has been asserted against one of the Wind-Down Subsidiaries by the buyer of one of the subsidiary’s single-family homes. The subsidiary has tendered the claim to its insurance carrier. At this time, the amount of the liability exposure, if any, has not been determined and it is not known if the subsidiary has any exposure in excess of its insurance coverage. The subsidiary is investigating the claim, including the extent and causes of the alleged damage and the identification of other potentially responsible persons. Based on the foregoing, the Company currently projects a revised estimated completion date for the Company’s operations of approximately March 31, 2026.

The Company is required to file a motion with the Bankruptcy Court to extend the termination date of the Trust beyond February 15, 2024. The motion is required to be filed within six months before February 15, 2024. The Company expects that the motion will be filed as required and that the Bankruptcy Court will grant the motion as the extension is needed to pursue additional Trust actions that are expected to yield additional proceeds to the Trust and to address the construction defect claim.

The Trust is administered by a Liquidation Trustee. The Liquidation Trustee is authorized, subject to the oversight of a six-member supervisory board (the “Supervisory Board”), to carry out the purposes of the Trust. The Wind-Down Entity iswas initially managed by a three-member board of managers (the “Board of Managers”), one of whom iswas the ~~chief executive officer.~~Chief Executive Officer. The Board of Managers was reduced to two members following the effectiveness of the Chief Executive Officer’s resignation on December 31, 2022, and was reduced to one person on April 29, 2023, following the sale of the last single-family home and the resignation of Richard Nevins.

Table of Contents

Part I

Item 1.

Business (Continued)

Pursuant to the Plan and the Liquidation Trust Agreement of the Trust (as amended, the “Trust Agreement”), a copy of which is referenced as Exhibits 3.2, 3.3 and 3.4 to this Annual Report, distributions to Interestholders are net of any costs and expenses incurred by the Trust, including in connection with administering the Trust and litigating or otherwise resolving the various Causes of Action and disputed claims. Amounts withheld from distribution may include cost of collecting, administering, distributing, and liquidating the Trust assets such as fees and expenses of the Liquidation Trustee, ~~reserves for contingent liabilities,~~ premiums for directors’ and officers’ insurance, and fees and expenses of attorneys and consultants. Furthermore, cash received from the Wind-Down Group is net of the payment of Wind-Down Group expenses and the retention of reserves by the Wind-Down ~~Group.~~Group for contingent liabilities, including potential construction defect claims.

Distributions will be made by the Trust only to the extent that the Trust has sufficient net assets ~~(over amounts retained for contingent liabilities and future costs and expenses, among other things)~~ to make such payments in accordance with the Plan and the Trust Agreement. No distribution is required to be made to any Interestholder unless such Interestholder is to receive in such distribution at least $10.00. If the Trust mails a distribution check to an Interestholder and the Interestholder fails to cash the check within 180 calendar days, or if the Trust mails a distribution check to an Interestholder and such check is returned to the Trust as undeliverable and is not claimed by the Interestholder within 180 days, then the Interestholder may not only lose its right to the amount of that distribution, but also may be deemed to have forfeited its right to any reserved and future distributions under the Plan.

Distributions will be made at the sole discretion of the Liquidation Trustee in accordance with the provisions of the Plan and the Trust Agreement. Since the Plan Effective Date, the Liquidation Trustee and the Supervisory Board have authorized ~~ten~~eleven cash distributions to the holders of Class A Interests.On August 3, 2023, at the recommendation of the Liquidation Trustee, the Trust suspended the making of additional Trust distributions pending the result of the investigation of a construction defect claim asserted against one of the Wind-Down Subsidiaries by the buyer of one of the subsidiary's single-family homes.

~~Table of Contents~~

~~Part I~~

~~Item 1. Business (Continued)~~

Since its inception, the Wind-Down Entity has made substantial progress toward completion of its liquidation activities and ~~is nearing the end of the liquidation of its~~has liquidated all but two real estate ~~portfolio.~~assets with a net carrying value of approximately $0.77 million. Holders of Liquidation Trust Interests are advised that future distributions from the Trust, if any, will be ~~limited. Once the Company’s remaining real property assets have been liquidated~~limited and ~~the net proceeds resulting therefrom, net of reserves, have been distributed, further distribution(s)~~ will be ~~solely~~materially reliant on future recoveries from litigation, net of accrued liquidation costs, including amounts for potential construction defect claims, which are uncertain and the amount and timing of which, if any, are difficult to determine.

Table of Contents

Part I

Item 1.

Business (Continued)

The following table shows the Trust’s ~~ten~~eleven cash distributions to Class A Interestholders since its February 15, 2019 Plan Effective Date:

The Trust’s distributions have primarily come from the net proceeds of real estate sales, except for the ninth distribution, which included the Trust’s net proceeds from the settlement of litigation against Comerica Bank.

Table of Contents

Part I

Item 1.

Business (Continued)

~~Item 1. Business (Continued)~~

Reflective of the progress toward the completion of its liquidation activities, the following two tables show the ~~Trust’s~~Wind-Down Group’s decreasing number of real estate assets and amount of net carrying values of the real estate assets since the Plan Effective Date and through June 30, ~~2022:~~2023:

~~Table of Contents~~

~~Part I~~

~~Item 1. Business (Continued)~~

The Trust’s distributed cash through June 30, ~~2022 and~~2023, together with its distributions payable as of June 30, ~~2022~~2023, totaled approximately ~~$401.2~~$426.55 million. The Trust’s consolidated net assets in liquidation as of June 30, ~~2022 was~~2023 were approximately ~~$34.39~~$6.77 million.

B.~~Organization~~Table of ~~the Company~~Contents

Part I

Item 1.

Business (Continued)

B.	Organization of the Company

On the Plan Effective Date, the Plan was implemented, and the Trust and the Wind-Down Entity were formed.

~~1. The Trust~~

The Trust

The Trust was established for the benefit of its Interestholders and for the purpose of collecting, administering, distributing and liquidating the Trust assets in accordance with the Plan and the Trust Agreement, to resolve disputed claims asserted against the Debtors, to litigate and/or settle the Causes of Action, and to pay certain allowed claims and statutory fees, in each case to the extent required by the Plan. The Trust has no objective to continue or engage in the conduct of a trade or business, except to the extent reasonably necessary to, and consistent with, the purpose of the Trust as set forth in the Plan.

By operation of the Plan, (i) the real estate assets of the Debtors were automatically vested in the Wind-Down Group; (ii) all existing equity interests in Woodbridge Group of Companies, LLC and Woodbridge Mortgage Investment Fund 1, LLC (together, the “Remaining Debtors”) were cancelled and extinguished and new equity interests in the Remaining Debtors, representing all of the issued and outstanding equity interests of the Remaining Debtors, were issued to the Trust; and (iii) all of the Debtors other than the Remaining Debtors were automatically dissolved.

As of the Plan Effective Date, each of the Debtors’ directors, officers and managers was terminated and the Trust succeeded to all of their powers in respect of the assets vested in the Trust. Each of the Debtors other than the Remaining Debtors was automatically dissolved on the Plan Effective Date pursuant to the Plan.

By operation of the Plan, the following assets were transferred to the Trust on the Plan Effective Date:

an aggregate of $5.0 million in cash from the Debtors for the purpose of funding the Trust’s initial expenses of operation;

the following Causes of Action: (i) all claims and causes of action formerly held or acquired by the Debtors and (ii) all causes of action contributed by Noteholders or Unitholders (as defined in Section C of this Item 1) to the Trust as “Contributed Claims” pursuant to the Plan;

all of the outstanding membership interests of the Wind-Down Entity; and

certain other non-real estate related assets and entities.

~~2. The Wind-Down Entity~~Table of Contents

Part I

Item 1.

Business (Continued)

2.	The Wind-Down Entity

On the Plan Effective Date and by operation of the Plan, the Wind-Down Entity became a wholly-owned subsidiary of the Trust. The Wind-Down Entity was organized for the purpose of accepting, holding, and administering the Debtors’ real estate assets and distributing the net proceeds of liquidating such real estate assets to the Trust in accordance with the Plan and the Limited Liability Company Agreement of the Wind-Down Entity ~~(the~~(as amended, the “Wind-Down Entity LLC Agreement”), consistent with the purposes of the Trust. As of the Plan Effective Date, the Wind-Down Group received, in the aggregate, assets consisting of approximately $31.34 million in cash and approximately $585.01 million of real estate and other assets.

C.	4 ~~Table of Contents~~ ~~Part I~~ ~~Item 1. Business (Continued)~~ C.Material Developments Leading to Confirmation of the Plan

Prior to the commencement of the Bankruptcy Cases, the Debtors were part of a group of more than 275 affiliated entities formed by, and formerly controlled by, Robert Shapiro (“Shapiro”) which were used by Shapiro to perpetrate a large-scale “Ponzi” scheme. As part of the scheme, Shapiro is believed to have used the group of affiliated entities to raise more than $1.22 billion from over 10,000 investors nationwide. Money was raised in the form of one of two primary products: (1) five-year private placement products that were styled, marketed or sold as “units” in Woodbridge Mortgage Investment Fund 1, LLC, Woodbridge Mortgage Investment Fund 2, LLC, Woodbridge Mortgage Investment Fund 3, LLC, Woodbridge Mortgage Investment Fund 3a, LLC, Woodbridge Mortgage Investment Fund 4, LLC, Woodbridge Commercial Bridge Loan Fund 1, LLC, and Woodbridge Commercial Bridge Loan Fund 2, LLC (each, a “Fund Debtor”) and (2) purportedly secured promissory products of 12 to 18 months that were styled, marketed or sold as “notes,” “mortgages” or “loans” by one or more Fund Debtors. In this Annual Report, any and all investments, interests or other rights with respect to any of the Fund Debtors that were styled, marketed or sold as “units” are referred to as “Units” and the holders of Units are referred to as “Unitholders.” Similarly, in this Annual Report, any and all investments, interests or other rights with respect to any of the Fund Debtors that were styled, marketed or sold as “notes,” “mortgages” or “loans” are referred to as “Notes” and the holders of Notes are referred to as “Noteholders.”

The proceeds of the sale of Units and Notes were not used for the purposes that were represented to investors, but were instead used to pay (i) over $400 million of “interest” and “principal” to existing investors, (ii) approximately $64.5 million in commissions to sales agents engaged in the sale of the investments, and (iii) at least $21.2 million for the personal benefit of Shapiro or his related entities or family members (including, for example, the purchase of luxury items, travel, wine, and the like). Additionally, the Debtors and Shapiro used investor funds to purchase at least 193 residential and commercial properties located primarily in Los Angeles, California, and Carbondale, Colorado. The Debtors had one segment, known as “Riverdale,” which did, in fact, originate loans to unrelated third parties, but the dollar amount of these third-party loans was a fraction of the amount of the loans made to disguised affiliates.

In the years leading up to the commencement of their Bankruptcy Cases, the Debtors faced a variety of inquiries from state and federal regulators. In particular, in or around September 2016, the SEC began investigating certain of the Debtors (and certain non-debtor affiliates) in connection with possible securities law violations, including the alleged offer and sale of unregistered securities, the sale of securities by unregistered brokers, and the commission of fraud in connection with the offer, purchase, and sale of securities.

In late 2017, the Debtors found it increasingly difficult to raise new capital from investors. The Debtors were unable to make the December 1, 2017 interest and principal payments due on the Notes. Shapiro hired an outside financial restructuring firm and a chief restructuring officer to manage the Debtors on or about December 1, 2017, and on December 4, 2017 chapter 11 bankruptcy cases for 279 of the Debtors were commenced (cases for the 27 other Debtors were filed on later dates). An immediate effect of commencement of the Bankruptcy Cases was the imposition of the automatic stay under Bankruptcy Code section 362(a), which, with limited exceptions, enjoined the commencement or continuation of all collection efforts by creditors, the enforcement of liens against property of the Debtors, and the continuation of litigation against the Debtors during the pendency of the Bankruptcy Cases. Under Chapter 11 of the Bankruptcy Code, a company may continue to operate its business under the supervision of the Bankruptcy Court while it attempts to reorganize.

Table of Contents

Part I

Item 1.

Business (Continued)

As of the commencement of the Bankruptcy Cases, certain discovery-related disputes regarding administrative subpoenas issued by the SEC were proceeding before the United States District Court for the Southern District of Florida, but the SEC had not yet asserted any claims against any of the Debtors or their affiliates. Subsequent to the commencement of the Bankruptcy Cases, the SEC commenced legal proceedings in the Florida district court against, among other defendants, Shapiro, a trust related to Shapiro or his family, and the Debtors.

~~Table of Contents~~

~~Part I~~

~~Item 1. Business (Continued)~~

In addition to the SEC investigation, certain of the Debtors received information requests from state securities regulators in approximately 25 states. As of the commencement of the Bankruptcy Cases, regulators in eight states had filed civil or administrative actions against one or more of the Debtors and certain of their sales agents, alleging they engaged in the unregistered offering of securities in their respective jurisdictions and unlawfully acted as unregistered investment advisors or broker-dealers. Six states—Massachusetts, Texas, Arizona, Pennsylvania, South Dakota and Michigan—entered permanent cease and desist orders against one or more of the Debtors related to their alleged unregistered sale of securities. Several of these inquiries were resolved prior to the commencement of the Bankruptcy Cases through settlements, which included the entry of consent orders. Certain of the Debtors entered into consent orders with California, Arizona, Michigan, Oregon, Idaho, and Colorado during the Bankruptcy Cases.

On December 14, 2017, the Office of the United States Trustee for the District of Delaware (the “U.S. Trustee’s Office”) formed the Official Committee of Unsecured Creditors (the “Unsecured Creditors’ Committee”). On December 20, 2017, the SEC filed its action in the Florida district court, as discussed above, detailing much of the massive fraud perpetrated by Shapiro before the commencement of the Bankruptcy Cases. The SEC asked the Florida district court to appoint a receiver who would displace the Debtors’ management in the Bankruptcy Cases, but the Florida district court declined to immediately act on this request in light of the pending Bankruptcy Cases.

On December 28, 2017, the Unsecured Creditors’ Committee filed a motion seeking appointment of a chapter 11 trustee to replace the Debtors’ management team, arguing that the team was “hand-picked by Shapiro, and ha[d] done his bidding both before and after the filing of these cases.” The SEC later made a similar request, arguing that the new “independent” management team was “completely aligned [with Shapiro] in controlling this bankruptcy.”

On or about January 23, 2018, the Debtors, the Unsecured Creditors’ Committee, the SEC, and groups of Noteholders and Unitholders entered into a term sheet (the “Joint Resolution”) that resolved the trustee motions and several other matters. The Joint Resolution included, among other provisions, the following key provisions:

•

A new board of managers (with no ties whatsoever to Shapiro) was formed to govern the Debtors (the “New Board”). The New Board consisted of Richard Nevins, M. Freddie Reiss, and Michael Goldberg.

The New Board was empowered to select a CEO or CRO, subject to the consent of the Unsecured Creditors’ Committee and the SEC.

The New Board was empowered, subject to the SEC’s consent, to select new counsel for the Debtors or to re-confirm Gibson Dunn & Crutcher LLP as counsel for the Debtors.

•

The holders of Units were permitted to form a single one- or two-member fiduciary Unitholder committee (the “Unitholder Committee”) to advocate for the interests of Unitholders.

•

The holders of Notes were permitted to form a single six- to nine-member fiduciary Noteholder committee (the “Noteholder Committee”) to advocate for the interests of Noteholders.

As authorized by the Joint Resolution, the New Board selected Frederick Chin to serve as the Chief Executive Officer and Bradley D. Sharp to serve as the Chief Restructuring Officer during the pendency of the Bankruptcy Cases. Under the direction of the New Board, the Debtors also retained and employed Development Specialists, Inc. as the Debtors’ restructuring advisor and Klee, Tuchin, Bogdanoff & Stern LLP (n/k/a KTBS Law LLP) as new bankruptcy co-counsel to represent them in the Bankruptcy Cases with Young Conaway Stargatt & Taylor LLP.

Table of Contents

Part I

Item 1.

Business (Continued)

On April 16, 2018, the Debtor defendants in the Florida proceedings entered into a consent agreement with the SEC and consented to the entry of a judgment. Under the consent agreement and the judgment, the Debtors agreed, among other things, that (i) the Debtor defendants would be permanently enjoined from violations of certain sections of the Securities Act and the Exchange Act; (ii) upon motion of the SEC, the Florida district court would determine whether it was appropriate to order disgorgement and/or a civil penalty against the Debtor defendants, and if so, the amount of any such disgorgement and/or civil penalty; and (iii) in connection with any hearing regarding disgorgement and/or a civil penalty, inter alia, the Debtor defendants would be precluded from arguing that they did not violate the federal securities laws as alleged in the SEC action and the Debtor defendants would not challenge the validity of the consent agreement or judgment. On May 1, 2018, the Bankruptcy Court approved the consent agreement and the judgment. On May 21, 2018, the Florida district court entered the judgment against the Debtor defendants in the SEC action and entered an order administratively closing such action. The Debtors reached a settlement with the SEC to resolve the disgorgement and civil penalty claims asserted by the SEC against the Debtor defendants.

~~Table of Contents~~

~~Part I~~

~~Item 1. Business (Continued)~~

During the Bankruptcy Cases, the Debtors sold numerous parcels of owned real property, in each case with Bankruptcy Court approval. Additionally, the major constituencies in the Bankruptcy Cases reached agreements on several matters, including new management for the Debtors, the manner and timing of the liquidation of the Debtors’ assets, and the relative priorities to such distributions among creditors, certain of which agreements were embodied in the Plan.

Under the Plan, on the Plan Effective Date, former Noteholders, Unitholders, and general unsecured creditors holding allowed claims were granted Class A Interests in exchange for their claims. Pursuant to a compromise in the Plan, former Unitholders also received Class B Interests (Unitholders received Class A Interests on account of only 72.5% of their allowed Unit Claims and received Class B Interests on account of the remaining 27.5% of their allowed Unit Claims).

The Plan incorporated a “netting” mechanism for Note and Unit investors whereby such investors received Liquidation Trust Interests based on their “Net” Note Claim (defined as claims arising from or in connection with any Notes) or their “Net” Unit Claim (defined as claims arising from or in connection with any Units). The netting was achieved by reducing the Note or Unit claim by the aggregate amount of all pre-bankruptcy distributions received by the Noteholder or Unitholder (other than return of principal). For example, a Noteholder holding a Note with a face amount of $100,000 who received $10,000 of “interest” before the Debtors filed bankruptcy would be deemed to hold a Net Note Claim of $90,000. Such Noteholder would receive Class A Interests on account of a $90,000 Net Note Claim.

On December 24, 2019, the Trust’s Registration Statement on Form 10 became effective under the Exchange Act. The trading symbol for the Trust’s Class A Interests is WBQNL. Bid and ask prices for the Trust’s Class A Interests are quoted on the OTC Link^® ATS, the SEC-registered alternative trading system. The Class A Interests are eligible for the Depository Trust Company’s Direct Registration (DRS) services. The Class B Interests are not registered with the SEC.

D.~~Plan Provisions Regarding the Company~~

D.	Plan Provisions Regarding the Company

1.	Corporate governance provisions

Under the Plan and the Wind-Down Entity LLC Agreement, the Trust is required at all times to be the sole and exclusive owner of all membership interests of the Wind-Down Entity. The Trust is prohibited from selling, transferring, or otherwise disposing of its membership interests in the Wind-Down Entity without approval of the Bankruptcy Court, and the Wind-Down Entity is prohibited from issuing any equity interest to any other person. ~~Under~~

Formerly under the Plan and the Wind-Down Entity LLC Agreement, the Wind-Down Entity iswas required to be managed by a three-member ~~board~~Board of ~~managers,~~Managers, one of whom iswas required to be the ~~chief executive officer. Since~~Chief Executive Officer. Accordingly, the ~~Plan Effective Date, the board of managers of the Wind-Down Entity (the “~~Board of Managers~~”) has~~ initially consisted of Richard Nevins, M. Freddie Reiss, and Frederick Chin, with Mr. Chin as the Chief Executive Officer of the Wind-Down Entity. On November 30, 2022, the Wind-Down Entity LLC Agreement was amended to reduce the Wind-Down Entities’ Board of Managers to two members and to eliminate the ~~chief executive officer~~requirement that the Chief Executive Officer serve as a member of the Board of Managers, effective upon Mr. Chin’s resignation on December 31, 2022. Marion W. Fong was appointed to serve as Chief Executive Officer of the Wind-Down Entity ~~has been Frederick Chin. The~~effective as of January 1, 2023. Ms. Fong is not a member of the Board of Managers. On March 27, 2023, the Wind-Down Entity ~~is also conducting business under~~LLC Agreement was further amended and the ~~name “Viewpoint Collection.”~~Board of Managers was reduced to one person, M. Freddie Reiss, following the sale of the last single-family home and the resignation of Richard Nevins on April 29, 2023.

Table of Contents

Part I

Item 1.

Business (Continued)

The Wind-Down Entity is required to advise the Trust regarding its affairs on at least a monthly basis, reasonably make available such information as is necessary for any reporting by the Trust and advise the Trust of material actions. Excess cash of the Wind-Down Entity (cash that is in excess of budgeted reserve for ongoing operations and other anticipated obligations including potential construction defect claimsand expenses as determined by the Board of Managers) is required to be remitted to the Trust on a quarterly basis, and the Wind-Down Entity is restricted in its ability to invest or gift any of its assets or make asset acquisitions.

The Bankruptcy Court has retained certain jurisdiction regarding the Trust, the Liquidation Trustee, the Supervisory Board, the Wind-Down Entity, the Board of Managers, and assets of the Trust and the Wind-Down Entity, including the determination of all disputes arising out of or related to administration of the Trust and the Wind-Down Entity.

~~Table of Contents~~

~~Part I~~

~~Item 1. Business (Continued)~~

The Wind-Down Entity is also conducting business under the name “Viewpoint Collection.”

2.	Treatment under the Plan of holders of claims against and equity interests in the Debtors

The Plan identified 12 types of Claims against and equity interests in the Debtors, eight of which were “classified” (i.e., placed into formalized classes under the Plan) and four of which are not. Claims required to be paid in full under the Plan are referred to as “Unimpaired Claims.” Four types of claims are not classified—(i) claims arising under Bankruptcy Code sections 503(b), 507(a)(2), 507(b), or 1114(e)(2) (“Administrative ~~Claims”~~Claims”), (ii) claims by professionals employed in the Bankruptcy Cases pursuant to Bankruptcy Code sections 327, 328, 1103, or 1104 for compensation or reimbursement of costs and expenses relating to services provided during the period from the Petition Date through and including the Plan Effective Date (“Professional Fee ~~Claims”~~Claims”), (iii) tax claims entitled to priority under Bankruptcy Code section 507(a)(8) (“Priority Tax ~~Claims”~~Claims”), and (iv) debtor-in-possession financing claims (“DIP ~~Claims”~~Claims”). The foregoing claims are all Unimpaired Claims and have been or will be paid in full. Although the amounts may be subject to negotiation based on the Debtors’ and creditors’ records, and to ultimate determination, if necessary, in the Bankruptcy Court, liabilities resulting from any such Administrative Claims, Professional Fee Claims, Priority Tax Claims, and DIP Claims that are allowed are analogous, in substance, to accounts payable. As of September ~~23, 2022,~~27, 2023, there were no allowed and unpaid DIP ~~claims.~~Claims. As of September ~~23, 2022,~~27, 2023, there were no unpaid Administrative Claims, approximately $.18 million of unpaid Priority Tax Claims and no remaining unpaid Professional Fee Claims.

The remaining eight types are claims and equity interests that have been classified. Classified claims and equity interests are treated in accordance with the priorities established under the Bankruptcy Code.

The classified claims and equity interests under the Plan are the following (each, a “Class” of claims or interests):

“Class 1 Claims” or “Other Secured Claims,” which are claims, other than DIP Claims, that are secured by a valid, perfected, and enforceable lien on property in which the Debtors have an interest, which lien is valid, perfected, and enforceable under applicable law and not subject to avoidance under the Bankruptcy Code or applicable non-bankruptcy law.

“Class 2 Claims” or “Priority Claims,” which are claims that are entitled to priority under Bankruptcy Code section 507(a), other than Administrative Claims and Priority Tax Claims.

“Class 3 Claims” or “Standard Note Claims,” which are any Note Claims other than Non-Debtor Loan Note Claims (as defined below).

“Class 4 Claims” or “General Unsecured Claims,” which are unsecured, non-priority claims that are not Note Claims, Subordinated Claims (as defined below), or Unit Claims.

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Part I

Item 1.

Business (Continued)

“Class 5 Claims” or “Unit Claims,” which are Unit Claims (as defined in Item 1, Section C of this Annual Report).

“Class 6 Claims” or “Non-Debtor Loan Note Claims,” which are any Note Claims that are or were purportedly secured by an unreleased assignment or other security interest in any loans or related interests as to which the lender was a Debtor and the underlying borrower actually is or actually was a person that is not a Debtor.

“Class 7 Claims” or “Subordinated Claims,” which are collectively, (a) any claim, secured or unsecured, for any fine, penalty, or forfeiture, or for multiple, exemplary, or punitive damages, to the extent such fine, penalty, forfeiture, or damages are not compensation for actual pecuniary loss suffered by the holder of such claim and (b) any other claim that is subordinated to General Unsecured Claims, Note Claims, or Unit Claims pursuant to Bankruptcy Code section 510, a final order of the Bankruptcy Court, or by consent of the creditor holding such claim.

“Class 8” or “Equity Interests,” which are all previously issued and outstanding common stock, preferred stock, membership interests, or other ownership interests in any of the Debtors outstanding immediately prior to the Plan Effective Date.

Holders of Class 1 Claims are creditors of the Wind-Down Entity, and holders of Class 2 Claims are creditors of the Trust. Although the amounts may be subject to negotiation based on the Debtors’ and creditors’ records, and to ultimate determination, if necessary, in the Bankruptcy Court, liabilities resulting from any such claims that are allowed are analogous, in substance, to accounts payable. As of September ~~23, 2022,~~27, 2023, there were no allowed and unpaid Class 1 Claims or Class 2 Claims.

~~Table of Contents~~

~~Part I~~

~~Item 1. Business (Continued)~~

Under the Plan, three Classes of claims, when the claims are allowed under the Plan, entitle the holders thereof to become holders of Liquidation Trust Interests. The holders of these claims belonged, as of the Petition Date, to one or more of the following categories:

Standard Note Claims (Class 3)

General Unsecured Claims (Class 4)

Unit Claims (Class 5)

Standard Note Claims are Claims arising from any and all investments, interests or other rights with respect to any of the seven Debtors identified as a “Fund Debtor” under the Plan that were styled, marketed or sold as “notes,” “mortgages,” or “loans.” As of September ~~23, 2022,~~27, 2023, the aggregate outstanding amount of allowed Class 3 Standard Note Claims (net of prepetition distributions of interest) was approximately ~~$702.64~~$702.68 million, including those Class 6 Non-Debtor Loan Note Claims that were reclassified as Class 3 Standard Note Claims in accordance with the Plan. See “Holders of Non-Debtor Loan Note Claims” below. The Trust’s estimate of the aggregate outstanding amount of disputed Class 3 Standard Note Claims as of September ~~23, 2022~~27, 2023 is approximately ~~$0.05~~$0.02 million (in each case, net of prepetition distributions of interest).

General Unsecured Claims include any unsecured, non-priority claim asserted against any of the Debtors that is not a Note Claim, Subordinated Claim or Unit Claim, and generally include the claims of trade vendors, landlords, general liability claimants, utilities, contractors, employees and numerous others. As of September ~~23, 2022,~~27, 2023, the aggregate outstanding amount of allowed Class 4 General Unsecured Claims was approximately ~~$5.98~~$5.97 million, and the Trust estimates that the aggregate outstanding amount of disputed Class 4 General Unsecured Claims as of September ~~23, 2022~~27, 2023 was approximately ~~$0.41~~$0.23 million.

Unit Claims are Claims arising from any and all investments, interests or other rights with respect to any of the seven Debtors identified as a “Fund Debtor” under the Plan that were styled, marketed or sold as “units.” As of September ~~23, 2022,~~27, 2023, the aggregate outstanding amount of allowed Class 5 Unit Claims was approximately $178.77 million, and the Trust estimates that the aggregate outstanding amount of disputed Class 5 Unit Claims as of September ~~23, 2022~~27, 2023 was approximately $0.09 million (in each case, net of prepetition distributions of interest).

Table of Contents

Part I

Item 1.

Business (Continued)

Holders of allowed claims in Classes 3, 4 and 5 are deemed to hold an amount and class of Liquidation Trust Interests that is prescribed by the Plan based on the amount of their respective claims, as follows:

•

Each holder of an allowed claim in Class 3 (Standard Note Claims) is deemed to hold one (1) Class A Interest for each $75.00 of Net Note Claims held by the applicable Noteholder with respect to its Allowed Note Claims.

•

Each holder of an allowed claim in Class 4 (General Unsecured Claims) is deemed to hold one (1) Class A Interest for each $75.00 of allowed General Unsecured Claims held by the applicable creditor.

•

Each holder of an allowed claim in Class 5 (Unit Claims) is deemed to hold 0.725 of a Class A Interest and 0.275 of a Class B Interest for each $75.00 of Net Unit Claims held by the applicable Unitholder with respect to its allowed Unit Claims.

In addition, under the Plan, holders of Standard Note Claims and Unit Claims were permitted, at the time they cast their votes on the Plan, to elect to contribute their causes of action against any non-released persons to the Trust for prosecution (the “Contributed Claims”). The relative share of the Trust recoveries for any so electing Noteholder or Unitholder in respect of its respective Class 3 Claim or Class 5 Claim has been enhanced by having the amount that otherwise would be the applicable Net Note Claim or Net Unit Claim increased by a multiplier of 105%, referred to as the “Contributing Claimant’s Enhancement Multiplier.” The Plan releases the Debtors, the members of the New Board, the Unsecured Creditors’ Committee, the Noteholder Committee, and the Unitholder Committee, and any party related to such persons from liability, but generally excludes from such release any prepetition insider of any of the Debtors, any non-debtor affiliates of the Debtors or insider of any such non-debtor affiliates, any prepetition employee of any of the Debtors involved in the marketing or sale of Notes or Units, and any other person involved in such marketing, including certain persons identified on a schedule attached to the Plan.

Distributions of cash by the Trust on account of Class A Interests and Class B Interests are required to be made in accordance with a prescribed priority, referred to as the “Liquidation Trust Interests Waterfall.” (See “Part I, Item 1. Business, D. Plan Provisions Regarding the Company, 4. Liquidation Trust Interests under the Plan.”) Fractional Liquidation Trust Interests, if any, are rounded in accordance with the rounding convention established by the Plan.

~~Table of Contents~~

~~Part I~~

~~Item 1. Business (Continued)~~

Other Classes under the Plan include Subordinated Claims, Non-Debtor Loan Note Claims, and Equity Interests. Although holders of Subordinated Claims are not Interestholders of the Trust, they are deemed to have retained a residual right to receive any cash that remains in the Trust after the final administration of all the Trust assets and payment in full to holders of both Class A Interests and Class B Interests, including interest at the rate and to the extent set forth in the Plan. The Trust does not expect that there will be any such residual cash.

Table of Contents

Part I

Item 1.

Business (Continued)

3.	Assets and liabilities of the Company

The following is the Company’s consolidated statements of net assets in liquidation as of the Plan Effective Date and June 30, ~~2022~~2023 ($ in millions):

	Plan Effective Date		June 30, 2023

Net real estate assets held for sale, net	$	582.71	$	0.77
Cash and cash equivalents		36.02		25.70
Restricted cash		0.32		4.47
Other assets		2.29		2.65

Total assets	$	621.34	$	33.59

Accounts payable and accrued liabilities		5.78		0.04
Distributions payable		-		1.28
Accrued liquidation costs		232.07		25.50

Total liabilities	$	237.85	$	26.82

Net assets in liquidation:
Restricted for Qualifying Victims		-		3.49
All Interestholders		383.49		3.28

Total net assets in liquidation	$	383.49	$	6.77

Plan
Effective
Date June 30, 2022

Net real estate assets held for sale, net $ 582.71 $ 29.06
Cash and cash equivalents 36.02 96.81
Restricted cash 0.32 6.12
Other assets 2.29 5.83

Total assets $ 621.34 $ 137.82

Accounts payable and accrued liabilities $ 5.78 $ 0.12
Distributions payable - 68.77
Accrued liquidation costs 232.07 34.54

Total liabilities $ 237.85 $ 103.43

Net assets in liquidation:
Restricted for Qualifying Victims $ - $ 3.48
All Interestholders 383.49 30.91

Total net assets in liquidation $ 383.49 $ 34.39

The status of outstanding Unimpaired and Impaired Claims as of September ~~23, 2022~~27, 2023 is summarized below, with amounts in millions:

	Estimated Allowed Claims			Disputed Claims at Asserted Amount
Unimpaired Claims (Liabilities)	$	0.13		$	0.45
Impaired Claims (Beneficial Interests)	$	887.76	(a)	$	0.46

Estimated
Allowed
Claims

Disputed Claims
at Asserted
Amount

Unimpaired Claims (Liabilities) $ 0.13 $ 0.49
Impaired Claims (Beneficial Interests) $ 887.73
^(a)
$ 0.55

(a)

Includes an estimated $0.34 million of additional claims expected to be allowed from the approximate $0.46 million of disputed claims.

^(a)~~Includes an estimated $0.34 million of additional claims expected to be allowed from the approximate $0.55 million of disputed claims.~~

~~Table of Contents~~

~~Part I~~

~~Item 1. Business (Continued)~~

4.	Liquidation Trust Interests under the Plan

Each holder of an allowed claim in the Plan’s Class 3 (Standard Note Claims), Class 4 (General Unsecured Claims) and Class 5 (Unit Claims) was granted one or more beneficial interests in the Trust (a Liquidation Trust Interest) of a class (i.e. either Class A and/or Class B) and in an amount prescribed by the Plan and the Trust Agreement, as follows:

In the case of an allowed claim in the Plan’s Class 3 (Standard Note Claims), the holder was granted one (1) Class A Interest in the Trust for each $75.00 of Net Note Claims held by the applicable Noteholder with respect to its Allowed Note Claims. Allowed Net Note Claims are determined as the outstanding principal amount of Note Claims held by a particular Noteholder, minus the aggregate amount of all prepetition distributions (other than return of principal) received by such Noteholder.

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Part I

Item 1.

Business (Continued)

In the case of an allowed claim in the Plan’s Class 4 (General Unsecured Claims), the holder was granted one (1) Class A Interest in the Trust for each $75.00 of allowed General Unsecured Claims held by the applicable creditor.

In the case of an allowed claim in the Plan’s Class 5 (Unit Claims), the holder was granted 0.725 of a Class A Interest in the Trust and 0.275 of a Class B Interest in the Trust for each $75.00 of Net Unit Claims held by the applicable Unitholder with respect to its allowed Unit Claims. Allowed Net Unit Claims were determined as the outstanding principal amount of Unit Claims held by a particular Unitholder, minus the aggregate amount of all prepetition distributions (other than return of principal) received by such Unitholder.

The Plan permitted Noteholders and Unitholders to contribute certain causes of action (the Contributed Claims) to the Trust. In the case of any Noteholder or Unitholder that elected, on such holder’s Plan ballot, to contribute such holder’s Contributed Claims to the Trust, the relative share of Liquidation Trust Interests granted to any so electing Noteholder or Unitholder has been enhanced by increasing the amount that otherwise would be the applicable Net Note Claim or Net Unit Claim by the Contributing Claimant’s Enhancement Multiplier of 105% before converting such Net Note Claim or Net Unit Claim to Liquidation Trust Interests.

With respect to disputed claims, upon resolution of any disputed claims and to the extent such claims become allowed claims, holders of such Claims in the Plan’s Class 3, Class 4 and Class 5 will be granted Liquidation Trust Interests.

As of September ~~23, 2022,~~27, 2023, approximately ~~$887.39~~$887.42 million of Class 3, Class 4 and Class 5 Claims are allowed. The Trust estimates, as of September ~~23, 2022,~~27, 2023, that approximately $0.34 million of additional Class 3, Class 4 and Class 5 Claims will ultimately be allowed. As more such claims become allowed, additional Liquidation Trust Interests will be granted. The percentage recovery to be received by each Class A Interestholder will be based on (i) the amount of cash ultimately available for distribution to such holders; and (ii) the actual amount of Class 3, Class 4, and Class 5 Claims that ultimately become allowed.

The Plan provides for a Liquidation Trust Interests Waterfall that specifies the priority and manner of distribution of available cash, excluding distributions of the net proceeds from Forfeited Assets. On each distribution date, the Liquidation Trustee is required to distribute available cash as follows:

First, to each Interestholder of Class A Interests pro rata based on such Interestholder’s number of Class A Interests, until the aggregate amount of all such distributions on account of the Class A Interests equals the product of (i) the total number of all Class A Interests and (ii) $75.00;

Thereafter, to each Interestholder of Class B Interests pro rata based on such Interestholder’s number of Class B Interests, until the aggregate amount of all such distributions on account of the Class B Interests equals the product of (i) the total number of all Class B Interests and (ii) $75.00;

Thereafter, to each Interestholder of a Liquidation Trust Interest (whether a Class A Interest or a Class B Interest) pro rata based on such Interestholder’s number of Liquidation Trust Interests until the aggregate amount of all such distributions on account of the Liquidation Trust Interests equals an amount equivalent to interest, at a per annum fixed rate of 10%, compounded annually, accrued on the aggregate principal amount of all Net Note Claims, allowed General Unsecured Claims, and Net Unit Claims outstanding from time to time on or after December 4, 2017, treating each distribution of available cash made after the Plan Effective Date pursuant to the immediately preceding two subparagraphs as reductions of such principal amount; and

Thereafter, pro rata to the holders of allowed Subordinated Claims until such claims are paid in full, including interest, at a per annum fixed rate of 10% or such higher rate as may be specified in any consensual agreement or order relating to a given Holder, compounded annually, accrued on the principal amount of each allowed Subordinated Claim outstanding from time to time on or after December 4, 2017.

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Item 1.

Business (Continued)

~~Item 1. Business (Continued)~~

Pursuant to the Plan and the Trust Agreement, distributions to Interestholders are net of any costs and expenses incurred by the Trust, including in connection with administering the Trust and litigating or otherwise resolving the various Causes of Action and disputed claims. Amounts withheld from distribution may include cost of collecting, administering, distributing, and liquidating the Trust assets such as fees and expenses of the Liquidation Trustee, reserves for contingent liabilities, including potential construction defect claims of the Wind-Down Entity and/or its subsidiaries, premiums for directors’ and officers’ insurance, and fees and expenses of attorneys and consultants. Distributions will be made only from assets of the Trust and only to the extent that the Trust has sufficient assets (in excess of amounts retained for contingent liabilities, including potential construction defect claims and future costs and expenses, among other things) to make such payments in accordance with the Plan and the Trust Agreement. No distribution is required to be made to any Interestholder unless such Interestholder is to receive in such distribution at least $10.00.

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Part I

Item 1.

Business (Continued)

~~Item 1. Business (Continued)~~

The following tables summarize the distributions declared, distributions paid and the activity in the restricted cash account for the periods from February 15, 2019 (inception) through June 30, ~~2022~~2023 and from February 15, 2019 through September ~~23, 2022:~~27, 2023:

				During the Period from February 15, 2019 (inception) through June 30, 2023 ($ in Millions)							During the Period from February 15, 2019 (inception) through September 27, 2023 ($ 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 Reversed
Disallowed (b)									(6.27	)						(6.31	)
Returned (c)									0.74							0.74
Forfeited (d)									(1.13	)						(1.13	)
Subtotal									(6.66	)						(6.70	)

Distributions Paid from Reserve Account (e)									(3.66	)						(3.66	)

Distributions Payable, Net:				as of 6/30/2023:				$	1.28		as of 9/27/2023:				$	1.24

During the Period from
February 15, 2019 (inception) through
June 30, 2022 ($ in Millions) During the Period from
February 15, 2019 (inception) through
September 23, 2022 ($ 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 53.43 51.19 2.24 53.43 51.19 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 29.95 29.20 0.75 29.95 29.20 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 30.02 29.33 0.69 30.02 29.33 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 (b) 6/15/2022 5.63 65.04 - - 65.02 64.19 0.83
Total/Subtotal $ 34.86 $ 408.12 $ 332.43
10.65 $ 408.10 $ 396.62
11.48

Distributions Returend / (Reversed)
Disallowed (c) (3.64 ) (6.27 )
Returned (d) 0.74 0.74
Forfeited (e) (1.16 ) (1.15 )
Subtotal (4.06 ) (6.68 )

Distributions Paid from Reserve Account (f)
(2.86 ) (3.57 )

Distributions Payable: as of 6/30/2022: as of 9/23/2022:
Subtotal
3.73
1.23

Tenth distribution
65.04 (b) -
Total distributions payable $ 68.77 $ 1.23

~~(a) The seventh distribution included the cash the Trust received from Fair Funds.~~

~~(b) On July 15, 2022, $64.19 million was paid.~~

~~(c) As a result of claims being disallowed or Class A Interests cancelled.~~

~~(d) Distribution checks returned or not cashed.~~

~~(e) Distributions forfeited as Interestholders did not cash checks that were over 180 days old.~~

~~(f) Paid as claims are allowed or resolved.~~

(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.

As claims are resolved, additional Class A Interests may be issued or cancelled (see “Part 1, Item 1. Business, D. Plan Provisions Regarding the Company, 2. Treatment under the Plan of holders of claims against and equity interests in the Debtors and 3. Assets and liabilities of the Company”). Therefore, the total amount of a distribution declared may change. In addition, distributions may change ~~between the date declared~~if Interestholders that were previously deemed to have forfeited their rights to receive Class A Interest distributions subsequently respond and ~~the date paid.~~if overpaid distributions are returned.

E. ~~Operations and Management of the Company~~

E.	Operations and Management of the Company

The Trust

Michael I. Goldberg, Esq. is the Liquidation Trustee. The Liquidation Trustee was unanimously selected by the Unsecured Creditors’ Committee, the Noteholder Committee, and the Unitholder Committee and approved by the Bankruptcy Court.

~~Table of Contents~~

~~Part I~~

~~Item 1. Business (Continued)~~

The Trust is also required to have a trustee that has its principal place of business in the State of Delaware (the “Delaware Trustee”). The Delaware Trustee is Wilmington Trust Company, National Association, who has been appointed for the purpose of fulfilling the requirements of the Delaware Statutory Trust Act.

The Trust does not have directors, executive officers or employees. Subject to supervision by the Supervisory Board, the Liquidation Trustee has the full power, right, authority and discretion, unless otherwise provided in the Plan, to carry out and implement all applicable provisions of the Plan.

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Part I

Item 1.

Business (Continued)

In addition to other actions that the Liquidation Trustee has the authority to take, the Liquidation Trustee may do any and all of the following:

review, reconcile, compromise, settle, or object to claims and resolve such objections as set forth in the Plan, free of any restrictions of the Bankruptcy Code or applicable bankruptcy rules;

calculate and make distributions and calculate and establish reserves under and in accordance with the Plan;

retain, compensate, and employ professionals and other persons to represent the Liquidation Trustee with respect to and in connection with its rights and responsibilities;

establish, maintain, and administer documents and accounts of the Debtors as appropriate, which are to be segregated to the extent appropriate in accordance with the Plan;

maintain, conserve, collect, settle, and protect the Trust’s assets (subject to the limitations described in the Plan);

sell, liquidate, transfer, assign, distribute, abandon, or otherwise dispose of the assets of the Trust or any part of such assets or interest in such assets upon such terms as the Liquidation Trustee determines to be necessary, appropriate, or desirable;

negotiate, incur, and pay the expenses of the Trust;

prepare and file any and all informational returns, reports, statements, tax returns, and other documents or disclosures relating to the Debtors that are required under the Plan, by any governmental unit, or by applicable law;

compile and maintain the official claims register, including for purposes of making initial and subsequent distributions under the Plan;

take such actions as are necessary or appropriate to wind-down and dissolve the Debtors;

comply with the Plan, exercise the Liquidation Trustee’s rights, and perform the Liquidation Trustee’s obligations; and

exercise such other powers as deemed by the Liquidation Trustee to be necessary and proper to implement the Plan.

The powers and authority of the Liquidation Trustee are subject to limitations under the Trust Agreement. On behalf of the Trust or the Interestholders, the Liquidation Trustee is prohibited from doing any of the following:

entering into or engaging in any trade or business (other than the management and disposition of the assets of the Trust), and no part of the Trust’s assets or the proceeds, revenue or income therefrom may be used or disposed of by the Trust in furtherance of any trade or business;

except as expressly permitted in the Trust Agreement, reinvesting any assets of the Trust;

selling, transferring, or otherwise disposing of the Trust’s membership interests in the Wind-Down Entity without further approval of the Bankruptcy Court; or

incurring any indebtedness except as contemplated by the Plan or the Trust Agreement.

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Part I

~~Item 1.~~

Item 1.

Business (Continued)

The Liquidation Trustee is permitted to invest cash of the Trust, including any earnings thereon or proceeds therefrom, any cash realized from the liquidation of the assets of the Trust, or any cash that is remitted to the Trust from the Wind-Down Entity or any other person. Investments by the Liquidation Trustee are not required to comply with Bankruptcy Code section 345(b). Accordingly, the Liquidation Trustee will not be required to obtain a secured bond from financial institutions at which Trust funds are deposited or invested. However, investments must be investments that are permitted to be made by a “liquidating trust” within the meaning of Treasury Regulation section 301.7701-4(d), as reflected in such regulation, or under applicable guidelines, rulings, or other controlling authorities. Accordingly, cash not available for distribution and cash pending distribution is expected to be held in demand and time deposits, such as short-term certificates of deposit, in banks or other savings institutions, or other temporary, liquid investments such as Treasury bills.

The Liquidation Trustee is subject to removal and replacement following notice to the SEC and upon a determination by the Bankruptcy Court that “cause” exists for such removal and replacement, using the standard set forth under Bankruptcy Code Section 1104.

Pursuant to the Plan and the Trust Agreement, the activities of the Liquidation Trustee are subject to the supervision of the Supervisory Board, a six-member supervisory board currently consisting of Lynn Myrick, John J. O’Neill, and Terry Goebel (all three of whom were nominated by the Unsecured Creditors’ Committee), Jay Beynon (nominated by the Noteholder Committee), Dr. Raymond C. Blackburn (nominated by the Unitholder Committee), and M. Freddie Reiss (elected to such position by the other members of the Supervisory Board). Mr. Reiss is the sole member of the Audit Committee of the Supervisory Board.

Under the Plan, the Supervisory Board has the rights and powers of a duly elected board of directors of a Delaware corporation. The Supervisory Board is charged with supervision of the Liquidation Trustee in accordance with the Plan and the Trust Agreement, determination of the Liquidation Trustee’s incentive compensation, if any, and approval of the appointment of any successor Liquidation Trustee. In the event that votes or consents by the Supervisory Board for and against any matter (other than any matter regarding the supervision, evaluation or compensation of the Liquidation Trustee) are equally divided, the Liquidation Trustee has the power to cast the deciding vote.

Additionally, approval by the Supervisory Board or, in the absence of such approval, an order of the Bankruptcy Court, is necessary concerning any of the following matters:

any sale or other disposition of an asset of the Trust, or any release, modification or waiver of existing rights as to an asset of the Trust, if the asset at issue exceeds $500,000 in estimated value;

any compromise or settlement of litigation or controverted matter proposed by the Liquidation Trustee involving claims in excess of $500,000; and

any retention by the Liquidation Trustee of professionals.

The approval of sale of real estate assets owned by the Wind-Down Group is the subject of an agreed-upon protocol between the Trust and the Wind-Down Entity.

Members of the Supervisory Board may resign following written notice to the Liquidation Trustee and the other members of the Supervisory Board. Such resignation will become effective on the later to occur of (i) the day specified in such written notice and (ii) the date that is thirty (30) days after the date such notice is delivered. A member of the Supervisory Board may be removed only by entry of a Bankruptcy Court order finding that cause exists to remove such member.

In the event that a member of the Supervisory Board is removed, dies, becomes incapacitated, resigns or otherwise becomes unavailable for any reason, such member’s replacement shall be appointed in accordance with the Plan, which establishes procedures for the appointment of such replacements. If a member of the Supervisory Board nominated by the Unsecured Creditors’ Committee is no longer available for any reason, then the remaining member(s) selected by the Unsecured Creditors’ Committee are to select the replacement member(s). If a member of the Supervisory Board nominated by either the Noteholder Committee or the Unitholder Committee is no longer available for any reason, then the available former members of the Noteholder Committee or Unitholder Committee, as applicable, are to be requested to, and may, select a replacement. If no former members of the Noteholder Committee or the Unitholder Committee, as applicable, are reasonably available and willing to make the selection, then the remaining members of the Supervisory Board are to select the replacement member(s).

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Item 1.

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Holders of Liquidation Trust Interests have no voting rights with respect to the selection or replacement of the Liquidation Trustee or the Delaware Trustee and have no other voting rights.

The Audit Committee of the Trust was appointed by the Supervisory Board to oversee (i) the integrity of the annual, quarterly and other financial statements of the Trust, (ii) the independent auditor’s qualification and independence, (iii) the performance of the Trust’s independent auditor, and (iv) the compliance by the Trust with legal and regulatory requirements. The Audit Committee also is authorized, subject to final review by all disinterested members of the Supervisory Board in each case, to review and approve all related-person transactions in which the Trust is a participant as provided for in the Trust’s Related Person Transaction Policy. The Audit Committee is comprised of M. Freddie Reiss, who also serves as Chairman of the committee.

2.	The Wind-Down Group

~~Under~~

Formerly under the Plan and the Wind-Down Entity LLC Agreement, the Wind-Down Entity iswas required to be managed by a three-member Board of Managers, one of whom iswas required to be the ~~chief executive officer. The~~Chief Executive Officer. Accordingly, the Board of Managers ~~is required to consist of the Chief Executive Officer of the Wind-Down Entity and two other persons. Pursuant to the Plan, the initial Board of Managers is comprised~~initially consisted of Frederick Chin ~~(the~~(then the Chief Executive Officer of the Wind-Down Entity), Richard Nevins and M. Freddie Reiss ~~(former~~(the latter two being former members of the Debtors’ New Board). On November 30, 2022, the Wind-Down Entity LLC Agreement was amended to reduce the Wind-Down Entities’ Board of Managers to two members and to eliminate the requirement that the Chief Executive Officer serve as a member of the Board of Managers, effective upon Mr. Chin’s resignation on December 31, 2022, and Marion W. Fong was appointed to serve as Chief Executive Officer of the Wind-Down Entity effective as of January 1, 2023. Ms. Fong is not a member of the Board of Managers. On March 27, 2023, the Wind-Down Entity LLC Agreement was further amended and the Board of Managers was reduced to one person, M. Freddie Reiss, following the sale of the last single-family home and the resignation of Richard Nevins on April 29, 2023.

The Board of Managers is charged with the administration of the Wind-Down Entity, including the power to carry out any and all acts necessary, convenient or incidental to or for the furtherance of the purposes of the Wind-Down Entity. Except as otherwise provided in the Plan and the Wind-Down LLC Agreement, no individual member of the Board, in his or her capacity as such, has any authority to bind the Wind-Down Entity.

Members of the Board of Managers serve until they resign, die, become incapacitated or are removed for Cause by the Trust. “Cause” is defined in the Wind-Down Entity LLC Agreement, with respect to any Manager, as (i) the embezzlement, misappropriation of any property or other asset of the Wind-Down Entity; (ii) the commission of, or the entering of a plea of nolo contendere or guilty with respect to, any felony whatsoever or any misdemeanor involving moral turpitude; or (iii) any willful and material breach of the terms of the Wind-Down Entity LLC Agreement or the terms of the Plan applicable to such Manager. Any member of the Board of Managers may resign by giving not less than thirty (30) calendar days’ prior notice of resignation to the other members. Vacancies on the Board of Managers are required to be filled by the Trust.

Subject to the Plan and the Wind-Down Entity LLC Agreement, the Board of Managers also is charged with the supervision and oversight of the Chief Executive Officer. The Chief Executive Officer of the Wind-Down Entity iswas Frederick ~~Chin.~~Chin until his resignation on December 31, 2022. Effective January 1, 2023, Marion W. Fong became the Wind-Down Entity’s Chief Executive Officer, while retaining her existing role as Chief Financial Officer. In addition to the Chief Executive Officer, the Wind-Down Entity had 83 employees as of September ~~23, 2022.~~

27, 2023.

Subject to the supervision of the Board of Managers as described above, the Chief Executive Officer has the authority, except as otherwise provided in the Plan, to carry out and implement all applicable provisions of the Plan for the ultimate benefit of the Trust, including the authority to do the following:

retain, compensate, and employ professionals and other persons to represent the Wind-Down Entity in connection with its rights and responsibilities;

establish, maintain, and administer accounts of the Debtors as appropriate;

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maintain, develop, improve, administer, operate, conserve, supervise, collect, settle, and protect the assets of the Wind-Down Entity;

sell, liquidate, transfer, assign, distribute, abandon, or otherwise dispose of the assets of the Wind-Down Entity, including through the formation on or after the Plan Effective Date of any new or additional legal entities to be owned by the Wind-Down Entity to own and hold particular assets of the Wind-Down Entity separate and apart from any other assets of the Wind-Down Entity, upon such terms as the Chief Executive Officer determines to be necessary, appropriate, or desirable;

invest cash of the Debtors and their estates, including any cash realized from the liquidation of the assets of the Wind-Down Entity;

negotiate, incur, and pay the expenses of the Wind-Down Entity;

~~Table of Contents~~

~~Part I~~

~~Item 1. Business (Continued)~~

exercise and enforce all rights and remedies regarding any loans or related interests as to which the lender was a Debtor and the underlying borrower actually is or actually was a person or organization that is not a Debtor, including any such rights or remedies that any Debtor or any estate was entitled to exercise or enforce prior to the Plan Effective Date on behalf of a holder of a Non-Debtor Loan Note Claim, and including rights of collection, foreclosure, and all other rights and remedies arising under any promissory note, mortgage, deed of trust, or other document with such underlying borrower or under applicable law;

comply with the Plan, exercise the Chief Executive Officer’s rights, and perform the Chief Executive Officer’s obligations; and

exercise such other powers as deemed by the Chief Executive Officer to be necessary and proper to implement the provisions of the Plan.

Each of the Wind-Down Subsidiaries is managed by ~~its member,~~ the Wind-Down ~~Entity. Frederick Chin~~Entity, its sole member. The Wind-Down Entity’s Chief Executive Officer serves as Chief Executive Officer of each of the Wind-Down Subsidiaries.

Distributions of cash or other assets of the Wind-Down Group are to be made as and when determined by the Board of Managers in its sole discretion, provided however that on the first business day that is 30 calendar days after each calendar quarter-end, the Wind-Down Entity is to remit to the Trust as of such quarter-end any cash in excess of its budgeted amount for ongoing operations, reserves for contingent liabilities, including potential construction defect claims,other anticipated expenses and other Plan obligations.

3.	Current year plan of operations

During the remainder of the fiscal year ending June 30, ~~2023,~~2024, the Trust plans to continue to engage in the resolution of claims filed against the Debtors, the evaluation and prosecution of the Unresolved Causes of Action, the disposition of Forfeited Assets, and the payment of ~~allowed administrative and priority tax claims~~Priority Tax Claims against the Debtors. Subject to the receipt of remittances from the Wind-Down Entity, ~~proceeds from the disposition of Forfeited Assets,~~ the payment of Trust expenses, ~~priority claims~~Priority Tax Claims and the retention of various reserves, the Trust may also ~~plans to~~ make distributions of cash to Interestholders in accordance with the Plan. However, during the fiscal year ended June 30, 2023, a construction defect claim was asserted against one of the Wind-Down Susidiaries by the buyer of one of the subsidiary’s single-family homes. The subsidiary has tendered the claim to its insurance carrier. At this time, the amount of the liability exposure, if any, has not been determined and it is not known whether the subsidiary has any exposure in excess of its insurance coverage. The subsidiary is investigating the claim, including the extent and causes of the alleged damage and the identification of other potentially responsible persons. On August 3, 2023, at the recommendation of the Liquidation Trustee, the Trust suspended the making of additional Trust distributions pending the results of the investigation of the claim.

~~As of September 23, 2022, the Wind-Down Group owned one single-family home and four other real estate assets. These four other real estate assets include two secured loans and two other properties.~~ During the remainder of the fiscal year ending June 30, ~~2023,~~2024, the Wind-Down Group ~~plans to~~will continue to ~~engage in~~manage the ~~marketing and~~liquidation of the remaining assets, including completing the pending sale of ~~these~~its one parcel of real ~~estate assets. In connection with~~property, managing the performing secured loan through its ~~development~~December 15, 2024 maturity date, processing remaining bond and property tax refunds, coordinating all necessary work for the release of an escrow holdback and other activities the Wind-Down Group contracts with third-party development management companies, general contractors, architects, and design and furnishing companies to carry out and complete construction and punch list items, prepare for sale and maintain its real estate assets. The Wind-Down Group plans to undertake marketing initiatives to enhance the exposure of its real estate portfolio and to retain third-party real estate brokers to list and sell real estate assets currently held for sale.as needed. In addition, the Wind-Down Group ~~may complete~~will continue to work to satisfy ~~warranty~~construction defect claims (where such activities are considered necessary or appropriate). The Wind-Down Group expects to fund its capital requirement for its operating costs primarily with cash and cash equivalents on ~~hand and proceeds from sales of real estate assets.~~hand.

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4.	Termination and dissolution of the Company

The Trust is required to be terminated, and the Liquidation Trustee discharged from duties, at such time as: ~~(a)~~(i) the Liquidation Trustee determines that the pursuit of additional Causes of Action held by the Trust is not likely to yield sufficient additional proceeds to justify further pursuit of such Causes of Action and ~~(b)~~(ii) all distributions required to be made by the Liquidation Trustee to the holders of allowed claims and to the Interestholders under the Plan and the Trust Agreement have been made. Notwithstanding the above, the Trust must be terminated no later than February 15, 2024 unless the Bankruptcy Court, upon motion made within the six-month period before such date, determines that a fixed period extension is necessary to facilitate or complete the recovery on, and liquidation of, the Trust’s assets, except that the Bankruptcy Court may not grant an extension that, together with any prior extensions, exceeds three years unless the Trust has obtained a favorable letter ruling from the Internal Revenue Service to the effect that the further extension would not adversely affect the status of the Trust as a liquidating trust for federal income tax purposes. ~~The status~~

During the year ended June 30, 2023, the Company concluded that its liquidation activities would not be completed by February 15, 2024, the current outside termination date of ~~ongoing litigation, pending appeals, and other events and factors may cause~~ the Trust, for a number of reasons. First, there have been significant delays in certain legal proceedings where the Company is the plaintiff as more fully described in "Item 3. Legal Proceedings". Second, a construction defect claim has been asserted against one of the Wind-Down Subsidiaries by the buyer of one of the subsidiary’s single-family homes. The subsidiary has tendered the claim to ~~request~~its insurance carrier. At this time, the amount of the liability exposure, if any, has not been determined and it is not known if the subsidiary has any exposure in excess of its insurance coverage. The subsidiary is investigating the claim, including the extent and causes of the alleged damage and the identification of other potentially responsible persons. Based on the foregoing, the Company currently projects a revised estimated completion date for the Company’s operations of approximately March 31, 2026.

The Company is required to file a motion with the Bankruptcy Court to extend the ~~Trust’s~~ termination date ~~past~~of the Trust beyond February 15, 2024. The motion is required to be filed within six months before February 15, 2024. The Company expects that the motion will be filed as required and that the Bankruptcy Court will grant the motion as the extension is needed to pursue additional Trust actions that are expected to yield additional proceeds to the Trust and to address the construction defect claim.

The Trust may not be terminated at any time by the Interestholders. Upon any termination of the Trust, any remaining assets of the Trust that exceed the amounts required to be paid under the Plan may be transferred by the Liquidation Trustee to the American Bankruptcy Institute Endowment Fund.

Pursuant to ~~the Wind-Down Entity’s~~its Limited Liability Company Agreement, the Wind-Down Entity shall dissolve upon the first to occur of the following: (i) the written consent of the Trust, (ii) the entry of a decree of judicial dissolution under Section 18-802 of the Delaware LLC Act and (iii) the sale or other disposition of all of the Wind-Down Assets.

F. ~~Access to Information~~

F.	Access to Information

The Trust’s website is located at www.woodbridgeliquidationtrust.com. The information on the Trust’s website is not part of this Annual Report. Through its website, the Trust makes available, free of charge, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished to the SEC. These reports are available as soon as reasonably practicable after the Trust electronically files these reports with the SEC. The Trust also posts on its website its Code of Conduct and Conflict of Interest Policy, Code of Ethics, Insider Trading Policy and other corporate governance materials required by SEC regulation. These documents are also available in print to any Interestholder requesting a copy from the Liquidation Trustee.

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~~Item 1A.~~

Item 1A.

Risk Factors

An investment in the Liquidation Trust Interests involves various risks. An investor should carefully consider the risks and uncertainties described below and the other information included or incorporated by reference in this Annual Report before deciding to invest in the Liquidation Trust Interests. Any of the risk factors set forth below could significantly and adversely affect the Company’s business, prospects, financial condition and results of operations. As a result, the trading price of the Liquidation Trust Interests could decline, and an investor could lose a part or all of his or her investment.

Risks Relating to Uncertainties Relating to Causes of Action

Future distributions by the Trust will ~~increasingly~~primarily depend on the successful outcome of the Unresolved Causes of Action. The Company has disposed of substantially all of its real estate assets and does not expect to receive additional Fair ~~Funds or Forfeited Assets. As the Company’s remaining limited real estate asset portfolio is sold, the~~Funds. The source of funds for future distributions by the Trust will depend ~~increasingly~~primarily on its successful prosecution of the Unresolved Causes of Action.

The amount and timing of receipts, if any, from Causes of Action is inherently speculative and risky and cannot be predicted with certainty. The Trust does not expect to receive the proceeds of the Unresolved Causes of Action unless and until it successfully obtains judgments or concludes settlements with respect to such Unresolved Causes of Action and is successful in recovering on such judgments or settlements. The Trust may not be successful in litigating the Unresolved Causes of Action or, if it is successful, there could be a significant delay before any recovery is obtained and distributed (if ever). The outcome of litigation is inherently speculative and uncertain, and there can be no assurance that the Trust will obtain a favorable judgment or settlement with respect to any particular Unresolved Cause of Action. Due to the speculative and risky nature of litigation and settlement efforts, the Company is unable to make any meaningful determination of the potential outcome or value, in the aggregate, of the Unresolved Causes of Action. In addition, even if there is a favorable judgment or settlement, there can be no assurance that the Trust will be able to recover some or all of such judgment or settlement.

Delays in the prosecution of the Unresolved Causes of Action, ~~may~~and the need to investigate and resolve a construction defect claim, are expected to extend the Company’s anticipated liquidation period.Appeals and other events that affect the duration of litigation ~~may generate~~have generated delays in the timing of net recoveries from the Trust’s prosecution of its Unresolved Causes of Action and completion of the Company’s liquidation. Additionally, a construction defect claim has been asserted against a subsidiary of the Trust by the buyer of one of the subsidiary’s single-family homes, and the Company’s investigation of the claim, including the extent and causes of the alleged damage and the identification of other potentially responsible persons, will require additional time. Accordingly, during the year ended June 30, 2023 the Company concluded that its liquidation activities would not be completed by February 15, 2024, the current outside termination date of the Trust. The Company ~~expects~~currently projects a revised estimated completion date for the Company’s operations of approximately March 31, 2026. The Company is required to complete the liquidation of its real estate assets during the fiscal year ending June 30, 2024. However, the status of ongoing litigation, pending appeals and other events and factors may cause the Trust to requestfile a motion with the Bankruptcy Court to extend the ~~Trust’s~~ termination date ~~past~~of the Trust beyond February 15, 2024. ~~Extension~~The motion is required to be filed within six months before February 15, 2024. The Company expects that the motion will be filed as required and that the Bankruptcy Court will grant the motion as the extension is needed to pursue additional Trust actions that are expected to yield additional proceeds to the Trust and to address the construction defect claim. Further delays in the Trust’s litigation, the receipt of ~~its~~any additional construction defect claims, or other events and factors may require the Company to seek further extensions of the term of the Trust. Extensions of the Trust’s anticipated liquidation period ~~may~~will increase the overall operating and administrative costs of the Company and reduce the amounts available for distribution in respect of the Liquidation Trust Interests.

Even if there is a recovery based on the Unresolved Causes of Action, there can be no assurances that there will be sufficient funds to make any distributions to Interestholders. Even if the Trust obtains a judgment or settlement based on the Unresolved Causes of Action and successfully recovers funds on account of such judgment or settlement, there can be no assurance that the Interestholders will receive any proceeds from such judgment or settlement. Before Interestholders receive distributions, the Liquidation Trustee must pay Trust expenses and may set aside funds for future expenses, ~~or contingencies.~~contingent liabilities, including potential construction defect claims.

Limited information regarding developments in the Trust’s prosecution of the Unresolved Causes of Action and potential outcomes will be available; therefore, it may be difficult for Interestholders to assess the amount of recovery. The Trust is required to file current and periodic reports with the SEC, as required under the Exchange Act. The SEC reports ~~are expected to~~ include certain information regarding pending Unresolved Causes of Action. However, the Trust’s ability to disclose details of the Unresolved Causes of Action ~~may be~~is limited by the inherent nature and rules of judicial proceedings, including, among other things, proceedings and filings that are sealed by a court, matters involving attorney-client and work product privilege and proceedings that are conducted on a confidential basis by agreement of the parties, such as settlement negotiations. To the extent that information regarding the Unresolved Causes of Action cannot be provided, it will be difficult for investors in the Liquidation Trust Interests to make any meaningful determination of the potential outcome or value of the Unresolved Causes of Action.

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Part I

Item 1A.

Risk Factors (Continued)

Risks Relating to Real Estate Assets

~~The Wind-Down Group’s real estate asset portfolio is limited and will further decrease.~~ The Wind-Down Group’s real estate asset portfolio consisted of five real estate assets as of June 30, 2022, which assets had a carrying value of $29.06 million as of June 30, 2022. The Company expects to continue to market and sell its current real estate portfolio and does not expect to add any new real estate assets to its portfolio. Completion of the liquidation of the existing real estate portfolio is anticipated during the fiscal year ending June 30, 2024. Accordingly, investors are advised that the Wind-Down Group’s real estate portfolio cannot provide a source of indefinite future distributions to the Trust.

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~~Part I~~

~~Item 1A. Risk Factors (Continued)~~

~~The Wind-Down Group’s real estate asset portfolio is highly concentrated in a small number of properties~~. The Wind-Down Group’s real estate asset portfolio consisted of five real estate assets as of June 30, 2022. The vast majority of the estimated value of the Wind-Down Group’s real estate portfolio as of June 30, 2022 is derived from a single, very exclusive, luxury single-family residential property located in the Bel-Air neighborhood of Los Angeles. This concentration and lack of diversification in its real estate portfolio means that the Wind-Down Group is particularly subject to the risks and fluctuations in the price of high-end residential property in its market, and any downturn in its market would result in a significant and outsized negative impact on the Wind-Down Group.

~~The Wind-Down Group may not be able to sell its real estate (or “real estate assets”) for its carrying value.~~ The Wind-Down Group has estimated the sales price of its real estate assets. There are many factors which are outside of the Wind-Down Group’s control which may impact the actual sales price of its real estate assets. The actual sales price will be determined through negotiations between the Wind-Down Group and prospective buyers. The actual sales price of the real estate assets may differ materially from the estimates.

The Wind-Down Group may remain subject to potential liabilities for construction defects for an extended period of time following the sale of its properties. In connection with its sales of developed real properties and pursuant to applicable law, the Wind-Down Group may face potential claims for construction defects ~~and property damage~~ for up to 10 years following the completion of construction. There can be no assurance that contractor’s guaranties and warranties will be adequate to indemnify the Wind-Down Group against all such claims. In the ordinary course of business, the Wind-Down Group seeks to obtain liability insurance ~~in appropriate amounts~~(as available) in order to address its potential liability for construction defects and property damage. However, the Company’s ability to continue to do so is subject to factors beyond its control, including the availability and cost of appropriate insurance products. Furthermore, subject to applicable law and policy limitations, coverage may or may not be available for property damage or certain other liabilities resulting from construction defects. If contractor’s guaranties and insurance policies were to prove insufficient, the Wind-Down Group may become exposed to further costs, including potentially expensive litigation and significant adverse judgments. Any significant liabilities resulting from such post-sale obligations may adversely affect the Wind-Down Group’s financial position, net assets in liquidation and cash flow which would, in turn adversely affect the Trust’s ability to make distributions to its Interestholders. Furthermore, the amount of cash available for distribution to the Trust upon completion of the Wind-Down Group’s activities may be affected by reserves that the Wind-Down Group may be required to set aside in order to make reasonable provision for future or unknown construction defect claims. There is also no guarantee that the estimated reserves will be sufficient to cover unknown future liabilities.

~~There is limited liquidity in real estate investments, which could limit the Wind-Down Group’s flexibility~~. Real estate is a relatively illiquid asset. The Wind-Down Group may not be able to sell its real estate assets at the optimal time to maximize its recovery. The Wind-Down Group is unable to acquire new real estate assets to diversify its portfolio and may lack the flexibility to adapt in response to changes in economic and other conditions.

~~High-end single-family homes are subject to the costs and risks of marketing such properties~~. High-end residential properties commonly require longer average marketing time than conventional residential properties. During an extended marketing period, significant holding costs may be incurred to stage, maintain and own the completed homes. The Wind-Down Group may be required to refresh properties after completion of construction to accommodate prospective purchasers’ requests, which may result in additional costs to complete a sale.

~~The Wind-Down Group is dependent on the timely and consistent performance of services by third party service providers~~. To complete potential warranty claims and punch list items and pay holding costs of its single-family homes, the Wind-Down Group relies on general contractors, subcontractors, development managers, architects, maintenance personnel and other service providers who are not under the control of the Wind-Down Group. Inadequate or failed performance of services by such third-party providers may subject the Wind-Down Group to delays in completing its properties and increased costs.

~~The Los Angeles market, in which the remaining single-family home owned by the Wind-Down Group is located, may experience a significant slackening of demand.~~ Slowing of demand in the Los Angeles market may further lengthen the number of days the property remains on the market and negatively affect sales prices. In addition, periods of economic slowdown or recession in the United States and in other countries, rising interest rates, inflation or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in property values, which would adversely affect the financial position, net assets in liquidation and cash flow of the Wind-Down Group. This would, in turn, adversely affect the Company’s ability to make distributions to its Interestholders.

~~Table of Contents~~

~~Part I~~

~~Item 1A. Risk Factors (Continued)~~

The Wind-Down Group’s working capital may not be sufficient to cover ~~warranty~~construction defect claims ~~punch list items~~ and ~~holding costs of its single-family homes,~~ complete liquidation activities and may be restricted in its ability to access capital. As of August 31, ~~2022,~~2023, and June 30, ~~2022,~~2023, the Wind-Down Group had existing unrestricted cash and cash equivalents of approximately ~~$15.72~~$10.60 million and ~~$14.16~~$10.84 million, respectively. ~~Aside from unrestricted cash and cash equivalents, the~~The Wind-Down Group does not have access to any line of credit.

~~Risks related~~The Wind-Down Group’s real estate asset portfolio is limited. The Wind-Down Group’s real estate asset portfolio consisted of two real estate assets as of June 30, 2023,with a net carrying value of $0.77 million as of June 30, 2023. The Company does not expect to ~~building code and zoning compliance may adversely affect~~add any new real estate assets to its portfolio. Completion of the ~~financial condition and changes in net assets in~~ liquidation of the ~~Wind-Down Group.~~ ~~The Wind-Down Group intends to complete potential warranty repairs and punch list items of~~existing real estate portfolio, other than its high-value single-family homes and, in connection therewith, must comply with zoning and building code requirements and pass frequent building inspections and obtain other approvals. Delays or difficulties in connection with any ofone performing secured loan, is anticipated during the ~~foregoing may result in additional costs and delays, which depending on market conditions may adversely affect the financial position, net assets in liquidation and cash flow of~~fiscal year ending June 30, 2024. Accordingly, investors are advised that the Wind-Down ~~Group. This would, in turn, adversely affect the Trust’s ability to make~~Group’s real estate portfolio represents a very limited source of future distributions to ~~its Interestholders.~~the Trust.

Risks related to competition from other developers of residential real properties in the Los Angeles market, in which the remaining single-family home owned by the Wind-Down Group is located, may adversely affect the financial condition and changes in net assets in liquidation of the Wind-Down Group. The addition of new homes by the Wind-Down Group’s competitors may increase the available supply of similar properties, creating downward pressure on home prices and protracted sales periods. In addition, one or more of the Wind-Down Group’s competitors may have superior financial resources that would allow them to continue in business for a longer term than the Wind-Down Group.

Risks related to increased inventory of residential real properties available for sale in the Los Angeles market, in which the remaining single-family home owned by the Wind-Down Group is located, may adversely affect the financial condition and changes in net assets in liquidation of the Wind-Down Group. ~~An increase in available supply of similar properties that are available for purchase may create downward pressure on home prices and protract the marketing and sales periods.~~

~~Adverse weather conditions and natural disasters could adversely affect the Wind-Down Group’s operations and results. Additionally, the~~ Wind-Down Group may not be able to ~~obtain insurance at reasonable rates~~sell its real estate (or “real estate assets”) for ~~natural disasters and other events~~its carrying value. The Wind-Down Group has estimated the sales price of its real estate assets. There are many factors which are ~~beyond its control.~~ ~~Adverse weather conditions can delay the completion~~outside of ~~warranty repairs and punch list items relating to the single-family homes it constructed and may impact buyer demand for~~ the Wind-Down Group’s ~~remaining single-family home. In more severe cases, such as wildfires, earthquakes and other natural disasters, weather conditions~~control which may ~~damage~~impact the ~~Wind-Down Group’s remaining single-family home, perhaps for prolonged periods, which would negatively affect the value~~actual sales price of ~~the property and the ability to sell it. Southern California, where the remaining single-family home is located, is a seismically active area. Additionally, wildfires are prevalent in this region.~~

~~Additionally, although~~its real estate assets. The actual sales price will be determined through negotiations between the Wind-Down Group ~~insures its remaining single-family home against earthquakes (for some properties subject to coverage limitations of insurance), wildfires,~~ and other disasters, it may not be able to obtain insurance for these types of events for all of its properties at reasonable rates. In particular, because the Wind-Down Group’s single-family home in Los Angeles is located in an area subject to seismic activity and/or wildfires, the Wind-Down Group may not be able to obtain insurance or sufficient insurance coverage against those types of disasters. A devastating natural disaster or other event in the vicinityprospective buyers. The actual sales price of the ~~property could result in substantial losses. This would, in turn, adversely affect~~real estate assets may differ materially from the ~~Trust’s ability to make distributions to its Interestholders.~~estimates.

The Wind-Down Group may suffer environmental liabilities which could result in substantial costs. Under various environmental laws, the current or previous owner or operator of real property may be liable for the costs of removal or remediation of hazardous or toxic substances, including asbestos-containing materials that are located on or under the property. These laws often impose liability whether the owner or operator knew of, or was responsible for, the presence of those substances. In connection with the Wind-Down Group’s ownership and operation of properties, it may be liable for these costs, which could be substantial. In addition, the Wind-Down Group may become subject to claims by third parties based on damages and costs resulting from environmental contamination at or emanating from the properties.

~~The Wind-Down Group’s success depends on the continuing contributions of its key personnel~~. The Wind-Down Group has a skilled management team to oversee the completion of warranty claims and punch list items relating to its single-family homes, and the marketing and sale of the remaining real estate properties. However, it does not have agreements with any key personnel that hinders such individuals’ ability to quit at will and, thus, any executive officer or key employee may terminate his or her relationship with the Wind-Down Group at any time upon relatively short notice.

2022

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Part I

~~Item 1A.~~

Item 1A.

Risk Factors (Continued)

~~Risks Relating to Pandemics or other Health Crises, such as the Outbreak of the Novel Coronavirus (COVID-19)~~

The success of the Company’s marketing efforts, the timing of the sales of the Company’s properties and the value realized in such sales could be adversely affected by any reduction in demand for real estate properties as a result of the COVID-19 pandemic or other health crises.The Company’s ability to sell its properties at the values reflected in its consolidated financial statements depends, in part on demand for such properties and on the global, national, regional and local economic environments. The risk, or public perception of the risk, of a pandemic or media coverage of infectious diseases may cause persons seeking to purchase real estate properties to suspend or defer their efforts. Reduction in demand for the Company’s properties, which are located in areas affected by the recent COVID-19 outbreak such as Los Angeles and New York, may cause delays in the sale of such properties or adversely affect the price at which they can be sold. Furthermore, the success of the Company’s marketing efforts depends, in part, on the ability of the Company’s brokers to meet with and show Company properties to prospective purchasers and their agents. These and other marketing activities may become subject to restrictions on gatherings imposed by state and local governments in response to the recent coronavirus outbreak.

Risks Relating to the Liquidation Trust Interests

~~The value of the Liquidation Trust Interests has decreased and over time is expected to continue to decrease.~~ The value of the Liquidation Trust Interests will depend primarily on the anticipated net liquidation value of the remaining assets of the Trust, which is expected to decrease with each cash distribution (if any) made to Interestholders.

The Liquidation Trust Interests are not suitable as a long-term investment. The Company intends to complete the liquidation in as short a time as is consistent with the maximization of the value of its ~~assets, without regard to the potential long-term capital appreciation of the real properties owned by the Wind-Down Group.~~assets. The Company ~~expects to complete~~currently projects an estimated completion date for the ~~liquidation~~Company’s operations of its real estate assets during the fiscal year ending June 30, 2024. However, the status of ongoing litigation, pending appeals, and other events and factors may cause the Trust to request the Bankruptcy Court to extend the Trust’s termination date past February 15, 2024.approximately March 31, 2026.

The Liquidation Trust Interests are subject to forfeiture of their right to further distributions if a holder fails to promptly cash a distribution check or fails to promptly claim a distribution check that is returned to the Trust as undeliverable. The Plan provides that if the Trust mails a distribution check to an Interestholder and the Interestholder fails to cash the check within 180 calendar days, or if the Trust mails a distribution check to an Interestholder and such check is returned to the Trust as undeliverable and is not claimed by the Interestholder within 180 days, then the Interestholder not only loses its right to the amount of that distribution, but also is deemed to have forfeited its right to any reserved and future distributions under the Plan. It is the responsibility of the Interestholders to promptly cash all distribution checks received by them and to contact the Trust’s transfer agent to ensure that the Trust has complete and accurate information.

The Trust cannot predict with certainty the timing or amount of distributions to the Interestholders. It is not possible to predict with certainty the timing and amount of future distributions to Interestholders. The Trust will make distributions to the Interestholders only if and to the extent that it receives remittances from the Wind-Down Entity, proceeds from the Causes of Action or Forfeited Assets, and then only to the extent that such remittances or proceeds exceed any amounts withheld by the Liquidation Trustee for, among other things, payment of, and reserves for, Trust expenses and funding of the prosecution of Unresolved Causes of Action. Such cash receipts cannot be predicted with certainty because they are subject to conditions beyond the Trust’s control, or which are inherently uncertain. Remittances by the Wind-Down Entity will depend on the amount and timing of the Wind-Down Group’s sale of its ~~five~~ remaining real estate ~~assets,~~asset, as well as the Wind-Down Group’s operating ~~expenses.~~expenses and potential construction defect claims. Cash proceeds from Causes of Action will depend on the Trust obtaining, and recovering on, favorable judgments or settlements with respect to Causes of Action.On August 3, 2023, at the recommendation of the Liquidation Trustee, the Trust suspended the making of distributions pending the results of the investigation of a construction defect claim.

Table of Contents

Part I

Item 1A.

Risk Factors (Continued)

The Trust cannot predict with certainty the percentage of distributions to which each holder of a Class A Interest will be entitled. Such percentage will depend on the total number of Liquidation Trust Interests that ultimately are granted. Additional Liquidation Trust Interests will be granted to holders of disputed claims as and when the Trust resolves such claims, at which time they become allowed claims under the Plan. To the extent that additional Liquidation Trust Interests are granted to the holders of allowed claims, the percentage of distributions to which each holder of a Class A Interest is entitled will decrease. To the extent that additional claims are not allowed, no additional Liquidation Trust Interests will be granted in respect thereof and the percentage of distributions to which each holder of a Class A Interest is entitled will increase. As of September ~~23, 2022, $887.39~~27, 2023, $887.42 million of Class 3, Class 4 and Class 5 Claims have become allowed claims. The Trust estimates, as of September ~~23, 2022,~~27, 2023, that ~~an additional~~ approximately $0.34 million of additional Class 3, Class 4 and Class 5 Claims will ultimately be allowed. However, the actual ~~number~~amount of allowed claims may be materially different from the estimate.

~~Table of Contents~~

~~Part I~~

~~Item 1A. Risk Factors (Continued)~~

The Class A Interests ~~may be~~are thinly traded. The Class A Interests are not listed on any national securities exchange, but instead are traded on the over-the-counter market (OTC Link^® ATS) under the symbol WBQNL. ~~As a result of relatively low trading volumes for the Class A Interests, the market price for the Class A Interests may be difficult to establish.~~ Accordingly, the Class A Interests may not be suitable for investors preferring highly liquid securities and may present challenges in profit-taking and other trading risks.

The market price for Class A Interests may be volatile. Many factors could cause the market price of Class A Interests to rise and fall, including the following:

Declaration and payment of distributions;

Adverse court rulings or other developments affecting the prosecution of the Unresolved Causes of Action;

Actual or anticipated fluctuations in the Trust’s or the Wind-Down Group’s quarterly or annual financial results;

Various market factors or perceived market factors, including rumors, whether or not correct, involving the Trust, the Wind-Down Group, the properties, potential buyers, or the Wind-Down Group’s competitors;

Sales, or anticipated sales, of large blocks of Liquidation Trust Interests, including short selling by investors;

Additions or departures of key personnel;

Regulatory or political developments;

Litigation and governmental or regulatory investigations;

Changes in real estate market conditions; and

General economic, political, and financial market conditions or events.

To the extent that there is volatility in the price of Class A Interests, the Trust may also become the target of securities litigation. Securities litigation could result in substantial costs and divert the Trustee’s and the Supervisory Board’s attention and the Company’s resources as well as depress the value of Liquidation Trust Interests.

Certain holders of Class A Interests, deemed under the Bankruptcy Code to be “underwriters,” may not be able to sell or transfer their Class A Interests in reliance upon the Bankruptcy Code’s exemption from the registration requirements of federal and state securities laws. Such “statutory underwriters” may include members of the Supervisory Board and holders of ten percent (10%) or more of the Liquidation Trust Interests. Statutory underwriters may not be able to offer or sell their Class A Interests without registration under the Securities Act or applicable state securities (i.e., “blue sky”) laws unless such offer and sale is exempted from the registration requirements of such laws. The offer and sale of Class A Interests by statutory underwriters in reliance upon an exemption from registration under the Securities Act may require compliance with the requirements and conditions of Rule 144 of such law, including those regarding the holding period, the adequacy of current public information regarding the Trust, sale volume restrictions, broker transactions, and the filing of a notice.

Table of Contents

Part I

Item 1A.

Risk Factors (Continued)

Potential conflicts of interest exist among the classes of Liquidation Trust Interests. The existence of separate classes of Liquidation Trust Interests could give rise to occasions when the interests of the Interestholders could diverge, conflict or appear to diverge or conflict. Operational and financial decisions by the Liquidation Trustee regarding litigation could favor one class (i.e., Class A or Class B) of Interestholders over another, adversely affecting the market value of a particular class of Liquidation Trust Interests or the distribution to that particular class of Liquidation Trust Interests.

The Class A Interests may become the subject of third-party tender offers. The Trust believes that one or more institutional investors have, or in the future may acquire, an interest in conducting a tender offer for the Class A Interests. Such tender offers may be commenced without the offeror having negotiated with the Trust to make price or other terms of the offer more attractive, and without the offeror having sought the Trust’s recommendation of the offer to its holders. As a result of thin trading of the Class A Interests on the over-the-counter market, the liquidity of such securities may be limited, and it may be difficult to establish a market price for such securities. Holders of Class A Interests presented with a tender offer may be at a disadvantage in evaluating such offer.

~~Table of Contents~~

~~Part I~~

~~Item 1A. Risk Factors (Continued)~~

Risks Relating to Limited Purpose

The Trust has a limited purpose. The Trust cannot conduct any trade or business for profit. The Trust was formed pursuant to a chapter 11 bankruptcy plan. The Trust’s purpose is to prosecute Causes of Action, to litigate and resolve claims filed against the Debtors, to pay ~~allowed administrative~~Allowed Administrative Claims and ~~priority claims~~Priority Claims against the Debtors (including professional fees), to receive cash from certain sources and, in accordance with the Plan, to make distributions of cash to Interestholders subject to the retention of various reserves, including those related to potential construction defect claims and after the payment of Trust expenses and ~~administrative~~Allowed Administrative Claims and ~~priority claims.~~Priority Claims.

The Trust does not expect to generate or receive cash other than from limited sources. The Trust does not expect to receive significant cash other than from remittances to the Trust by the Wind-Down Entity (reflecting the net proceeds of the Wind-Down Group’s liquidation of its portfolio of real estate assets) and from litigation or settlement by the Trust of its Unresolved Causes of Action. Furthermore, the Wind-Down Entity’s remaining portfolio is limited.

The Trust’s cash may be invested only in investments permissible under applicable Treasury regulations. Cash not available for distribution and cash pending distribution is expected to be held in demand and time deposits, such as short-term deposits in banks or other savings institutions or other temporary, liquid investments such as Treasury bills. Such investments are likely to bear only low rates of ~~interest, if any.~~interest. There can be no assurance that cash will earn interest or dividends at a rate in excess of inflation, or at all. The Liquidation Trustee will not be liable in the event of the insolvency or failure of any institution in which he or she has invested any funds of the Trust.

Risks Relating to Deposits with Financial Institutions

Our cash and cash equivalents may be exposed to the failure of banking institutions. While we seek to minimize our exposure to third-party losses of our cash and cash equivalents, we hold our balances in a number of financial institutions. Notwithstanding their size and reserves, such institutions remain subject to the risk of failure. The Company had a banking relationship with First Republic Bank, which was seized and sold to JP Morgan on May 1, 2023. The Company’s deposits were within the FDIC insurance limits. The recent failures of First Republic Bank, Silicon Valley Bank and Signature Bank have had and may continue to have an adverse impact on other financial institutions, the extent of which impact cannot be foreseen at this time. If, in the future, the financial institutions with which we maintain deposits or transact business enter into receivership or become insolvent, there can be no guarantee that the Department of the Treasury, the Federal Reserve or the FDIC will intercede to protect depositors and customers. If, at any time, our deposits with any financial institution exceed the FDIC insurance limit, the Company’s deposits may be subject to loss. The Company’s access to its cash and cash equivalents could also become limited, impairing the Company’s ability to fund its remaining liquidation activities. In addition, if any parties with which we conduct business are unable to access funds pursuant to lending relationships or their deposit accounts with such a financial institution, the ability of such parties to continue to perform their obligations to us could be adversely affected, which, in turn, could have a material adverse effect on our liquidation activities and changes in net assets in liquidation.

Table of Contents

Part I

Item 1A.

Risk Factors (Continued)

Risks Relating to Management and Control

The Trust is controlled by the Liquidation Trustee and the Interestholders have no voting rights regarding decisions made on behalf of the Trust. All decisions concerning the Unresolved Causes of Action and distribution of assets of the Trust are to be made by the Liquidation Trustee, in accordance with the terms of the Plan and the Trust Agreement, with approval by the Supervisory Board for certain decisions as set forth in the Trust Agreement. The Interestholders have no right to elect or remove the Liquidation Trustee. The Liquidation Trustee may be removed by Bankruptcy Court order upon the motion of the Supervisory Board and a showing of good cause; provided, however, that the proposed removal and replacement of Michael Goldberg as Liquidation Trustee will require a determination by the Bankruptcy Court that “cause” exists for such removal and replacement using the standard under Bankruptcy Code section 1104 made after notice of such proposed removal and replacement has been provided to the SEC.

Interestholders have only limited rights against the Liquidation Trustee and the Liquidation Trustee has limited liability to the Trust. The Trust Agreement provides that the Liquidation Trustee and the Delaware Trustee (and their respective affiliates, directors, officers, employees and representatives) and any officer, employee or agent of the Trust or its affiliates have no liability to the Trust or the Interestholders except for acts or omissions of the Liquidation Trustee or the Delaware Trustee undertaken with the deliberate intent to injure the Interestholders or with reckless disregard for the best interests of the Interestholders. Any liability of the Liquidation Trustee will be limited to actual, proximate and quantifiable damages. The Trust Agreement further provides that the Liquidation Trustee shall not incur any liability for any act or omission under the Trust Agreement unless the Liquidating Trustee has acted with gross negligence, fraud, or willful misconduct. The Trust Agreement provides that the Interestholders have no voting rights (except in connection with certain amendments to the Trust Agreement).

The Trust has limited control over the Wind-Down Entity. The business and affairs of the Wind-Down Entity are managed by its Board of Managers. The Trust, as the sole member of the Wind-Down Entity, has only limited approval rights over decisions by the Board of Managers. Under the Wind-Down Entity LLC Agreement, the Trust may remove members of the Board of Managers only for Cause, as defined in the Wind-Down Entity LLC Agreement. Furthermore, except in the case of one specified property, the Trust has approved in advance any single-family home sale by the Wind-Down Group provided that the purchase price for such property is at or above the approved low-case price for such property in the Wind-Down Group’s current business plan. Only in the case of a sale of the specified property at a price less than its approved low-case price, is the Wind-Down Entity required to obtain the Trust’s approval for the sale of the property. In the event of a dispute between the Trust and the Wind-Down Entity as to any matter that cannot be resolved between the Trust and the Wind-Down Entity, the Wind-Down Entity LLC Agreement requires that the matter be resolved by the Bankruptcy Court.

The Company’s success depends on the continuing contributions of its key personnel. The Wind-Down Group has a skilled management team to oversee the resolution of construction defect claims relating to its single-family homes, the sale of its remaining real estate property and the accounting and financial reporting for the Trust. However, it does not have agreements with any key personnel that hinders such individuals’ ability to quit at will and, thus, any executive officer or key employee may terminate his or her relationship with the Wind-Down Group at any time upon relatively short notice.

Being a public company is expensive and administratively burdensome. The Trust is subject to the periodic reporting requirements of the Exchange Act. The Trust’s status as a reporting company under the Exchange Act causes the Trust to incur additional legal, accounting, financial reporting and other expenses. The Trust expects these rules and regulations to increase its legal and financial compliance costs and to make some activities more time-consuming and costly. The Trust also expects that these rules and regulations may make it more difficult and more expensive for the Trust to obtain director and officer liability insurance and that the Trust may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain approximately the same or similar coverage. As a result, it may be more difficult for the Trust to attract and retain qualified individuals to serve on the Supervisory Board.

~~Table of Contents~~

~~Part I~~

~~Item 1A. Risk Factors (Continued)~~

Risks Relating to Taxes

If the Trust is not treated as a liquidating trust for federal tax purposes, there may be adverse tax consequences to the Trust and the Interestholders. Pursuant to the Plan and the Trust Agreement, the Trust was organized with the intention that it conform to the requirements of a liquidating trust under applicable IRS rules. However, not all aspects of the formation of the Trust are expressly addressed in such rules, and the requirements of such rules are not always specific. No legal opinions have been requested from counsel, and no rulings have been or will be requested from the IRS, as to the tax treatment of the Trust. Accordingly, there can be no assurance that the IRS will not determine that the Liquidation Trust does not qualify as a liquidating trust. If the Trust does not qualify as a liquidating trust, there may be adverse federal income tax consequences, including taxation of the income of the Trust at the entity level, which could reduce the amount of Trust cash available for distributions to Interestholders or result in tax assessments of Interestholders upon their receipt of distributions.

Table of Contents

Part I

Item 1A.

Risk Factors (Continued)

As a liquidating trust, the Trust is subject to federal tax rules that limit its operations. To maintain its status as a liquidating trust, the Trust ~~will need~~needs to comply with IRS regulations and revenue procedures applicable to the operation of liquidating trusts. The Trust ~~will be~~is prohibited or restricted from, among other activities, engaging in the conduct of a trade or business, unreasonably prolonging its liquidation activities, or allowing business activities to obscure the liquidating purpose of the Trust. Furthermore, the Trust ~~will be~~is subject to restrictions on its ability to retain net income or the net proceeds from the sale of assets from year to year and to make ~~investments, and to use Trust funds to continue the development of the Wind-Down Entity’s real estate assets.~~investments. Due to the lack of specificity and indeterminate nature of the applicable requirements, there can be no assurance that the Trust will be able to comply with the IRS rules. If the Trust fails to comply with such rules, the IRS may determine that the Trust’s status as a liquidating trust may be revoked. Revocation of such status may entail adverse federal income tax consequences to the Trust and the Interestholders.

The Trust may be restricted under applicable federal tax rules from accepting all Fair Fund recoveries and Forfeited Assets. Under applicable IRS rules, liquidating trusts are not permitted to receive or retain cash or cash equivalents in excess of a “reasonable” amount to meet claims and contingent liabilities, ~~(including~~including potential construction defect claims and disputed ~~claims)~~claims or to maintain the value of the assets during liquidation. It is unclear whether the approximately $5 million cash contributions to the Trust under the Plan, together with any future Fair Fund recoveries or Forfeited Assets, will be determined to be an amount in excess of such limit.

An Interestholder’s tax liability could exceed distributions. If the Trust has income for a taxable year, the appropriate portion of that income may be includable in an Interestholder’s taxable income, whether or not any cash is actually distributed to the Interestholder by the Trust. The Plan and the Trust Agreement permit the Trust to reserve certain amounts to fund, among other things, operating and other expenses, and do not contain a mandatory tax distribution provision. Therefore, for any particular year, there may be no distribution or a distribution that is less than an Interestholder’s tax liability on its share of the income of the Trust. Interestholders are urged to consult with their tax advisors regarding the acquisition, ownership and disposition of Liquidation Trust Interests.

Purchasers of Liquidation Trust Interests may be required to make special calculations to determine tax gain or loss on the sale of Liquidation Trust Interests. The Trust does not ~~expect to~~ maintain a separate basis account for any purchaser of a Liquidation Trust Interest in an open market transaction. However, to the extent the Trust is treated as a grantor trust, the purchaser may be treated as though such purchaser purchased the Liquidation Trust Interest deemed to have been owned by the selling Interestholder. The new purchaser may receive a new tax basis in the acquired Liquidation Trust Interests equal to such purchaser’s purchase price of the Liquidation Trust Interests. Upon the sale of assets by the Trust and its related entities, the basis of the Liquidation Trust Interest on the books and records of the Trust may be different than the new purchaser’s basis, requiring the new purchaser to make special calculations to report the correct gain or loss for federal income tax purposes. ~~Investors~~Interestholders are urged to consult with their tax advisors regarding the acquisition, ownership and disposition of Liquidation Trust Interests.

Expenses incurred by the Trust may not be deductible by Interestholders. Expenses incurred by the Trust generally ~~will be~~are deemed to have been proportionately paid by each Interestholder. As such, these expenses may not be deductible or be subject to limitations on deductibility. Interestholders are urged to consult with their tax advisors regarding the acquisition, ownership and disposition of Liquidation Trust Interests.

~~Table of Contents~~

~~Part I~~

~~Item 1A. Risk Factors (Continued)~~

Before purchasing Liquidation Trust Interests, investors are urged to engage in careful tax planning with a tax professional. The federal income tax treatment of the Liquidation Trust Interests is complex and may not be clear in all cases. For example, in the case of an investor who purchases Liquidation Trust Interests in more than one transaction at different times and for different prices, and subsequently sells a portion of such Liquidation Trust Interests, there appears to be no clear guidance as to whether such purchaser can use average-cost basis in all of its Liquidation Trust Interests or instead may claim a higher or lower tax basis depending on the specific price of each lot. Additionally, the federal income tax treatment of the Liquidation Trust Interests may vary depending on the investor’s particular facts and circumstances. Investors other than individual citizens or residents of the U.S., and certain other persons subject to special treatment under the Internal Revenue Code, should consider the impact of their status on the tax treatment of such an investment. Persons subject to such special treatment under the Internal Revenue Code may include foreign companies, family trusts, 401(k) or individual retirement accounts, non-citizens of the U.S., tax-exempt organizations, real estate investment trusts, small business investment companies, regulated investment companies, governmental entities, entities exercising governmental authority, banks and certain other financial institutions, broker-dealers, insurance companies, and persons that have a functional currency other than the U.S. dollar.

Table of Contents

Part I

Item 1A.

Risk Factors (Continued)

Risks Relating to Accounting, Financial Reporting and Information Management

The Company’s consolidated financial statements are prepared on the Liquidation Basis of Accounting, which requires the estimation of the future value of assets and the amount of projected expenses. Estimates by management may be based, among other things, on projected ~~construction and~~ selling periods, ~~real estate appraisals,~~the estimated termination date of the Trust, and the levels of general and administrative expenses (such as payroll, ~~insurance~~legal and ~~rent)~~professional fees, office rent and other expenses). However, the actual realized value of the Company’s assets and the Company’s actual expenses are likely to differ from the estimated amounts reported in the Company’s consolidated financial statements, and such differences may be material and possibly adverse.

The Company’s consolidated financial statements do not include any future recoveries from Unresolved Causes of Action and no future Fair Fund recoveries are expected. The Company’s consolidated financial statements are prepared using the Liquidation Basis of Accounting, under which future cash flows are recorded only if the Company has executed an agreement, final court approval is received and collectability is reasonably assured. Because the Company is unable to reasonably estimate future recoveries, if any, from Unresolved Causes of Action, and no future Fair Fund recoveries are expected, such items have not been recognized in the Company’s consolidated financial statements. Therefore, the Company’s consolidated financial statements are not expected to provide prospective investors in the Liquidation Trust Interests with meaningful information regarding such future recoveries, the amount of which may be material to the Company’s net assets in liquidation.

The Wind-Down Entity’s real estate assets may not be liquidated at their recorded estimated net realizable value. The estimated net realizable value is an estimate of the amount that the Wind-Down Entity expects to realize from the sale of the real estate assets. The actual sales price and closing and other costs may differ from the amounts included in the consolidated financial statements. The estimated sales price and closing and other costs are ~~estimated~~ based on management’s analysis of current market conditions. The actual amounts realized will be based on negotiations between management and third-party buyers. The actual amounts realized will likely be different than the amounts included in the consolidated financial statements and the differences could be material and possibly adverse.

The Wind-Down Entity’s and the Trust’s ~~general and administrative~~operating costs, including reserves for construction defect claimsthat are included in accrued liquidation costs may be different than the actual costs incurred. The ~~estimated general and administrative~~projected costs may be different than the actual costs ~~as the amounts may be greater than the amount estimated~~ and the length of time required to complete the liquidation process may be longer than the time that was estimated. The actual amount of ~~general and administrative~~ costs will likely be different than the amounts included in the consolidated financial statements and the difference could be ~~material.~~

~~The Company’s consolidated financial statements do not include any future recoveries from Unresolved Causes of Action~~material and ~~no future Fair Fund recoveries are expected.~~ The Company’s consolidated financial statements are prepared using the Liquidation Basis of Accounting, under which future cash flows are recorded only if the Company has the ability to reasonably estimate them. Because the Company is unable to reasonably estimate the future recoveries, if any, from Unresolved Causes of Action, and no future Fair Fund recoveries are expected, such items have not been recognized in the Company’s consolidated financial statements. Therefore, the Company’s consolidated financial statements are not expected to provide prospective investors in the Liquidation Trust Interests with meaningful information regarding such future recoveries, the amount of which may be material to the Company’s net assets in liquidation.possibly adverse.

If the Trust is unable to maintain effective internal control over financial reporting in the future, the accuracy and timeliness of its financial reporting may be adversely affected. If the Trust identifies one or more material weaknesses in the Trust’s internal control over financial reporting and such weakness remains uncorrected at fiscal year-end, the Trust may be required to disclose that such internal control is ineffective at fiscal year-end. Were this to occur, the Trust could lose investor confidence in the accuracy and completeness of its financial reports, which could have a material adverse effect on the Trust’s reputation and the value of the Liquidation Trust Interests.

Any decision on the part of the Company, as an “emerging growth company,” to choose reduced disclosures applicable to emerging growth companies could make the Liquidation Trust Interests less attractive to investors. The Company is an “emerging growth company” as defined in the Securities Act and, for so long as it continues to be an emerging growth company, it may choose to take advantage of certain exemptions from various reporting requirements applicable to other public companies including, but not limited to, the requirement that internal control over financial reporting be audited by the Company’s independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure requirements regarding executive compensation and the extended transition period for complying with new or revised financial accounting standards. The Company may take advantage of these provisions for up to five years or such earlier time that the Company is no longer an emerging growth company. No assurance can be given that this reduced reporting will not have an impact on the price of the Class A Interests.

2528

Table of Contents

Part I

~~Item 1A.~~

Item 1A.

Risk Factors (Continued)

Information technology, data security breaches and other similar events could harm the Company. The Company relies on information technology and other computer resources to perform operational activities as well as to maintain its business records and financial data. The Company’s computer systems are subject to damage or interruption from power outages, computer attacks by hackers, viruses, catastrophes, hardware and software failures and breach of data security protocols by its personnel or third-party service providers. Although the Company has implemented administrative and technical controls and taken other actions to minimize the risk of cyber incidents and otherwise protect its information technology, computer intrusion efforts are becoming increasingly sophisticated and even the controls that the Company has installed might be breached. Further, most of these computer resources are provided to the Company or are maintained on behalf of the Company by third-party service providers pursuant to agreements that specify certain security and service level standards, but which ultimately are outside of the Company’s control. Additionally, security breaches of the Company’s information technology systems could result in the misappropriation or unauthorized disclosure of proprietary, personal and confidential information which could result in significant financial or reputational damages to the Company.

Item 1B.

Unresolved Staff Comments

None.

Item 1C.

Cybersecurity

Not Applicable.

Item 2.

Properties

As of September ~~23, 2022,~~27, 2023, the Company’s ~~principal~~real estate consists of one performing loan secured by a property ~~is one single-family home. The single-family home is~~ located in the ~~Bel Air area~~state of ~~Los Angeles, CA 90077~~Ohio and one property located in the state of Hawaii. A transaction for the sale of the property located in Hawaii is currently ~~listed for sale.~~pending.

2629

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Part I

Item 3.

Legal Proceedings

Table of Contents

Part I

Item 3.

Legal Proceedings (Continued)

Table of Contents

Part I

Item 3.

Legal Proceedings (Continued)

Table of Contents

Part I

Item 3.

Legal Proceedings (Continued)

~~Table of Contents~~

Table of Contents

Part I

Item 3.

Legal Proceedings (Continued)

Table of Contents

Part I

Item 3.

Legal Proceedings (Continued)

3035

Table of Contents

Part II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities (Continued)

3237

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Part II

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

~~Table of Contents~~

3742

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Part II

Item 7.

~~Item 7.~~ Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Table of Contents

Part II

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

~~Table of Contents~~

Table of Contents

Part II

~~(g)~~Item 7.

~~Included above.~~

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

~~Management believes that, since~~

Since its inception, the Wind-Down Entity has made substantial progress toward completion of its liquidation activities and ~~is nearing the end of the liquidation of its~~has liquidated all but two real estate ~~portfolio.~~assets with a net carrying value of approximately $0.77 million. Holders of Liquidation Trust Interests are advised that future distributions from the Trust, if any, will be ~~limited. Once the Company’s remaining real property assets have been liquidated~~limited and ~~the net proceeds resulting therefrom, net of reserves, have been distributed, further distribution(s)~~ will be materially reliant on future recoveries from litigation, net of accrued liquidation costs, including amounts for potential construction defect claims, which are uncertain and the amount and timing of which, if any, are difficult to determine.

Contractual Obligations

~~As of June 30, 2022, the Company has contractual commitments related to construction contracts totaling approximately $1.50 million.~~

The Company has an office lease that expires inon January ~~2023.~~31, 2024. The Company expects that it will continue to lease office space until the liquidation process is completed.

~~Table~~ The Wind-Down Entity has part-time employment agreements with its two executive officers through December 31, 2023. The agreements renew automatically until terminated, subject to the right of ~~Contents~~

~~Part II~~

~~Item 7. Management’s Discussion~~either party to terminate the agreement at any time and ~~Analysis of Financial Condition and Results of Operations (Continued)~~for any reason on thirty days’ advance written notice.

Critical Accounting Policies and Practices

The Company’s consolidated financial statements are prepared in accordance with U.S. GAAP. The accounting policies and practices that the Company believes are the most critical are discussed below. These accounting policies and practices require management to make decisions on subjective and/or complex matters that may inherently be uncertain. Estimates are required to prepare the consolidated financial statements in conformity with U.S. GAAP. Significant estimates, judgments and assumptions are required in a number of areas, including, but not limited to, the sales price of real estate assets, selling costs, development costs, holding costs, ~~potential warranty claims,~~ general and administrative costs to be incurred until the completion of the liquidation activities of the Company and estimated reserves for contingent ~~liabilities.~~liabilities, including potential construction defect claims and the administration of such claims after the Company’s liquidation activities are completed. In many instances, changes in the accounting estimates are likely to occur from period to period. Actual results may differ from the estimates. The Company believes the current assumptions and other considerations used in preparing the consolidated financial statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in the Company’s consolidated financial statements, the resulting changes could have a material adverse effect on the Company’s net assets in liquidation.

Liquidation Basis of Accounting

Under the Liquidation Basis of Accounting, all assets are recorded at their estimated net realizable value or liquidation value, which represents the estimated amount of net cash that ~~will~~may be received upon the disposition of the assets (on an undiscounted basis). Liabilities are measured in accordance with U.S. GAAP that otherwise applies to those liabilities. The Company has not recorded any amount from the future settlement of ~~Unresolved~~unresolved Causes of Action ~~or Fair Fund recoveries~~ in the accompanying consolidated financial statements ~~because they cannot~~until an agreement is executed, final court approval is received and collectability is reasonably assured. The amounts recovered may be ~~reasonably estimated.~~material to the Company’s net assets in liquidation.

Valuation of Real Estate

The measurement of real estate assets held for sale is based on current contracts (if any), if contingencies have been removed, estimates and other indications of sales value, net of estimated selling costs. To determine the value of real estate assets held for sale, the Company considered the three traditional approaches to value (cost, income and sales comparison) commonly used by the real estate appraisal community. The applicability and relevancy of each valuation approach as applied may differ by asset. In most cases, the sales comparison approach was accorded the greatest weight. This approach compares a property to other properties with similar characteristics that have recently sold. To validate management’s estimate, the Company also considers opinions from qualified real estate professionals and local real estate brokers and, in some cases, has obtained third party appraisals.

Table of Contents

Part II

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Other Assets

The Company recognizes recoveries from the settlement of unresolved Causes of Action when an agreement is executed and collectability is reasonably assured. An allowance for uncollectible settlement installment receivables is recorded when there is doubt about the collectability of the receivable. The Company records escrow receivables at the amount that is expected to be received when the escrow receivable is released. The Forfeited Assets received from the United States Department of Justice (the “DOJ”), other than cash, have been recorded at their estimated net realizable value. The Company accrues expected interest earnings when it can forecast the interest rate to be paid on its cash on deposit.

In addition, the Company recognizes other amounts to be received based on contractual terms or when the amounts to be received are certain.

Accrued Liquidation Costs

The estimated costs associated with implementing and completing the Company’s plan of liquidation are recorded as accrued liquidation costs. The Company has also recorded the estimated remaining development costs to be ~~incurred to prepare the assets~~paid and an accrual for ~~sale~~contingent liabilities, including potential construction defect claims as well as the estimated holding, maintenance and repair costs to be incurred ~~until the projected sale date~~ and the estimated general and administrative costs to be incurred until the completion of the liquidation of the ~~Company, and estimated reserves for contingent liabilities.~~Company.

Changes in Carrying Value

On a quarterly basis, the Company reviews the estimated net realizable values, liquidation costs and the estimated date of the completion of the liquidation of the Company and records any significant changes. The Company will also ~~revalue~~evaluate an asset when it is under contract for sale and the buyer’s contingencies have been removed. During the period that this occurs, the carrying value of the asset and the estimated closing and other costs will be adjusted, if necessary. If the Company has a change in its plan for the disposition of an asset, the carrying value will be adjusted to reflect this change in the period that the change is approved. The change in value may also include a change to the accrued liquidation costs related to the asset.

Estimates are required to prepare the consolidated financial statements in conformity with US GAAP. Significant estimates, judgments and assumptions are required in a number of areas, including, but not limited to, the sales price of real estate assets, selling costs, development costs, holding costs and general and administrative costs to be incurred until the completion of the liquidation of the Company and estimated reserves for contingent liabilities. In many instances changes in the accounting estimates are likely to occur from period to period. Actual results may differ from the estimates. The Company believes that the current assumptions and other considerations used in the consolidated financial statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in the Company’s consolidated financial statements, the resulting changes could have a material adverse effect on the Company’s net assets in liquidation.

~~Table of Contents~~

~~Part II~~

~~Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)~~

All changes in the estimated liquidation value of the Company’s assets, real estate ~~assets~~ held for sale, ~~and~~or other assets and liabilities, are reflected as a change to the Company’s net assets in liquidation.

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Part II

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable, as the Company is a “smaller reporting company” within the meaning of Rule 12b-2 of the Exchange Act.

Item 8.

Financial Statements and Supplementary Data

The information required by this Item is incorporated by reference to the consolidated financial statements set forth in Item 15 of Part IV of this Annual Report, “Exhibits and Financial Statement Schedules”.

Item 9.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

~~On July 19, 2019, the Trust engaged Squar Milner LLP (“Squar Milner~~”) as its first independent registered public accounting firm. Prior to such engagement, the Company did not consult with Squar Milner regarding either the application of accounting principles to any specified transaction or the type of audit opinion that might be rendered on the Company’s financial statements. Thus, Squar Milner did not provide any written reports or oral advice to the Company regarding such matters. There have been no disagreements between Squar Milner and the Company.None

~~On November 1, 2020, the Company was notified that its then independent registered public accounting firm Squar Milner was combined with Baker Tilly US, LLP (“Baker Tilly~~”) in a transaction pursuant to which Squar Milner combined its operations with Baker Tilly and certain of the professional staff and partners of Squar Milner joined Baker Tilly either as employees or partners of Baker Tilly. On November 1, 2020, Squar Milner resigned as the auditors of the Company and, with the approval of the Audit Committee of the Supervisory Board, Baker Tilly was engaged as its independent registered public accounting firm.

Prior to engaging Baker Tilly, the Company did not consult with Baker Tilly regarding the application of accounting principles to a specific completed or contemplated transaction or regarding the type of audit opinions that might be rendered by Baker Tilly on the Company’s financial statements, and Baker Tilly did not provide any written or oral advice that was an important factor considered by the Company in reaching a decision as to any such accounting, auditing or financial reporting issue.

The report of the independent registered public accounting firm of Squar Milner regarding the Company’s consolidated financial statements for the year ended June 30, 2020 and the period from February 15, 2019 (inception) through June 30, 2019 did not contain any adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles.

During the year ended June 30, 2020 and the period from February 15, 2019 (inception) through June 30, 2019, and during the interim period from the end of the most recently completed fiscal year through November 1, 2020, the date of resignation, there were no disagreements with Squar Milner on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Squar Milner would have caused it to make reference to such disagreement in its reports.

~~Table of Contents~~

~~Part II~~

Item 9A.

Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, management and the Liquidation Trustee evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of, the evaluation, management and the Liquidation Trustee concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including the Liquidation Trustee, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended.

In connection with the preparation of our Form 10-K, our management assessed the effectiveness of our internal control over financial reporting as of June 30, ~~2022.~~2023. In making that assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

Based on its assessment, our management believes that, as of June 30, ~~2022,~~2023, our internal control over financial reporting was effective based on those criteria. There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.

Other Information

None.

Item 9C.

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

None.

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Part III

Item 10.

Directors, Executive Officers, and Corporate Governance

Table of Contents

Part III

Item 10.

Directors, Executive Officers, and Corporate Governance (Continued)

4651

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Part III

Item 11.

~~Item 11.~~ Executive Compensation (Continued)

Mr. Goldberg’s incentive compensation has been determined by the Supervisory Board, in the exercise of its discretion as authorized by the Trust Agreement, as five percent (5%) of the total gross proceeds recovered by the Trust from the pursuit of Causes of Action by the Trust. Such incentive compensation is intended to compensate Mr. Goldberg for services performed above and beyond the time commitment required of the Liquidation Trustee. The Supervisory Board believes that incentive compensation based on the value of recoveries on Causes of Action is standard and customary for bankruptcy and insolvency trustees and is designed to maximize the value of recoveries on Causes of Action and appropriately align the economic interests of the Liquidation Trustee with those of the Trust.

Payment of compensation to the Liquidation Trustee or his professionals in connection with any individual request for compensation is subject to the following procedures, specified in the Trust Agreement:

the Liquidation Trustee must submit to the Supervisory Board an itemized statement or statements reflecting all fees and itemized costs to be reimbursed;

after seven (7) days after the delivery of the statements, the amount reflected in the statements may be paid by the Trust unless, prior to the expiration of such seven-day period, the Supervisory Board has objected in writing to any compensation reflected in the Statement; and

in the case of any Supervisory Board objection to payment, the undisputed amounts may be paid, and the disputed amounts may only be paid by agreement of the Supervisory Board, or pursuant to order of the Bankruptcy Court, which retains jurisdiction over all disputes regarding the Liquidation Trustee’s and his or her professionals’ compensation.

Current Chief Executive Officer of the Wind-Down Entity

~~Full-Time~~Fong Part-Time Employment Agreement ~~(In Effect Through August~~(Effective January 1, 2023)

Since January 1, 2023, the Wind-Down Entity and its current Chief Executive Officer and Chief Financial Officer, Marion W. Fong, have been parties to an agreement providing for Ms. Fong’s part-time employment as Chief Executive Officer and Chief Financial Officer, which was entered into on November 30, 2022 (the “Fong Part-Time Agreement”). Pursuant to the Fong Part-Time Agreement, the Wind-Down Entity agreed to employ Ms. Fong on a part-time, non-exclusive basis as the Wind-Down Entity’s Chief Executive Officer and Chief Financial Officer effective January 1, 2023. Ms. Fong’s prior full-time employment as Chief Financial Officer of the Wind-Down Entity continued to be governed by her previously existing employment agreement with the Wind-Down Entity through December 31, ~~2022)~~2022, at which time her employment under such agreement terminated.

The Fong Part-Time Agreement establishes an initial term of part-time employment commencing on January 1, 2023 and expiring on December 31, 2023, unless terminated earlier. The initial term thereafter is subject to automatic renewal until terminated. The Fong Part-Time Agreement sets forth Ms. Fong’s duties as Chief Executive Officer and Chief Financial Officer and her compensation and rights to reimbursement of costs and expenses and indemnification. The Fong Part-Time Agreement is terminable by the death of Ms. Fong or by either the Wind-Down Entity or Ms. Fong at any time and for any reason on at least 30 days’ advance written notice.

Under the Fong Part-Time Employment Agreement, Ms. Fong is entitled to a monthly salary of $35,000. Additionally, during the term of the Fong Part-Time Employment Agreement, Ms. Fong and her eligible spouse and dependents are entitled to participation in the Wind-Down Entity’s health, dental, vision and life insurance coverages, but Ms. Fong will not accrue any paid vacation. Ms. Fong is not eligible for any discretionary bonus during the part-time employment term.

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Part III

Item 11.

Executive Compensation (Continued)

The Wind-Down Entity is obligated, under the Fong Part-Time Employment Agreement, the Wind-Down Entity LLC Agreement and indemnification agreements with Ms. Fong, to indemnify and hold harmless Ms. Fong from and against certain liabilities, losses, damages and expenses incurred by either of them by reason of acts or omissions as an officer of the Wind-Down Entity.

Former Chief Executive Officer of the Wind-Down Entity

Through August 31, 2022, the Wind-Down Entity and its then Chief Executive Officer Frederick Chin were parties to an agreement providing for Mr. Chin’s full-time, at-will employment as Chief Executive Officer, which agreement ~~(the “Full-Time Employment Agreement”) was amended in September 2020 and subsequently~~ expired on August 31, ~~2022.~~2022 (as amended, the “Chin Full-Time Employment Agreement”). From September 1, 2022 through December 31, 2022, the Wind-Down Entity and Mr. Chin were parties to an agreement providing for Mr. Chin’s continued employment as Chief Executive Officer on a part-time basis (the “Chin Part-Time Employment Agreement”). The ~~following summarizes the~~ material terms of Mr. Chin’s compensation under ~~the~~these agreements are summarized below.

Chin Full-Time ~~Employment. The material terms of Mr. Chin’s compensation for periods following~~Employment Agreement (Through August 31, 2022)

Through August 31, 2022, ~~are set forth in~~ the ~~September 1, 2022 part-time employment agreement with Mr.~~Wind-Down Entity and Frederick Chin ~~(see “Item 11. Executive Compensation--Part-Time~~were parties to the Chin Full-Time Employment Agreement ~~(Effective September 1, 2022)” of Part III of this Annual Report, below).~~

providing for Mr. Chin’s full-time employment as Chief Executive Officer. Under the Chin Full-Time Employment Agreement, Mr. Chin was entitled to an annual base salary ~~and incentive compensation. Mr. Chin’s current annual base salary was~~of $975,000 ~~subject to annual increase not to exceed 10% of~~at the ~~prior year’s annual base salary based on a merit review by the Board of Managers.~~

~~Mr. Chin was eligible for certain potential~~time such agreement expired, as well as bonuses based on thecumulative amount of distributionsof cash made by the Wind-Down Entity to the Trust during certain specified periods as ~~set forth~~provided in the ~~table below.~~Chin Full-Time Employment Agreement. For each period, a threshold amount of distributions ~~were~~was required to have been made ~~during such period~~ for any bonus to be earned. Any bonuses earned were required to have been paid within 30 days of the end of the applicable period, however, Mr. Chin would not have been entitled to any bonus regardless of the cumulative amount of distributions in any period if his employment had been terminated by the Wind-Down Entity for “Cause” or if he had voluntarily resigned other than for “Good Reason” before (i) February 15, 2022 with respect to a category A bonus or (ii) within 30 days of the end of the applicable period with respect to a category B bonus, in each case as identified in the chart below. For purposes of determining the amount of cumulative distributions during the period for a category B bonus, cash amounts collected by the Wind-Down Group but not distributed to the Trust during any such period were includible in cumulative distributions for such period so long as the Board of Managers of the Wind-Down Entity certified that such cash would be distributed to the Trust in a subsequent period.

~~Table of Contents~~

~~Part III~~

~~Item 11. Executive Compensation (Continued)~~

Bonus
Category
Period
Threshold
Amount
Cumulative
Amount
Distributions
During Period
Bonus
Payment
Amount for
Period
A February 15, 2019 through the earlier to occur of the expiration of the term of the Full-Time Employment Agreement and the completion of the liquidation process for the Wind-Down Entity $351,093,000 $351,093,000 to $401,442,999 $1,125,000
$401,443,000 to $528,584,999 $1,500,000
$528,585,000 or over $1,875,000

Bonus
Category
Period
Threshold
Amount
Cumulative
Amount
Distributions
During Period
Bonus
Payment
Amount for
Period
B February 15, 2019 through December 31, 2019 $97,332,000 $97,332,000 to $106,504,999 $487,500
$106,505,000 to $125,454,999 $637,500
$125,455,000 or more $862,500
February 15, 2019 through December 31, 2020 $178,677,000 $178,677,000 to $206,372,999 $487,500
$206,373,000 to $262,744,999 $637,500
$262,745,000 or more $862,500
February 15, 2019 through the expiration of the term of the Full-Time Employment Agreement $351,093,000 $351,093,000 to $401,442,999 $487,500
$401,443,000 to $528,584,999 $637,500
$528,585,000 or more $862,500

~~The Full-Time Employment Agreement was amended in September 2020 to extend the initial term of his employment from August 14, 2021 to February 14, 2022 and to provide that if Mr.~~ Chin was employed by the Wind-Down Entity on December 31, 2021, Mr. Chin would be eligible for a discretionary bonus for calendar year 2021. These changes were approved by the Board of Managers and the Supervisory Board. Such changes were considered necessary and appropriate in light of the then projected extended duration of the Wind-Down Entity’s liquidation activities.

If Mr. Chin’s employment was terminated by the Wind-Down Entity without “Cause,” or if Mr. Chin resigned for “Good Reason,” Mr. Chin would be entitled, in addition to accrued salary and earned but unpaid bonuses, to a continued base salary for the remainder of the term of the Full-Time Employment Agreement plus payments of the bonus amounts as set forth in the chart above to which Mr. Chin would have been entitled if he had remained employed during the entire term of the Full-Time Employment Agreement (such bonus amounts to be paid if and when otherwise due under the Full-Time Employment Agreement). If Mr. Chin’s employment was terminated by his death or disability, Mr. Chin or his estate would be entitled to receive, in addition to accrued salary and earned but unpaid bonuses, payments of the bonus amounts set forth in the chart above to which Mr. Chin would have been entitled if he had remained employed during the entire term of the Full-Time Employment Agreement (such bonus amounts to be paid if and when otherwise due under the employment agreement), prorated on the basis of the distributions actually made prior to the effective date of termination for the period(s) applicable to the bonus determination.

The Wind-Down Entity was obligated, under the Full-Time Employment Agreement, the Wind-Down Entity LLC Agreement and an Indemnification Agreement with Mr. Chin dated February 27, 2019, to indemnify and hold harmless Mr. Chin from and against certain liabilities, losses, damages and expenses incurred by him by reason of his acts or omissions as an officer of the Wind-Down Entity.

Under the Full-Time Employment Agreement, Mr. Chin was entitled to four weeks of paid vacation each year and Mr. Chin and his eligible dependents are entitled to participate in the Wind-Down Entity’s health, dental, vision and life insurance coverages.

~~Table of Contents~~

~~Part III~~

~~Item 11. Executive Compensation (Continued)~~

Part-Time Employment Agreement ~~(Effective September~~(September 1 to December 31, 2022)

On September 1, 2022, the Wind-Down Entity entered into an agreement with its chief executive officer (the “Part-Time Employment Agreement”). The Part-Time Employment Agreement provides for the continued employment of Mr. Chin as chief executive officer of the Company on a part-time basisimmediately following the expiration of the Chin Full-Time Employment Agreement on August 31, 2022, of the ~~term of his full-time~~Wind-Down Entity and Mr. Chin entered into the Chin Part-Time Employment Agreement providing for Mr. Chin’s continued at-will employment ~~with the Company.~~as Chief Executive Officer on a part-time basis. Other than with respect to compensation and certain other items, the Chin Part-Time Employment Agreement iswas substantially similar in form to Mr. Chin’s ~~now-expired Full-Time Employment Agreement.~~expired full-time agreement.

The Chin Part-Time Employment Agreement established an initial term of employment ~~that begins on September 1, 2022 and, subject to any earlier termination, ends~~ending on December 31, ~~2022 provided that~~2022. Under the Company’s principal remaining residential real property has been sold on or before December 1, 2022. If such asset has not been sold on or before December 1, 2022, the term of the Part-Time Employment Agreement will automatically be extended until the date that is 30 days after the sale of such property, on which date the Part-Time Employment Agreement will automatically expire unless terminated earlier in accordance with its terms.

~~The Part-Time Employment Agreement is terminable by the death of Mr.~~ Chin ~~or by either the Wind-Down Entity or Mr. Chin at any time and for any reason on at least 30 days’ advance written notice.~~

~~Under the~~ Part-Time Employment Agreement, Mr. Chin iswas entitled to a monthly salary of $50,000 during the initial term and $30,000 during any extension term. ~~Additionally, during~~In the ~~term of the Part-Time Employment Agreement, Mr.~~ Chin ~~and his eligible dependents are entitled to participation in the Wind-Down Entity’s health, dental, vision and life insurance coverages, but Mr. Chin will not accrue any paid vacation. In the~~ Part-Time Employment Agreement, the Wind-Down Entity ~~acknowledges~~acknowledged that Mr. Chin iswas entitled to payment of accrued but unused vacation time on August 31, 2022 and to the receipt, no later than September 30, 2022, of the bonus payments prescribed by ~~his now-expired~~the prior, expired Chin Full-Time Employment Agreement.

~~Upon any termination of~~ Mr. Chin’s employment under the Chin Part-Time Employment Agreement entitles Mr. Chin to receive salary prorated to the effective date of termination and employee benefits through the effective date of termination. Additionally, Mr. Chin is entitled to receive continued payments of his monthly salary and employee benefits throughended on December 31, ~~2022 (but not thereafter), if before December 31, 2022 Mr. Chin’s employment is terminated either by the Company without Cause or by Mr. Chin for Good Reason.~~2022.

Table of Contents

Part III

Item 11.

Executive Compensation (Continued)

Other Executive Officers of Wind-Down Entity

~~The Wind-Down Entity is a party to at-will employment agreements with its~~From February 2019 through December 31, 2022, Ms. Fong served as Chief Financial Officer ~~Marion W. Fong and its~~of the Wind-Down Entity under a full-time, at-will employment agreement, which agreement terminated on December 31, 2022. The material terms of Ms. Fong’s compensation under such agreement are summarized below under “Fong Full-Time Employment Agreement (Through December 31, 2022).” From February 2019 through December 31, 2022, David Mark Kemper II served as Chief Operating Officer and Chief Investment Officer ~~David Mark Kemper II. Unless sooner terminated, the terms of these employment agreements expire upon the dissolution~~ of the Wind-Down ~~Entity. Under their~~Entity under a full-time, at-will employment ~~agreements, Ms. Fong and~~agreement, which agreement terminated on December 31, 2022. The material terms of Mr. Kemper’s compensation under such agreement are summarized below under “Kemper Full-Time Employment Agreement (Through December 31, 2022).” Since January 1, 2023, Mr. Kemper has served as Chief Operating Officer under the Kemper Part-Time Agreement. The material terms of Mr. Kemper’s compensation under such agreement are ~~entitled to an~~summarized below under “Kemper Part-Time Employment Agreement (Effective January 1, 2023).”

Fong Full-Time Employment Agreement (Through December 31, 2022)

During the calendar year 2022, Ms. Fong’s annual base salary ~~and incentive compensation.~~

~~Ms. Fong’s current annual base salary is~~was $598,950 ~~and Mr. Kemper’s annual base salary is $465,850, in each case subject to annual increase at~~under the ~~discretion of~~Fong Full-Time Employment Agreement. Under the ~~Board of Managers.~~Fong Full-Time Employment Agreement, Ms. Fong ~~and Mr. Kemper are~~was eligible for up to three discretionary bonuses as described below, a one-time wind-down bonus, and a one-time retention bonus.

Ms. Fong earned bonuses of $136,125 for calendar year 2021 and $638,550 for calendar year 2022. The 2021 bonus was paid in January 2022 (fiscal year 2022) and the 2022 bonus was paid in January 2022 (fiscal year 2023).

Kemper Full-Time Employment Agreements (Through December 31, 2022)

During the calendar year 2022,Mr. Kemper’s annual base salary was $465,850 under the Kemper Full-Time Employment Agreement. Under the Kemper Full-Time Employment Agreement Mr. Kemper was eligible for up to three discretionary bonuses as described below, a one-time wind-down bonus, and a one-time retention bonus.

Mr. Kemper earned bonuses of ~~$123,750 and $96,250, respectively~~$105,875 for calendar year ~~2020~~2021 and ~~$136,125 and $105,875, respectively~~$496,650 for calendar year ~~2021.~~2022. The ~~2020 bonuses were~~2021 bonus was paid in ~~December 2020~~January 2022 (fiscal year ~~2021)~~2022) and the ~~2021 bonuses were~~2022 bonus was paid in ~~December 2021~~January 2022 (fiscal year ~~2022)~~2023).

~~In accordance with their respective agreements, Ms. Fong and Mr.~~ Kemper ~~each is entitled to consideration for discretionary bonuses for the period from~~Part-Time Employment Agreement (Effective January 1, 2023)

The Wind-Down Entity is a party to an at-will employment agreement with its Chief Operating Officer David Mark Kemper II, entered into on November 30, 2022 (the “Kemper Part-Time Agreement”).

Pursuant to the ~~date of the dissolution of~~Kemper Part-Time Agreement, the Wind-Down Entity ~~in an amount up~~has agreed to ~~25% of such officer’s 2022 base salary, provided that such officer is still employed~~employ Mr. Kemper on a part-time, non-exclusive basis as the Wind-Down Entity’s Chief Operating Officer effective January 1, 2023. Mr. Kemper’s full-time employment as Chief Operating Officer and Chief Investment Officer continued to be governed by his previously existing employment agreement with the Wind-Down Entity ~~upon its dissolution.~~through December 31, 2022, at which time his employment under such agreement terminated.

~~Ms. Fong~~The Kemper Part-Time Agreement establishes an initial term of part-time employment commencing on January 1, 2023 and expiring on December 31, 2023, unless terminated earlier. The initial term thereafter is subject to automatic renewal until terminated. The Kemper Part-Time Agreement sets forth Mr. Kemper’s duties as Chief Operating Officer and his compensation and rights to reimbursement of costs and expenses and indemnification. The Kemper Part-Time Agreement is terminable by the death of Mr. Kemper ~~each is eligible to earn a wind-down bonus in an amount of~~or by either ~~50%, 100% or 150% of such officer’s then-current base salary (less any discretionary bonuses paid), depending on whether~~ the Wind-Down Entity ~~achieves the low, base~~ or high case, respectively, of the projected cumulative amount of distributions by the Wind-Down Entity to the Trust from February 15, 2019 (inception) to the date of the dissolution of the Wind-Down Entity. No wind-down bonus is payable if the amount of such distributions is less than the low case. If earned, the wind-down bonus is payable withinMr. Kemper at any time and for any reason on at least 30 days after the dissolution of the Wind-Down Entity, provided that the officer has not been terminated for “Cause” and has not voluntarily resigned other than for “Good Reason” before such dissolution.days’ advance written notice.

~~Neither Ms. Fong nor~~Under the Kemper Part-Time Employment Agreement, Mr. Kemper is entitled to ~~severance benefits. In lieu~~a monthly salary of ~~such benefits, each~~$25,000. Additionally, during the term of ~~them~~the Kemper Part-Time Employment Agreement, Mr. Kemper and his eligible spouse and dependents are entitled to participation in the Wind-Down Entity’s health, dental, vision and life insurance coverages, but Mr. Kemper will not accrue any paid vacation. Mr. Kemper is not eligible ~~to earn, at~~for any discretionary bonus during the ~~time of his or her termination of~~part-time employment a retention bonus in an amount equal to six months of such officer’s base salary at the time of such termination. The retention bonus is payable only if (a) such officer resigns for “Good Reason,” (b) such officer’s employment term expires, or (c) such officer is terminated without “Cause.”term.

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Part III

Item 11.

~~Item 11.~~ Executive Compensation (Continued)

The Wind-Down Entity is obligated, under the ~~employment agreements with Ms. Fong and Mr.~~ Kemper Part-Time Employment Agreement, the Wind-Down Entity LLC Agreement and indemnification agreements with ~~each such officer,~~Mr. Kemper, to indemnify and hold harmless ~~each such officer~~Mr. Kemper from and against certain liabilities, losses, damages and expenses incurred by either of them by reason of acts or omissions as an officer of the Wind-Down Entity.

Under their employment agreements, Ms. Fong and Mr. Kemper are entitled to four weeks of annual paid vacation, as well as participation in the Wind-Down Entity’s health, dental, vision and life insurance coverages.

Ms. Fong’s and Mr. Kemper’s employment agreements were amended in September 2020 to provide for their eligibility for the discretionary bonus for 2021 and, if the Wind-Down Entity dissolves after January 1, 2022, for period from January 1, 2022 to the date of dissolution. Any such discretionary bonuses will be deducted from any wind-down bonus earned by Ms. Fong and Mr. Kemper. These changes were approved by the Board of Managers and the Supervisory Board. Such changes were considered necessary and appropriate in light of the currently projected extended duration of the Wind-Down Entity’s liquidation activities.

Compensation Committee Interlocks and Insider Participation

Neither the Trust nor the Wind-Down Entity has a compensation committee or other board committee performing equivalent functions. During the fiscal year ended June 30, 2022, there were no deliberations by the Board of Managers related to the employment agreements of Mr. Chin, Ms. Fong or Mr. Kemper. However, subsequent to the fiscal year ended June 30, 2022, onOn August 18, 2022 and August ~~26,~~25, 2022, the Supervisory Board and the Board of Managers, respectively, without participation by Mr. Chin in its deliberations, approved ~~a new~~that Chin Part-Time Employment Agreement with Mr. Chin, which followed Mr. Chin’s previous ~~Full-time Employment Agreement.~~full-time employment agreement. The Chin Part-Time Employment Agreement was determined to be appropriate in light of the continuing need for Mr. Chin’s services on a part-time basis following the August 31, 2022 expiration of the ~~Full-Time~~Chin Full-time Employment Agreement. The principal objectives of the Chin Part-Time Employment Agreement include (i) incentivizing Mr. Chin’s continued retention through the anticipated closing date of the sale of the Company’s remaining residential real property asset, (ii) aligning Mr. Chin’s compensation with the increasingly reduced level of the Company’s liquidation activities by means of a salary adjustment, (iii) acknowledging of the vesting of Mr. Chin’s incentive awards under the Chin Full-Time Employment Agreement, and (iv) continuing of Mr. Chin’s existing employee benefits through December 31, 2022. The award of equity-based compensation was not considered, as the Company’s legal structure does not permit such compensation. The Company did not consider the results of any shareholder advisory vote on the compensation of Mr. Chin, as no such vote was required.

On November 30, 2022, the Board of Managers, without participation by Ms. Fong and Mr. Kemper approved the Fong Part-Time Employment Agreement and the Kemper Part-Time Employment Agreement. These agreements were entered into in order to consolidate management functions and reduce management costs in light of the substantially reduced real estate portfolio. The award of equity-based compensation was not considered, as the Company’s legal structure does not permit such compensation. The Company did not consider the results of any shareholder advisory vote on the compensation of Ms. Fong or Mr. Kemper, as no such vote was required.

During the fiscal year ended June 30, ~~2022,~~2023, there were no deliberations by the Supervisory Board regarding the compensation of Mr. Goldberg.

Table of Contents

Part III

Item 11.

Executive Compensation (Continued)

Compensation of Supervisory Board and Board of Managers

Each member of the Supervisory Board that does not serve on the Audit Committee receives (or received), as compensation in respect of service on the Supervisory Board, (i) $10,000 per month through January 31, 2020, (ii) $7,500 per month from February 1, 2020 through January 31, 2021, (iii) $5,000 per month from February 1, 2021 through January 31, 2022, and (iv) $2,500 per month for each calendar month thereafter until termination of the Trust in accordance with the Plan (prorated as appropriate if a member commences his or her service other than on the first day of a month or terminates his or her service other than on the last day of a month). The sole member of the Supervisory Board that serves on the Audit Committee receives, as compensation in respect of service, $7,500 per month. All Supervisory Board members also are entitled to reimbursement by the Trust of all actual, reasonable and documented out-of-pocket expenses incurred in connection with their service on the Supervisory Board.

The compensation of the Supervisory Board was not determined by the Supervisory Board, but instead was established by, and is fixed under, the Trust Agreement and cannot be modified except by amendment of the Trust Agreement. An amendment of the Trust Agreement effecting a modification in the compensation of the Supervisory Board would require either (a) an order of the Bankruptcy Court or (b) a written amendment signed by the Liquidation Trustee, which amendment has received the prior written approval of a majority of the members of the Supervisory Board.

Each member of the Board of Managers (other than the CEO) ~~receives,~~received, as compensation in respect of service on the Board of Managers, (i) $20,000 per month through January 31, 2020 and (ii) $15,000 per month for each calendar month of service thereafter. The Wind-Down Entity is required to reimburse each Manager in respect of all actual, reasonable and documented out-of-pocket expenses incurred by such Manager in accordance with Wind-Down Entity policies. Effective December 31, 2022, the number of members of the Board of Managers was reduced from three to two, upon the resignation of Mr. Chin.

Effective April 1, 2023, the two remaining members of the Board of Managers agreed to voluntarily reduce their monthly compensation from $15,000 per month per manager for each calendar month of service to $10,000 per month per manager for each calendar month of service.

~~Table~~The Board of ~~Contents~~

~~Part III~~

~~Item 11. Executive Compensation (Continued)~~

Managers was further reduced from two to one effective upon the resignation of Mr. Nevins on April 29, 2023. Following Mr. Nevins’ resignation, Mr. Reiss became the sole member of the Board of Managers. Effective May 1, 2023, Mr. Reiss ceased to be entitled to receive compensation for being a member of the Board of Managers. Mr. Reiss continues to be entitled to reimbursement for actual, reasonable, and documented out-of-pocket costs and expenses related to his service as a manager.

Indemnification of the Liquidation Trustee

Under Delaware law, the Trust has the power to indemnify and hold harmless any person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its governing instrument. The Trust is governed by the Trust Agreement, which states that the Liquidation Trustee, the Supervisory Board and each of their respective accountants, agents, assigns, attorneys, bankers, consultants, directors, employees, executors, financial advisors, investment bankers, real estate brokers, transfer agents, managers, members, officers, partners, predecessors, principals, professional persons, representatives, and successors (each, a “Trustee Indemnified Party”) will be indemnified for, and defended and held harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost, or expense, including the reasonable fees and expenses of their respective professionals (collectively “Damages”) incurred without gross negligence, willful misconduct, or fraud on the part of the applicable Trustee Indemnified Party (which gross negligence, willful misconduct, or fraud, if any, must be determined by a final, non-appealable order of a court of competent jurisdiction) for any action taken, suffered, or omitted to be taken by the Trustee Indemnified Parties in connection with the acceptance, administration, exercise, and performance of their duties under the Plan or the Trust Agreement, as applicable. An act or omission taken with the approval of the Bankruptcy Court, and not inconsistent therewith, will be conclusively deemed not to constitute gross negligence or willful misconduct.

In addition, the Trust Agreement provides that, to the fullest extent permitted by law, each Trustee Indemnified Party shall be indemnified for, and defended and held harmless against, any and all Damages arising out of or due to their actions or omissions, or consequences of such actions or omissions, with respect to the Trust or the implementation or administration of the Plan if the applicable Trustee Indemnified Party acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interest of the Trust or its Interestholders.

Table of Contents

Part III

Item 11.

Executive Compensation (Continued)

The Trust Agreement also authorizes, but does not require, the Liquidation Trustee to obtain all reasonable insurance coverage for itself, its agents, representatives, employees or independent contractors, including coverage with respect to the liabilities, duties and obligations of the Liquidation Trustee and its agents, representatives, employees or independent contractors under the Trust Agreement and the Plan. The cost of any such insurance coverage will be an expense of the Trust.

Indemnification of the Board of Managers, the CEO and Executive Officers of the Wind-Down Entity

The Wind-Down Entity and the Trust are required to indemnify the members of the Board of Managers, the Chief Executive Officer, and the other officers of the Wind-Down Group, and each of their respective accountants, agents, assigns, attorneys, bankers, consultants, directors, employees, executors, financial advisors, investment bankers, brokers, managers, members, officers, partners, predecessors, principals, professional persons, representatives, and successors (each, a “WDE Indemnified Party”) for, and shall defend and hold them harmless against, Damages incurred without gross negligence or willful misconduct on the part of the applicable WDE Indemnified Party (which gross negligence or willful misconduct, if any, must be determined by a final, non-appealable order of a court of competent jurisdiction) for any action taken, suffered, or omitted to be taken by the WDE Indemnified Parties in connection with the acceptance, administration, exercise, and performance of their duties under the Plan or the Wind-Down Entity LLC Agreement, as applicable. An act or omission taken with the approval of the Bankruptcy Court, and not inconsistent therewith, will be conclusively deemed not to constitute gross negligence or willful misconduct.

In addition, the Wind-Down Entity and the Trust are required, to the fullest extent permitted by law, indemnify, defend, and hold harmless the WDE Indemnified Parties, from and against and with respect to any and all Damages arising out of or due to their actions or omissions, or consequences of such actions or omissions, with respect to the Wind-Down Entity or the implementation or administration of the Plan if the applicable WDE Indemnified Party acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interest of the Wind-Down Entity.

The Wind-Down Entity is a party to indemnification agreements with its former Chief Executive Officer Frederick Chin, its current Chief Executive Officer and Chief Financial Officer Marion W. Fong, and its Chief Operating Officer and former Chief Investment Officer David Mark Kemper II. Under these agreements, the Wind-Down Entity has agreed to indemnify each of these individuals, to the fullest extent permitted by applicable law and the Wind-Down Entity’s certificate of formation and limited liability company agreement, and the Plan, if such individual becomes a party to or a witness or other participant in any proceeding (other than a derivative action) by reason of the fact that such individual is or was an officer, manager or employee of the Wind-Down Entity, or by reason of anything done or not done by him in any such capacity, against all expenses and liabilities incurred without gross negligence or willful misconduct by such individual.

~~Table of Contents~~

~~Part III~~

~~Item 11. Executive Compensation (Continued)~~

Under these indemnification agreements, the Wind-Down Entity has also agreed to indemnify Mr. Chin, Ms. Fong and Mr. Kemper, with respect to any derivative action to which such individual becomes a party or a witness or in which such individual becomes a participant, against expenses actually and reasonably incurred in connection with the defense or settlement of such action, provided that such individual acted in good faith and in a manner such individual reasonably believed to be in or not opposed to the best interests of the Company. These indemnification agreements provide for proportional contribution to the Wind-Down Entity based on relative benefit and relative fault where indemnification is held by a court to be unavailable to the individual and for the advancement by the Wind-Down Entity of the individual’s expenses under certain circumstances.

Table of Contents

Part III

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information regarding the equity securities of the Trust beneficially owned by each member of the Supervisory Board, the Liquidation Trustee and each executive officer named in the Summary Compensation Table (see “Item 11. Executive Compensation” of this Annual Report), and all members of the Supervisory Board, the Liquidation Trustee and all executive officers of the Wind-Down Entity as a group on September ~~23, 2022:~~27, 2023:

Name of and Address of Beneficial Owner⁽¹⁾	Class of Liquidation Trust Interest	Amount and Nature of Beneficial Interest			Percent of class⁽²⁾		Class of Liquidation Trust Interest	Amount and Nature of Beneficial Interest		Percent of class⁽²⁾
Jay Beynon	Class A		6,666.67	⁽³⁾	Less than 1%		Class A	6,666.67	⁽³⁾	Less than 1%
Jay Beynon	Class B		0			0	Class B	0			0
Raymond C. Blackburn, M.D.	Class A		35,788.06	⁽⁴⁾	Less than 1%		Class A	35,788.06	⁽⁴⁾	Less than 1%
Raymond C. Blackburn, M.D.	Class B		13,574.78	⁽⁵⁾		2.01%	Class B	13,574.78	⁽⁵⁾		2.01	%
Terry R. Goebel	Class A		0			0	Class A	0			0
Terry R. Goebel	Class B		0			0	Class B	0			0
Lynn Myrick	Class A		23,819.17	⁽⁶⁾	Less than 1%		Class A	23,819.17	⁽⁶⁾	Less than 1%
Lynn Myrick	Class B		1,590.81	⁽⁷⁾	Less than 1%		Class B	1,590.81	⁽⁷⁾	Less than 1%
John J. O’Neill	Class A		8,786.60	⁽⁸⁾	Less than 1%		Class A	8,786.60	⁽⁸⁾	Less than 1%
John J. O’Neill	Class B		0			0	Class B	0			0
M. Freddie Reiss	Class A		0			0	Class A	0			0
M. Freddie Reiss	Class B		0			0	Class B	0			0
Michael I. Goldberg	Class A		0			0	Class A	0			0
Michael I. Goldberg	Class B		0			0	Class B	0			0
Frederick Chin	Class A		0			0
Frederick Chin	Class B		0			0
Marion W. Fong	Class A		0			0	Class A	0			0
Marion W. Fong	Class B		0			0	Class B	0			0
David Mark Kemper II	Class A		0			0	Class A	0			0
David Mark Kemper II	Class B		0			0	Class B	0			0
All Supervisory Board members and the executive officers, as a group	Class A		75,060.50		Less than 1%		Class A	75,060.50		Less than 1%
	Class B		15,165.59			2.24%	Class B	15,165.59			2.24	%

⁽¹⁾

A business address for each of the named beneficial owners is c/o Woodbridge Liquidation Trust, 201 N. Brand Blvd., Suite M, Glendale, California 91203.

⁽²⁾

Based on ~~11,514,190~~11,514,578 Class A Interests and 675,617 Class B Interests outstanding as of September ~~23, 2022.~~27, 2023.

⁽³⁾

As trustee of a family trust.

⁽⁴⁾

Of which 25,485.81 are held individually and the remainder is beneficially owned in an individual retirement account.

~~Table of Contents~~

~~Part III~~

~~Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters (Continued)~~

⁽⁵⁾

Of which 9,667.03 are held individually and the remainder is beneficially owned in an individual retirement account.

⁽⁶⁾

Of which 13,449.54 are held by a limited liability company of which Ms. Myrick is a member, 10,369.63 are held by a family trust of which Ms. Myrick is a beneficiary.

⁽⁷⁾

Held by a limited liability company, of which Ms. Myrick is a member.

⁽⁸⁾

Beneficially owned together with spouse.

The Trust does not have any compensation plans (including individual compensation arrangements) under which equity securities of the Trust are authorized for issuance.

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Part III

Item 13.

Certain Relationships and Related Transactions, and ~~Supervisory Board Member~~Director Independence

The Supervisory Board has chosen the director independence standards of the New York Stock Exchange (the “NYSE”) to determine the independence of the members of the Supervisory Board. The Trust is not, however, a company listed with the NYSE and does not intend to apply for listing with the NYSE. Furthermore, the Trust believes that, if it were a NYSE-listed company, the Supervisory Board would be exempt from the director independence requirements of the NYSE by reason of one or more available exemptions from such requirements, including exemptions for companies in bankruptcy proceedings, passive business organizations in the form of trusts, and the issuers of special purpose securities.

Applying the NYSE independence standard, the Supervisory Board has determined that all of its members other than Terry Goebel are independent. In making this determination, the Supervisory Board concluded that neither the fees paid by the Trust in respect of service on the Supervisory Board nor the ownership of Liquidation Trust Interests by any member of the Supervisory Board precluded a finding of independence.

The Supervisory Board was unable to determine the absence of a material relationship between the Wind-Down Group and Supervisory Board member Terry Goebel, who is president and a principal owner of G3 Group LA, a construction firm specializing in the development of high-end, luxury residences. G3 Group LA is owned by Terry Goebel and his son Kelly Goebel. The Wind-Down Group iswas under contract with G3 Group LA for the development of one residential real property in the Los Angeles area (the “G3 Contract”). The ~~approximate~~ aggregate ~~estimated~~ dollar value of the transactions under the completed G3 Contract as of June 30, ~~2022 is $35.7~~2023 was $35.5 million, all of which ~~$0.4 million~~ was ~~unpaid~~paid as of June 30, ~~2022.~~2023. The original contract value was $30.0 million. On September 24, 2020, the Wind-Down Group entered into a change order increasing the estimated dollar value of the G3 Contract by approximately $3.6 million. On October 15, 2021, the Wind-Down Group entered into a change order increasing the estimated dollar value of the G3 Contract by approximately $2.1 million. The change orders were determined to be necessary, and the amount thereof was determined to be appropriate, in light of increases in the construction costs of the project incurred and expected to be incurred. On April 13, 2023, the Wind-Down Group entered into a change order reducing the estimated dollar value of the G3 Contract by approximately $0.2 million. The change order was necessary based on project completion and close out of outstanding billings.

Michael I. Goldberg, the Liquidation Trustee, is a partner of Akerman LLP, a law firm based in Miami, Florida. In November 2019, the Trust entered into an arrangement with Akerman LLP with the prior approval of the Supervisory Board, including the Audit Committee. Under the arrangement, Akerman LLP from time to time will provide, at the option of the Trust on an as-needed basis, e-discovery and related litigation support services in connection with the Trust’s prosecution of the Causes of Action. “E-discovery” (also known as electronic discovery) refers to discovery in legal proceedings, including litigation, where the information sought, such as e-mails, documents, records and files, is in electronic format. E-discovery services assist litigants to manage potentially large amounts of data in compliance with the technical requirements of court rules designed to preserve metadata and prevent spoliation.

Under the arrangement, services available to the Trust include data processing, hosting, professional services, and forensic collection and analysis. The services are provided on a “stand-alone” basis (i.e., they are made available to the Trust regardless of whether Akerman LLP is representing the Trust in connection with the subject litigation or any litigation). Currently, Akerman LLP does not represent the Trust in connection with any Causes of Action or act as counsel to the Trust in any matter.

The Trust is charged for the services at scheduled rates per task which, depending on the specific task, include flat rates, rates based on the volume of data processed, rates based on the number of data users, the hourly rates of Akerman LLP personnel, or other rates. The scheduled rates are believed to be the same as those charged by Akerman LLP to clients utilizing its legal services generally. The Supervisory Board, including the Audit Committee, approved the arrangement after determining that Akerman LLP’s rates would be more favorable to the Trust than those proposed to be charged by at least one other major alternative provider of legal support services. Due to uncertainty regarding the number, length and complexity of cases and the volume of discoverable documents, the Trust currently is unable to estimate the aggregate approximate dollar value of either Akerman LLP’s fees under this arrangement or Mr. Goldberg’s interest in this arrangement. During the years ended June 30, 2023 and 2022, approximately $428,000 and ~~2021, approximately~~ $420,000, ~~and $385,000,~~ respectively, had been paid related to these services.

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Part III

Item 13.

Certain Relationships and Related Transactions, and Supervisory Board Member Independence (Continued)

On March 10, 2023, as a result of the failure of two large financial institutions, as a protective measure, the Company deposited the restricted cash relating to Forfeited Assets and distribution reserves into two separate Akerman LLP trust accounts for the benefit of the Company (the “Trust Accounts”). The balance deposited in these accounts was approximately $3,170,000 and $1,222,000, respectively. On April 5, 2023, the Company transferred approximately $25,000 relating to the distribution reserves and on May 11, 2023, the Company transferred the remaining balances in the Trust Accounts to one of the banking institutions with which it has a depositor relationship.

The Trust has a written Related Person Transaction Policy. It requires that any “Related Person Transaction” to which the Trust is a participant must be reviewed and approved in advance by the Supervisory Board and any “Related Person Transaction” to which the Wind-Down Group is a participant must be reviewed and approved in advance by the Board of Managers (the applicable board, in each instance, whether the Supervisory Board or the Board of Managers, the “Applicable Board”). Under the policy, a “Related Person Transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) that occurred since the beginning of the Trust’s most recent fiscal year in which the Trust (including any of its subsidiaries) was, is or will be a participant and the amount involved exceeds $120,000 and in which any Related Person had, has or will have a direct or indirect material interest. For purposes of this policy, a “Related Person” means:

any person who is, or at any time since the beginning of the Trust’s last fiscal year was, the Liquidation Trustee, a member of the Supervisory Board, a member of the Board of Managers, an executive officer of the Wind-Down Entity or a nominee to become a member of the Board of Managers or a more than 5% beneficial owner of the Trust;

any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the Liquidation Trustee, a member of the Board of Managers, an executive officer of the Wind-Down Entity, or a nominee to become a member of the Board of Managers, or a more than 5% beneficial owner of the Trust, and any person (other than domestic employees or tenants) sharing the household of any such person; and

any firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest.

The following transactions are not considered Related Person Transactions for purposes of this policy: (a) base compensation for services rendered as the Liquidation Trustee, paid in accordance with the Liquidation Trust Agreement; (b) compensation for services rendered as a member of the Supervisory Board, paid in accordance with the Liquidation Trust Agreement; (c) in accordance with the Liquidation Trust Agreement, reimbursement of expenses incurred by the Liquidation Trustee or any member of the Supervisory Board incurred in the ordinary course of carrying out their respective responsibilities in such capacities; (d) any transaction where the rates or charges involved in the transaction are determined by competitive bids; or (e) any transaction that involves the rendering of services at rates or charges fixed in conformity with law or governmental authority.

Furthermore, neither the G3 Contract nor the payment or performance by the Wind-Down Group of its obligations thereunder in accordance with the current terms thereof is considered a Related Person Transaction for purposes of the policy. The G3 Contract was entered into between the Debtors and G3 before the organization of the Trust and did not require any review, approval or ratification under the Related Person Transaction Policy. However, the change orders entered into on September 24, 2020, ~~and~~ October 15, 2021 and April 13, 2023 were reviewed under the Related Person Transaction Policy.

Under the policy, the Applicable Board is to consider all of the relevant facts and circumstances available, including (if applicable), but not limited to:

The benefits to the Trust and the Wind-Down Entity;

The impact on the independence of a member of the Supervisory Board or the Board of Managers in the event the Related Person is a member of the Supervisory Board, a member of the Board of Managers, an immediate family member of any such member, or an entity in which any such member is a director, officer, manager, principal, member, partner, shareholder or executive officer;

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Part III

Item 13.

Certain Relationships and Related Transactions, and Supervisory Board Member Independence (Continued)

The availability of other sources for comparable products or services;

The terms of the transaction; and

The terms available to unrelated third parties and employees generally.

~~Table of Contents~~

~~Part III~~

~~Item 13.~~

~~Certain Relationships and Related Transactions, and Supervisory Board Member Independence (Continued)~~

The policy prohibits any member of the Applicable Board from participating in any review, consideration or approval of any Related Person Transaction with respect to which such member or any of his or her immediate family members is the Related Person. The Applicable Board may approve only those Related Person Transactions that are in, or are not inconsistent with, the best interests of the Trust and its stakeholders, as the Applicable Board determines in good faith. In addition, no immediate family member of the Liquidation Trustee or any member of the Supervisory Board, member of the Board or Managers, or executive officer of the Wind-Down Group may be hired as an employee of the Trust or the Wind-Down Group unless the employment arrangement is approved in advance by the Applicable Board. In the event a person becomes a director or executive officer of the Trust or the Wind-Down Group and an immediate family member of such person is already an employee of the Trust or the Wind-Down Group, no material change in the terms of employment, including compensation, may be made without the prior approval of the Applicable Board (except, if the immediate family member is himself or herself an executive officer of the Trust or the Wind-Down Group, any proposed change in the terms of employment must be reviewed and approved in the same manner as other executive officer compensatory arrangements).

The Audit Committee of the Supervisory Board has the authority, subject to a final review by all disinterested members of the Supervisory Board, to review and approve all Related Person Transactions in which the Trust is a participant.

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Part III

Item 14.

Principal Accounting Fees and Services

Principal Independent Registered Public Accounting Firm Fees

Set forth below are aggregate fees for professional accounting services for the years ended June 30, ~~2022~~2023 and ~~2021:~~2022:

Years Ended June 30,
2022 2021

Audit Fees $ 280,800 $ 345,600
Audit-related Fees
-
-
Tax fees
-
-
All other fees
-
-
Total $ 280,800 $ 345,600

~~The professional fees incurred prior to November 1, 2020 were billed by Squar Milner and the professional fees incurred on or after November 1, 2020 were billed by Baker Tilly.~~

	Years Ended June 30,
	2023		2022

Audit fees	$	207,900	$	280,800
Audit-related fees		-		-
Tax fees		-		-
All other fees		-		-
Total	$	207,900	$	280,800

For purposes of the preceding table, the professional fees are classified as follows:

•

Audit ~~Fees~~Fees:: These fees for professional services performed for the audit of our annual consolidated financial statements, the required review of quarterly consolidated financial statements, registration statements and other procedures performed by independent auditors in order for them to be able to form an opinion on our consolidated financial statements.

•

Audit-Related ~~Fees~~Fees:: These are fees for assurance and related services that traditionally are performed by independent auditors that are reasonably related to the performance of the audit or review of the consolidated financial statements, such as due diligence related to acquisitions and dispositions, attestation services that are not required by statute or regulation, internal control reviews, and consultation concerning financial accounting and reporting standards.

•

Tax Fees: These are fees for all professional services performed by professional staff in our independent auditor’s tax division, except those services related to the audit of our consolidated financial statements. These include fees for tax compliance, tax planning, and tax advice, including federal, state, and local issues. Services may also include assistance with tax audits and appeals before the IRS and similar state and local agencies, as well as federal, state and local tax issues related to due diligence.

•

All Other ~~Fees~~Fees:: These are fees for any services not included in the above-described categories, including assistance with internal audit plans and risk assessments.

Pre-Approval Policies

In order to ensure that the provision of services by our independent registered public accounting firm does not impair the auditors’ independence, the Audit Committee pre-approves all auditing services performed for the Company by our independent auditors, as well as all permitted non-audit services. In determining whether or not to pre-approve services, the Audit Committee considers whether the service is a permissible service under the rules and regulations promulgated by the SEC.

All services rendered by Baker Tilly ~~and Squar Milner~~ for the years ended June 30, ~~2022~~2023 and ~~2021~~2022 were pre-approved by the Audit Committee in accordance with the policies and procedures described above.

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Part IV

Item 15.

Exhibits and Financial Statement Schedules

(1)	Consolidated Financial Statements

The consolidated financial statements of the Company are included in a separate section of this Annual Report commencing on the page numbers specified below:

Woodbridge Liquidation Trust and Subsidiaries

	Page
Index to Consolidated Financial Statements	F-1
Audited Consolidated Financial Statements As of and For the Years Ended June 30, ~~2022~~2023 and ~~2021:~~2022:
Report of Independent Registered Public Accounting Firm (PCAOB ID 23) 23)	F-2
Consolidated Statements of Net Assets in Liquidation as of June 30, ~~2022~~2023 and ~~2021~~2022	F-3
Consolidated Statements of Changes in Net Assets in Liquidation for the Years Ended June 30, ~~2022~~2023 and ~~2021~~2022	F-4
Notes to Consolidated Financial Statements	F-5

(2)	Financial Statement Schedules

Financial statement schedules have been omitted because they are either not required or not applicable, or because the information required to be presented is included in the consolidated financial statements or the notes thereto included in this Annual Report.

~~(b)~~(3)

Exhibits

Exhibit Number and Description

2.1	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.

3.1	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.

3.2	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.

3.3	Amendment No. 3 to Liquidation Trust Agreement dated as of November 1, 2019, incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019.

3.4	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.

3.5	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.

10.1	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.

~~Table of Contents~~


10.2	~~Amended and Restated Employment~~First Amendment to Limited Liability Agreement ~~dated July 31, 2019 between~~of Woodbridge Wind-Down Entity LLC ~~and Frederick Chin,~~dated November 30, 2022, incorporated herein by reference to the ~~Registration Statement~~Current Report on Form 108-K filed by the Trust on ~~October 25, 2019.~~December 1, 2022.

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Part IV

Item 15.

Exhibits and Financial Statement Schedules(Continued)

10.3	~~First~~Second Amendment to ~~Amended and Restated Employment~~Limited Liability Agreement ~~dated September 24, 2020 between~~of Woodbridge Wind-Down Entity LLC ~~and Frederick Chin,~~dated as of March 27, 2023, incorporated herein by reference to the Current Report on Form ~~10-K~~8-K filed by the Trust on ~~September 28, 2020.~~March 29, 2023.

10.4	~~Indemnification~~Third Amendment to Limited Liability Agreement ~~dated February 27, 2019 between~~of Woodbridge Wind-Down Entity LLC ~~and Frederick Chin,~~dated as of April 28, 2023, incorporated herein by reference to the ~~Registration Statement~~Current Report on Form 108-K filed by the Trust on ~~October 25, 2019.~~May 1, 2023.

10.5	Part-Time Employment Agreement dated September 1, 2022 between Woodbridge Wind-Down Entity LLC and Frederick Chin, incorporated herein by reference to the Form 8-K filed by the Trust on September 1, 2022.

~~10.6~~	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.

~~10.7~~10.6	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.

~~10.8~~10.7	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.

10. 8	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.

10.9	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.

10.10	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.

10.11	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.

10.12	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.

~~10.12~~10.13	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.

~~10.13~~10.14	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.

31.1*	Certification of Liquidation Trustee pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~Table of Contents~~


32.1*	Certification of Liquidation Trustee pursuant to 18 U.S.C. 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Table of Contents

Part IV

Item 15.

Exhibits and Financial Statement Schedules(Continued)

99.1	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.

101	The following financial statements from the Woodbridge Liquidation Trust ~~Quarterly~~Annual Report on Form 10-K for the year ended June 30, ~~2022,~~2023, formatted in eXtensible Business Reporting Language (XBRL): (i) ~~Consolidated Statements~~consolidated statements of ~~Net Assets~~net assets in ~~Liquidation~~liquidation as of June 30, 2023 and 2022, ~~and 2021,~~ (ii) ~~Consolidated Statements~~consolidated statements of ~~Changes~~changes in ~~Net Assets~~net assets in ~~Liquidation~~liquidation for the years ended June 30, ~~2022~~2023 and ~~2021,~~2022, (iii) the ~~Notes~~notes to the ~~Consolidated Financial Statements.~~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.

104	Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101).

*Filed herewith

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Table of Contents

Woodbridge Liquidation Trust and Subsidiaries

	Page
Index to Consolidated Financial Statements	F-1
Audited Consolidated Financial Statements As of and For the Years Ended June 30, ~~2022~~2023 and ~~2021:~~2022:
Report of Independent Registered Public Accounting Firm (PCAOB ID 23)	F-2
Consolidated Statements of Net Assets in Liquidation as of June 30, ~~2022~~2023 and ~~2021~~2022	F-3
Consolidated Statements of Changes in Net Assets in Liquidation for the Years Ended June 30, ~~2022~~2023 and ~~2021~~2022	F-4
Notes to Consolidated Financial Statements	F-5

F-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Supervisory Board and Liquidation Trustee of Woodbridge Liquidation Trust and Subsidiaries

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of net assets in liquidation of Woodbridge Liquidation Trust and ~~subsidiaries~~Subsidiaries (the Company) as of June 30, ~~2022~~2023 and ~~2021,~~2022, the related consolidated statements of changes in net assets in liquidation for the years ended June 30, ~~2022~~2023 and ~~2021,~~2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the net assets in liquidation of the Company as of June 30, ~~2022~~2023 and ~~2021,~~2022, and the changes in net assets in liquidation for the years ended June 30, ~~2022~~2023 and ~~2021,~~2022, in conformity with accounting principles generally accepted in the United States of America applied on the basis described below.

As described in Note 2, these consolidated financial statements have been prepared on the liquidation basis of accounting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Baker Tilly US, LLP

We have served as the Company’s auditors since 2019.

Irvine, California

September ~~23, 2022~~27, 2023

F-2

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

Woodbridge Liquidation Trust and Subsidiaries

Consolidated Statements of Net Assets in Liquidation

As of June 30, ~~2022~~2023 and ~~2021~~2022

($ in Thousands)

	6/30/2022		6/30/2021		6/30/2023		6/30/2022

Assets
Real estate assets held for sale, net (Note 3)	$	29,062	$	140,855	$	770	$	29,062
Cash and cash equivalents		96,810		45,369		25,704		96,810
Restricted cash (Note 4)		6,121		8,273		4,473		6,121
Other assets (Note 5)		5,825		5,473		2,645		5,825

Total assets	$	137,818	$	199,970	$	33,592	$	137,818

Liabilities
Accounts payable and accrued liabilities	$	119	$	160	$	37	$	119
Distributions payable		68,767		4,687		1,283		68,767
Accrued liquidation costs (Note 6)		34,537		65,583		25,499		34,537

Total liabilities	$	103,423	$	70,430	$	26,819	$	103,423

Commitments and Contingencies (Note 14)

Net Assets in Liquidation
Restricted for Qualifying Victims (Note 7)	$	3,485	$	3,167	$	3,491	$	3,485
All Interestholders		30,910		126,373		3,282		30,910

Total net assets in liquidation	$	34,395	$	129,540	$	6,773	$	34,395

See accompanying notes to consolidated financial statements.

F-3

Table of Contents

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 Years Ended June 30, ~~2022~~2023 and ~~2021~~2022

($ in Thousands)

	Year Ended June 30, 2022								Year Ended June 30, 2021								Year Ended June 30, 2023								Year Ended June 30, 2022
	Restricted								Restricted								Restricted								Restricted
	For Qualifying		All						For Qualifying		All						For Qualifying		All						For Qualifying		All
	Victims		Interestholders			Total			Victims		Interestholders			Total			Victims		Interestholders			Total			Victims		Interestholders			Total

Net Assets in Liquidation as of beginning of year	$	3,167	$	126,373		$	129,540		$	-	$	264,517		$	264,517
Net Assets in Liquidation as of beginning of period																	$	3,485	$	30,910		$	34,395		$	3,167	$	126,373		$	129,540

Change in assets and liabilities (Note 8):
Restricted for Qualifying Victims -
change in carrying value of assets and liabilities, net		318		-			318			3,167		-			3,167
Change in carrying value of assets and liabilities, net																		6		-			6			318		-			318

All Interestholders -
All Interestholders:
Change in carrying value of assets and liabilities, net		-		47,602			47,602			-		644			644			-		(5,197	)		(5,197	)		-		47,602			47,602
Distributions (declared) reversed, net		-		(143,065	)		(143,065	)		-		(138,788	)		(138,788	)		-		(22,431	)		(22,431	)		-		(143,065	)		(143,065	)
Net change in assets and liabilities		-		(95,463	)		(95,463	)		-		(138,144	)		(138,144	)		-		(27,628	)		(27,628	)		-		(95,463	)		(95,463	)

Net Assets in Liquidation as of end of year	$	3,485	$	30,910		$	34,395		$	3,167	$	126,373		$	129,540
Net Assets in Liquidation as of end of period																	$	3,491	$	3,282		$	6,773		$	3,485	$	30,910		$	34,395

See accompanying notes to consolidated financial statements.

F-4

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1.

Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, ~~2022~~2023 and ~~2021~~2022

1)	Formation, Organization and Description of Business

Formation

Woodbridge Liquidation Trust ~~(Trust)~~(the “Trust”) was established (i) for the purpose of collecting, administering, distributing and liquidating the Trust assets for the benefit of the Trust beneficiaries in accordance with the Liquidation Trust Agreement of the Trust and the First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and ~~Its~~its Affiliated Debtors dated August 22, 2018 (as amended, modified, supplemented or restated from time to ~~time;~~time, the ~~(Plan)~~“Plan”); (ii) to resolve disputed claims asserted against the Debtors; (iii) to litigate and/or settle causes of action ~~(Causes~~(“Causes of ~~Action)~~Action”); and (iv) to pay certain allowed claims and statutory fees, as required by the Plan. Woodbridge Group of Companies, LLC and its affiliated debtors are individually referred to herein as a Debtor and collectively as the Debtors. The Trust was formed on February 15, 2019 ~~(Plan~~(the “Plan Effective ~~Date)~~Date”) as a statutory trust under Delaware law.

On the Plan Effective Date, in accordance with the Plan, (a) the following assets automatically vested in the Trust: (i) an aggregate $5,000,000 in cash from the Debtors for the purpose of funding the Trust’s initial expenses of operation; (ii) certain claims and Causes of Action; (iii) all of the outstanding equity interests of the Wind-Down Entity (as defined below); and (iv) certain other non-real estate related assets, (b) the equity interests of Woodbridge Group of Companies, LLC and Woodbridge Mortgage Investment Fund 1, LLC (together, the ~~Remaining Debtors)~~“Remaining Debtors”) were cancelled and new equity interests representing all of the newly issued and outstanding equity interests in the Remaining Debtors were issued to the Trust, (c) all of the other Debtors other than the Remaining Debtors were dissolved and (d) the real estate-related assets of the Debtors were automatically vested in the Trust’s wholly-owned subsidiary, Woodbridge Wind-Down Entity LLC ~~(Wind-Down Entity)~~(the “Wind-Down Entity”) or one of the Wind-Down Entity’s 43 wholly-owned ~~single member LLCs (Wind-Down Subsidiaries)~~single-member limited liability companies (the “Wind-Down Subsidiaries”) formed to own the respective real estate assets. The Trust, the Remaining Debtors, the Wind-Down Entity and the Wind-Down Subsidiaries are collectively referred to herein as the ~~Company.~~“Company.”

As further discussed in Note 10, the Trust has two classes of liquidation trust ~~interests,~~interests: Class A Liquidation Trust Interests ~~(Class~~(the “Class A ~~Interests)~~Interests”) and Class B Liquidation Trust Interests ~~(Class~~(the “Class B ~~Interests)~~Interests”). The holders of Class A Interests and Class B Interests are collectively referred to as ~~All~~“All Interestholders.”

On December 24, 2019, the Trust’s Registration Statement on Form 10 became effective under the Securities Exchange Act of 1934 ~~(Exchange Act)~~(the “Exchange Act”). The trading symbol for the Trust’s Class A Interests is WBQNL. Bid and ~~ask~~asked prices for the Trust’s Class A Interests are quoted on the OTC Link^® ATS, the SEC-registered alternative trading system. The Class A Interests are eligible for the Depository Trust Company’s Direct Registration ~~(DRS) services. The Class B Interests are not registered with the SEC.~~System

Organization

The Trust does not have directors or executive officers. All of the management and executive authority of the Trust resides with the Liquidation Trustee, subject to the supervision of a six-member supervisory board. The Wind-Down Entity is separately managed by its ~~three-member~~ board of ~~managers, one of whom is the chief executive officer.~~managers.

The Liquidation Trust Interests are non-voting. The holders of the Class A Interests and the Class B Interests have the same rights, except with respect to certification, transferability and payment of distributions. See Note 11 regarding the priority and manner of distribution of available cash.

The Wind-Down Entity, from time to time, ~~will make~~makes distributions to the Trust, as available. The Trust ~~will~~ in turn ~~make~~makes distributions, from time to time, to the Trust beneficiaries, as available.

The Trust will be terminated upon the first to occur of (i) the making of all distributions required to be made and a determination by the Liquidation Trustee that the pursuit of additional causes of action held by the Trust is not justified or (ii) February 15, 2024. However, the ~~bankruptcy court~~Bankruptcy Court may approve an extension of the term if deemed necessary to facilitate or complete the recovery on, and liquidation of, the Trust assets.

During the year ended June 30, 2023, the Company concluded that its liquidation activities would not be completed by February 15, 2024, the current outside termination date of the Trust, for a number of reasons. First, there have been significant delays in certain legal proceedings where the Company is the plaintiff. Second, a construction defect claim has been asserted against one of the Wind-Down Subsidiaries by the buyer of one of the subsidiary’s single-family homes. The subsidiary has tendered the claim to its insurance carrier. At this time, the amount of the liability exposure, if any, has not been determined and it is not known if the subsidiary has any exposure in excess of its insurance coverage. The subsidiary is investigating the claim, including the extent and causes of the alleged damage and the identification of other potentially responsible persons. Based on the foregoing, the Company currently projects a revised estimated completion date for the Company’s operations of approximately March 31, 2026.

F-5

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

Pursuant to the Wind-Down Entity’s Limited Liability Company Agreement, the Wind-Down Entity shall dissolve upon the first to occur of the following: (i) the written consent of the Trust, (ii) the entry of a decree of judicial dissolution under Section 18-802 of the Delaware LLC Act and (iii) the sale or other disposition of all of the Wind-Down Assets.

~~F-5~~

~~Table of Contents~~

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

Description of Business

The Trust is prosecuting various Causes of Action acquired by the Trust pursuant to the Plan and is resolving claims asserted against the Debtors. As of June 30, ~~2022,~~2023, the Company is the plaintiff in several pending lawsuits. During the years ended June 30, ~~2022~~2023 and ~~2021,~~2022, the Company recorded settlement recoveries of approximately ~~$26,922,000~~$296,000 and ~~$9,839,000,~~$26,922,000, respectively, from the settlement of Causes of Action of which approximately ~~$24,815,000~~$0 and ~~$0,~~$24,815,000, respectively, was from Comerica Bank (see Note 13 for additional information). The Company also recorded liabilities of 5% of the settlement recoveries as amounts payable to the Liquidation Trustee. The Company has accrued an estimate of the amount of legal costs to be incurred to pursue this litigation, excluding contingent fees. As more fully discussed in Note 2, the Company’s consolidated financial statements do not include any estimate of future net recoveries from litigation and settlement, since the Company cannot reasonably estimate them.

The Wind-Down Entities’ operations are almost complete. As of June 30, ~~2022,~~2023, the Wind-Down Subsidiaries owned one ~~single-family home, located in Los Angeles, California. Construction~~performing secured loan and one parcel of ~~this single-family home was substantially complete, and it was listed~~real property (see Note 3 for sale. The Wind-Down Subsidiaries are completing the punch list items on three single-family homes they constructed. The Wind-Down Subsidiaries also own secured loans (performing and non-performing) and other properties located in other states.additional information).

The Company is required to liquidate its assets and distribute available cash to the Trust beneficiaries. The liquidation activities are carried out by the Trust, the Wind-Down Entity and the Wind-Down Subsidiaries. As of June 30, ~~2022,~~2023, the Company estimates that the liquidation activities will be completed by ~~February 15, 2024. As discussed in~~March 31, 2026 (see Note ~~2, the Company uses the Liquidation Basis of Accounting.~~6 for additional information). The Company currently operates as one reportable segment with activities comprised primarily of real estate assets held for sale.

As more fully discussed in Note 2, the Company uses the Liquidation Basis of Accounting. Net assets in liquidation represent the remaining estimated aggregate value available to Trust beneficiaries upon liquidation, with no discount for the timing of proceeds (undiscounted). Due to the unpredictability of real estate selling prices, the impact of the COVID-19 virus and other global health crises (see below), as well as the uncertainty in the timing of liquidation of the real estate and other assets, netNet liquidation proceeds, other recoveries and actual liquidation costs may differ materially from the estimated ~~amounts.~~amounts due to the uncertainty in the timing of completing the liquidation activities.

The Trust’s expectations about the amount of any additional distributions and when they will be paid are subject to risks and uncertainties and are based on certain estimates and assumptions, one or more of which may prove to be incorrect. As a result, the actual amount of any additional distributions may differ materially, perhaps in adverse ways, from the Trust estimates. Furthermore, it is not possible to predict the timing of any additional distributions and any such distributions may not be made within the timing referenced in the consolidated financial statements. See Note 15 for information relating to the suspension of distributions.

No assurance can be given that total distributions will equal or exceed the estimate of net assets in liquidation presented in the consolidated statements of net assets in liquidation.

The Company observes health and safety guidelines, including allowing its employees to work remotely. The Company will continue to evaluate the impact of the COVID-19 virus and other global health crises on its activities, including the cost of construction, the timing of completion of the single-family homes that are under construction, the time needed to market and sell its remaining real estate assets and the price at which these real estate assets will be sold.

F-6

Table of Contents

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

~~The ultimate impact~~PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of ~~the COVID-19 virus~~June 30, 2023 and ~~other global health crises will depend on many factors, some of which cannot be foreseen, including the duration, severity, and geographic concentrations of the pandemic.~~2022 (Continued)

2)	Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles ~~(U.S. GAAP)~~(“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission ~~(SEC)~~(the “SEC”). These consolidated financial statements have been presented in accordance with Accounting Standards Codification ~~(ASC)~~(“ASC”) Subtopic 205-30, “Liquidation Basis of Accounting,” as amended by Accounting Standards Update ~~(ASU)~~(“ASU”) No. 2013-07, “Presentation of Financial Statements (Topic 205), Liquidation Basis of Accounting.”

All material intercompany accounts and transactions have been eliminated.

Use of Estimates

U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and for the period then ended. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically, and the carrying amounts of assets and liabilities are revised in the period that available information supports a change in the carrying amount.

Liquidation Basis of Accounting

Under ~~the Liquidation Basis~~liquidation basis of ~~Accounting,~~accounting, all assets are recorded at their estimated net realizable value or liquidation value, which represents the estimated amount of net cash that will be received upon the disposition of the assets (on an undiscounted basis). The measurement of real estate assets held for sale is based on current contracts (if any), if contingencies have been removed, estimates and other indications of sales value, net of estimated selling costs. To determine the value of real estate assets held for sale, the Company considered the three traditional approaches to value (cost, income and sales comparison) commonly used by the real estate appraisal community. The applicability and relevancy of each valuation approach as applied may differ by asset. In most cases, the sales comparison approach was accorded the greatest weight. This approach compares a property to other properties with similar characteristics that have recently sold. To validate management’s estimate, the Company also ~~considers~~considered opinions from qualified real estate professionals and local real estate brokers and, in some cases, obtained third party appraisals. The estimated selling costs ~~range from~~for the remaining real estate parcel are 5.0% ~~to 6.5%.~~of the property sales price, including sales commissions, transfer taxes and other costs.

Liabilities, including estimated costs associated with implementing and completing the Plan, are measured in accordance with U.S. GAAP that otherwise applies to those liabilities. The Company has ~~also~~ recorded ~~the~~ estimated development costs such as costs to be incurred to prepare the assets for sale, ~~as well as the~~estimated reserves for contingent liabilities including potential construction defect claims, estimated holding costs to be incurred until the projected sale date and the estimated general and administrative costs to be incurred until the completion of the liquidation of the Company. When estimating development costs, the Company considered third party construction contracts and estimates of costs to complete based on construction status, progress and projected completion timing. Estimated development costs also include the costs of design and furnishings necessary to prepare and stage the homes for marketing as well as an accrual for ~~warranty~~potential construction defect claims. Holding cost estimates consider property taxes, insurance, utilities, maintenance and other costs to be incurred until the sale of the property is closed. Projected general and administrative cost estimates take into account operating costs through the completion of the liquidation of the ~~Company.~~

~~F-7~~

~~Table~~Company currently estimated to be March 31, 2026 and an accrual for the administration of ~~Contents~~

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

construction defect claims.

These estimated amounts are presented in the accompanying consolidated statements of net assets in liquidation. All changes in the estimated liquidation value of the Company’s real estate held for sale, or other assets and liabilities are reflected as a change to the Company’s net assets in liquidation.

F-7

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

The Company ~~has~~does not ~~recorded~~record any amount from the future settlement of ~~Unresolved~~unresolved Causes of Action ~~or recoveries from Fair Fund or Forfeited Assets~~ in the accompanying consolidated financial statements ~~since they cannot be~~until an agreement is executed, final court approval is received and collectability is reasonably ~~estimated.~~assured. The amount recovered may be material to the Company’s net assets in liquidation.

On a quarterly basis, the Company reviews the estimated net realizable values, liquidation costs and the estimated date of the completion of the liquidation of the Company and records any significant changes. The Company will also revalue an asset when it is under contract for sale and the buyer’s contingencies have been removed. During the period when this occurs, the carrying value of the asset and the estimated closing and other costs will be adjusted, if necessary. If the Company has a change in its plan for the disposition of an asset, the carrying value will be adjusted to reflect this change in the period that the change is approved. The change in value may include the accrued liquidation costs related to the asset.

Other Assets

The Company recognizes recoveries from the settlement of ~~Unresolved~~unresolved Causes of Action when an agreement is executed, final court approval is received and collectability is reasonably assured. An allowance for uncollectible settlement installment receivables is recorded when there is doubt about the collectability of the receivable. ~~Insurance claims are recognized when the insurance company accepts the claim or if a claim is pending and the recoverable amount can be estimated.~~ The Company records escrow receivables at the amount that is expected to be received when the escrow receivable is released. The Forfeited Assets (Note 7) received from the United States Department of Justice ~~(DOJ)~~(the “DOJ”), other than cash, have been recorded at their estimated net realizable value. The Company accrues expected interest earnings when it can reasonably estimate the amount to be received.

In addition, the Company recognizes other amounts to be received based on contractual terms or when the amounts to be received are certain.

Accrued Liquidation Costs

The Company accrues for estimated liquidation costs to the extent they are reasonably determinable. These costs consist of (a) estimated development costs of the single-family homes, including construction and other ~~project-related~~project related costs, architectural and engineering, project management, city fees, bond payments (net of refunds), furnishings, marketing, estimated reserves for contingent liabilities including potential construction defect claims and other costs; (b) estimated holding costs, including property taxes, insurance, maintenance, utilities and other; and (c) estimated general and administrative costs including payroll, legal and other professional fees, trustee and board fees, rent and other office related expenses, and other general and administrative costs to operate the ~~Company.~~Company and the administration of construction defect claims.

Cash Equivalents

The Company considers short-term investments that have a maturity date of ninety days or less at the time of investment to be a cash equivalent. ~~The Company’s cash equivalents include money market savings deposits and money market funds.~~

Restricted Cash

Restricted cash includes cash that can only be used for certain specified ~~purposes.~~

~~F-8~~

~~Table of Contents~~

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

purposes as described in Note 4.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and restricted ~~cash. At times,~~cash, which are held as deposits in several financial institutions. The deposit balances in any one financial institution may exceed the Federal Deposit Insurance Corporation (the “FDIC”) insurance limits. The Company mitigates this risk by ~~depositing its cash, cash equivalents and restricted cash in high-credit quality financial institutions. In addition, the Company uses strategies~~using sweep accounts to reduce ~~deposits~~deposit balances at any one financial institution consistent with FDIC insurance limits.

F-8

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

Income Taxes

The Trust is intended to be treated as a grantor trust for income tax purposes and, accordingly, is not subject to federal or state income tax on any income earned or gain recognized by the Trust. The Trust’s beneficiaries will be treated as the owner of a ~~pro-rata~~pro rata portion of each asset, including cash and each liability received by and held by the Trust. Each beneficiary will be required to report on his or her federal and state income tax return his or her ~~pro-rata~~pro rata share of taxable income, including gains and losses recognized by the Trust. Accordingly, there is no provision for federal or state income taxes recorded in the accompanying consolidated financial statements.

The Company regularly analyzes its various federal and state filing positions and only recognizes the income tax effect in the consolidated financial statements when certain criteria regarding uncertain income tax positions have been met. The Company believes that its income tax positions would more likely than not be sustained upon examination by all relevant taxing authorities. Therefore, no provision for uncertain income tax positions has been recorded in the consolidated financial statements.

Net Assets in Liquidation - Restricted for Qualifying Victims

The Company separately presents the portion of net assets in liquidation that are restricted for Qualifying Victims (Note 7) from the net assets in liquidation that are available to All Interestholders.

3)	Real Estate Assets Held for Sale, Net

The Company’s real estate assets held for sale as of June 30, ~~2022~~2023 and ~~2021,~~2022, are as follows ($ in thousands):

June 30, 2022 June 30, 2021

Number
of Assets
Gross Value
Closing and
Other Costs
Net Value
Number
of Assets
Gross Value
Closing and
Other Costs
Net Value

Single-family homes 1 $ 28,000
$
(1,680
)
$ 26,320 7 $ 146,750 $ (8,805 ) $ 137,945

Other real estate assets:
Secured loans 2 972
(40
)
932 4 1,945 (87 ) 1,858
Other properties 2 2,000 (190 ) 1,810 2 1,107 (55 ) 1,052
Subtotal 4 2,972 (230 ) 2,742 6 3,052 (142 ) 2,910

Total 5 $ 30,972 $ (1,910 ) $ 29,062 13 $ 149,802 $ (8,947 ) $ 140,855

~~F-9~~

~~Table of Contents~~

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

	June 30, 2023									June 30, 2022

	Number of Assets		Gross Value		Closing and Other Costs			Net Value		Number of Assets		Gross Value		Closing and Other Costs			Net Value

Single-family homes		0	$	-	$	-		$	-		1	$	28,000	$	(1,680	)	$	26,320

Other real estate assets:
Secured loans		1		295		-			295		2		972		(40	)		932
Other properties		1		500		(25	)		475		2		2,000		(190	)		1,810
Subtotal		2		795		(25	)		770		4		2,972		(230	)		2,742

Total		2	$	795	$	(25	)	$	770		5	$	30,972	$	(1,910	)	$	29,062

As of June 30, ~~2022,~~2023, the ~~single-family home was listed for sale~~performing loan is secured by a property located in the state of Ohio and the parcel of real property is located in the ~~Los Angeles, California area. The loans are~~state of Hawaii. A transaction for the sale of the property located in Hawaii is currently pending.

During the year ended June 30, 2023, the Company sold one single-family home, sold one other property, and settled one secured ~~by properties located primarily~~loan for approximately $26,958,000 in the ~~eastern United States. The other properties are located in the states of Hawaii and New York.~~

aggregate. During the year ended June 30, 2022, the Company sold six single-family homes and settled two secured loans for ~~net proceeds~~approximately $131,716,000.

F-9

Table of ~~approximately $131,716,000. During the year ended~~Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, ~~2021, the Company sold six single-family homes, two lots~~2023 and ~~eleven other properties for net proceeds of approximately $134,159,000.~~2022 (Continued)

4)	Restricted Cash

The Company’s restricted cash as of June 30, ~~2022~~2023 and ~~2021,~~2022, is as follows ($ in thousands):

	June 30, 2022		June 30, 2021		June 30, 2023		June 30, 2022

Forfeited Assets (Note 7)					$	3,190	$	2,395
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	$	3,726	$	4,687		1,283		3,726
Forfeited Assets (Note 7)		2,395		1,836
Interest reserve (Note 9)		-		1,750
Total restricted cash	$	6,121	$	8,273	$	4,473	$	6,121

5)	Other Assets

The Company’s other assets as of June 30, ~~2022~~2023 and ~~2021,~~2022, are as follows ($ in thousands):

	June 30, 2022		June 30, 2021		June 30, 2023		June 30, 2022

Escrow receivables^(a)	$	3,420	$	2,500
Forfeited Assets (Note 7)		1,258		1,549
Forfeited Assets (Note 7)^(a)					$	435	$	1,258
Settlement installment receivables, net ^(b)		756		1,014		254		756
Accrued interest^(a)						1,574		-
Escrow receivables ^(c)						150		3,420
Other		391		410		232		391
Total other assets	$	5,825	$	5,473	$	2,645	$	5,825

(a)

During the quarter ended June 30, 2023, the Company accrued approximately $1,636,000 of interest earnings. This is the amount that the Company estimates that it will earn on its cash on deposit at June 30, 2023 during the period from July 1, 2023 through March 31, 2026, the current estimated completion date for the Company’s operations. Of the accrued interest at June 30, 2023, approximately $62,000 relates Forfeited Assets and the remainder of approximately $1,574,000 relates to All Interestholders

(b)	The allowance for uncollectible settlement installment receivables was approximately $63,000 and $7,000 as of June 30, 2023 and 2022, respectively.

(c)

Escrow receivables as of June 30, 2023 relates to one single-family home that was sold during the year ended June 30, 2023. Escrow receivables as of June 30, 2022 relate to two single-family homes that were sold during the year ended June 30, 2022 and ~~one single-family home sold prior to June 30, 2021. Escrow receivables as of June 30, 2021 relates to~~ one single-family home that was sold prior to June 30, 2021. Amounts are to be released upon completion of punch list items and/or obtaining a certificate of occupancy. ~~See Note 15~~In some cases, escrow receivable amounts may be used to pay for ~~additional information.~~the cost of completing punch list items.

~~(b)~~

~~The allowance for uncollectible settlement installment receivables was approximately $7,000 and $9,000 as of June 30, 2022 and 2021, respectively.~~

F-10

Table of Contents

~~PART I.~~PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

6)	Accrued Liquidation Costs

The following is a summary of accrued liquidation costs as of June 30, ~~2022~~2023 and ~~2021~~2022 ($ in thousands):

	June 30, 2022			June 30, 2021			June 30, 2023			June 30, 2022
Development costs:
Construction warranty							$	4,553		$	4,184
Construction costs	$	4,331		$	23,480			261			4,331
Construction warranty		4,184			2,870
Indirect costs		170			712			20			170
Bond refunds		(506	)		(1,134	)		(87	)		(506	)
Total development costs		8,179			25,928			4,747			8,179

Holding costs:
Property tax		771			1,901
Property taxes								8			771
Maintenance, utilities and other								2			428
Insurance		388			1,291			-			388
Maintenance, utilities and other		428			1,000
Total holding costs		1,587			4,192			10			1,587

General and administrative costs:
Legal and other professional fees		12,377			17,697			13,308			12,377
Directors and officers insurance								3,442			2,508
Payroll and payroll-related		7,989			10,432			2,757			7,989
Directors and officers insurance		2,508			2,576
Board fees and expenses		630			1,558			742			630
State, local and other taxes		331			2,217			133			331
Other		936			983			360			936
Total general and administrative costs		24,771			35,463			20,742			24,771

Total accrued liquidation costs	$	34,537	��	$	65,583		$	25,499		$	34,537

~~As of~~During the year ended June 30, ~~2022,~~2023, the Company ~~estimates~~concluded that its liquidation activities ~~will~~would not be completed by February 15, ~~2024.~~
2024, the current outside termination date of the Trust. In addition to significant delays in certain legal proceedings brought by the Company, a construction defect claim has been asserted against a subsidiary of the Company by the buyer of one of the subsidiary’s single-family homes (see Note 14 for additional information). The Company currently projects a revised estimated completion date for the Company’s operations of approximately March 31, 2026.

~~In the fourth quarter~~The change of the ~~year ended June 30, 2021,~~estimated completion date of the ~~Company determined that additional time may be needed to resolve its various Unresolved Causes of Action. An analysis was completed and the Company concluded that~~Company’s liquidation activities resulted in an additional ~~year would be needed to carry out the Company’s liquidating activities. As a result, the Company~~accrual of accrued liquidation costs of approximately ~~$12,952,000 of~~$7.7 million. The additional ~~general and administrative costs. The~~ costs are primarily legal and other professional fees and payroll and payroll-related ~~directors’~~costs. A portion of the accrued liquidation costs relate to estimated reserves for contingent liabilities including potential construction defect claims and ~~officers’ insurance~~the administration of such claims after the Company’s liquidation activities are completed.

The Company is required to file a motion with the Bankruptcy Court to extend the termination date of the Trust beyond February 15, 2024. The motion is required to be filed within six months before February 15, 2024. The Company expects that the motion will be filed as required and ~~board fees~~that the Bankruptcy Court will grant the motion as the extension is needed to pursue additional Trust actions that are expected to yield additional proceeds to the Trust and ~~expenses.~~to address the construction defect claim.

F-11

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

7)	Forfeited Assets - Restricted for Qualifying Victims

The Trust entered into a resolution agreement with the DOJ which provided that the Trust would receive the assets forfeited ~~(Forfeited Assets)~~(“Forfeited Assets”) by Robert and Jeri Shapiro. ~~The Bankruptcy Court approved the settlement on September 17, 2020 and the District Court approved the settlement on October 1, 2020.~~

~~F-11~~

~~Table of Contents~~

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

The agreement provided for the release of specified Forfeited Assets by the DOJ to the Trust and for the Trust to liquidate those assets and distribute the net sale proceeds to Qualifying Victims. Qualifying Victims include the vast majority of Trust beneficiaries (specifically, all former holders of allowed Class 3 and 5 claims and their permitted assigns), but do not include former holders of Class 4 claims. Distributions to Qualifying Victims are to be allocated pro-rata based on their net allowed claims without considering the (i) 5% enhancement for contributing their causes of action and (ii) 72.5% Class 5 coefficient.

In March 2021, the Trust received certain Forfeited Assets from the DOJ, including cash, wine, jewelry, handbags, clothing, shoes, art, gold, an automobile and other assets. The Company recorded the total estimated net realizable value of the Forfeited Assets of approximately $3,459,000. During the year ended June 30, 2023, the Company sold the automobile, jewelry, handbags, clothing, shoes and art. During the year ended June 30, 2022, the Company sold ~~the~~ wine, ~~and~~ gold, ~~and some of the~~ handbags, clothing and shoes. The Forfeited Assets included in the Company’s June 30, ~~2022~~2023 and ~~2021~~2022 consolidated financial statements are as follows ($ in thousands) (unaudited):

	June 30, 2022			June 30, 2021			June 30, 2023			June 30, 2022

Restricted cash (Note 4)	$	2,395		$	1,836		$	3,190		$	2,395
Other assets (Note 5)		1,258			1,549			435			1,258
Accrued liquidation costs - primarily legal and other professional fees		(168	)		(218	)
Accounts payable and accrued liabilities								(6	)		-
Accrued liquidation costs - primarily legal and professional fees								(128	)		(168	)
Net assets in liquidation - restricted for Qualifying Victims	$	3,485		$	3,167		$	3,491		$	3,485

On February 7, 2023, the Trust was informed that the DOJ had received additional Forfeited Assets from a co-defendant of Robert Shapiro and that the DOJ proposes to transfer these Forfeited Assets to the Trust. The Trust has not yet entered into an agreement with the DOJ for the transfer of any additional Forfeited Assets. It is expected that the proceeds from any additional Forfeited Assets would be distributed to Qualifying Victims. At this time, the Trust is unable to estimate the amount or timing of the transfer of any such Forfeited Assets.

F-12

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

8)	Net Change in Assets and Liabilities

Restricted for Qualifying Victims

The following is a summary of the change in the carrying value of assets and liabilities, net during the year ended June 30, ~~2022~~2023 ($ in thousands):

	Cash			Remeasure-					Cash			Remeasure-
	Activities			ment		Total			Activities			ment		Total

Real estate assets, net	$	-		$	-	$	-
Real estate assets held for sale, net									$	-		$	-	$	-
Cash and cash equivalents		-			-		-			-			-		-
Restricted cash		559			-		559			795			-		795
Other assets		(609	)		318		(291	)		(831	)		8		(823	)
Total assets	$	(50	)	$	318	$	268		$	(36	)	$	8	$	(28	)

Accounts payable and accrued liabilities	$	-		$	-	$	-		$	-		$	6	$	6
Accrued liquidation costs		(50	)		-		(50	)		(40	)		-		(40	)
Total liabilities	$	(50	)	$	-	$	(50	)	$	(40	)	$	6	$	(34	)

Change in carrying value of assets and liabilities, net	$	-		$	318	$	318		$	4		$	2	$	6

~~F-12~~

~~Table of Contents~~

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

The following is a summary of the change in the carrying value of assets and liabilities, net during the year ended June 30, ~~2021~~2022 ($ in thousands):

	Cash		Remeasure-				Cash			Remeasure-
	Activities		ment		Total		Activities			ment		Total

Real estate assets, net	$	-	$	-	$	-
Real estate assets held for sale, net							$	-		$	-	$	-
Cash and cash equivalents		-		-		-		-			-		-
Restricted cash		1,836		-		1,836		559			-		559
Other assets		-		1,549		1,549		(609	)		318		(291	)
Total assets	$	1,836	$	1,549	$	3,385	$	(50	)	$	318	$	268

Accounts payable and accrued liabilities	$	-	$	-	$	-	$	-		$	-	$	-
Accrued liquidation costs		-		218		218		(50	)		-		(50	)
Total liabilities	$	-	$	218	$	218	$	(50	)	$	-	$	(50	)

Change in carrying value of assets and liabilities, net	$	1,836	$	1,331	$	3,167	$	-		$	318	$	318

F-13

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

All Interestholders

The following provides details of the change in carrying value of assets and liabilities, net during the year ended June 30, 2023 ($ in thousands):

	Cash			Remeasure-
	Activities			ment			Total

Real estate assets held for sale, net	$	(26,999	)	$	(1,293	)	$	(28,292	)
Cash and cash equivalents		16,352			-			16,352
Restricted cash		14			-			14
Other assets		(4,000	)		1,643			(2,357	)
Total assets	$	(14,633	)	$	350		$	(14,283	)

Accounts payable and accrued liabilities	$	(645	)	$	557		$	(88	)
Accrued liquidation costs		(15,246	)		6,248			(8,998	)
Total liabilities	$	(15,891	)	$	6,805		$	(9,086	)

Change in carrying value of assets and liabilities, net	$	1,258		$	(6,455	)	$	(5,197	)

The following provides details of the distributions declared, net during the year ended June 30, 2023 ($ in thousands):

Distributions declared	$	(25,033	)
Distributions reversed		2,602
Distributions (declared) reversed, net	$	(22,431	)

Distributions payable decreased during the year ended June 30, 2023 by approximately $67,484,000.

The following provides details of the change in carrying value of assets and liabilities, net during the year ended June 30, 2022 ($ in thousands):

	Cash			Remeasure-					Cash			Remeasure-
	Activities			ment		Total			Activities			ment			Total

Real estate assets, net	$	(131,761	)	$	19,968	$	(111,793	)
Real estate assets held for sale, net									$	(131,761	)	$	19,968		$	(111,793	)
Cash and cash equivalents		129,465			-		129,465			129,465			-			129,465
Restricted cash		(1,750	)		-		(1,750	)		(1,750	)		-			(1,750	)
Other assets		(26,535	)		27,178		643			(26,535	)		27,178			643
Total assets	$	(30,581	)	$	47,146	$	16,565		$	(30,581	)	$	47,146		$	16,565

Accounts payable and accrued liabilities	$	(1,425	)	$	1,384	$	(41	)	$	(1,425	)	$	1,384		$	(41	)
Accrued liquidation costs		(30,856	)		(140)		(30,996	)		(30,856	)		(140	)		(30,996	)
Total liabilities	$	(32,281	)	$	1,244	$	(31,037	)	$	(32,281	)	$	1,244		$	(31,037	)

Change in carrying value of assets and liabilities, net	$	1,700		$	45,902	$	47,602		$	1,700		$	45,902		$	47,602

~~F-13~~

F-14

Table of Contents

~~PART I.~~PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

The following provides details of the distributions declared, net during the year ended June 30, 2022 ($ in thousands):

Distributions declared	$	(145,040	)	$	(145,040	)
Distributions reversed		1,975			1,975
Distributions declared, net	$	(143,065	)
Distributions (declared) reversed, net				$	(143,065	)

Distributions payable increased ~~by approximately $64,080,000~~ during the year ended June 30, ~~2022.~~

~~The following provides details of the change in carrying value of assets and liabilities, net during the year ended June 30, 2021 ($ in thousands):~~

Cash Remeasure-
Activities ment Total

Real estate assets, net $ (134,196 ) $ (14,286 ) $ (148,482 )
Cash and cash equivalents 95,105 - 95,105
Restricted cash 1,680 - 1,680
Other assets (2,898 ) 2,698 (200 )
Total assets $ (40,309 ) $ (11,588 ) $ (51,897 )

Accounts payable and accrued liabilities $ (615 ) $ 160 $ (455 )
Accrued liquidation costs (49,760 ) (2,326 ) (52,086 )
Total liabilities $ (50,375 ) $ (2,166 ) $ (52,541 )

Change in carrying value of assets and liabilities, net $ 10,066 $ (9,422 ) $ 644

~~The following provides details of the distributions declared, net during the year ended June 30, 2021 ($ in thousands):~~

Distributions declared $ (139,956 )
Distributions reversed 1,168
Distributions declared, net $ (138,788 )

~~Distributions payable increased~~2022 by approximately ~~$2,319,000 during the year ended June 30, 2021.~~$64,080,000.

~~F-14~~

~~Table of Contents~~

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

9)	Credit Agreements

Revolving Line of Credit

On June 19, 2020, two wholly-owned subsidiaries of the Wind-Down Entity entered into a $25,000,000 revolving line of credit (LOC) with a financial institution. The LOC matured on June 19, 2022, but may be extended for ~~one~~ additional year thereafter. The LOC required the borrowers to establish an interest reserve of $1,750,000 (Note 4), which was to be used to pay the potential monthly interest payments. Outstanding borrowings bear interest at a fixed rate of 3.50% per annum. Indebtedness under the LOC was secured by a deed of trust on one property, the personal property associated therewith and the interest reserve. The Wind-Down Entity was the guarantor of the LOC. The Company was required to keep a cash balance of $20,000,000 on deposit with the lender in order to avoid a non-compliance fee of 2% of the shortfall in the required deposit and was required to comply with various covenants.

The property that was collateral for the LOC was sold in December 2020. The LOC agreement provided that the borrower had 60 days after the sale of the collateral to add borrower(s) and additional property(ies) as collateral. During the 60-day period, the available borrowings under the LOC were reduced to $100,000. On February 11, 2021, the LOC was amended. Two additional wholly-owned subsidiaries of the Wind-Down Entity were joined to the LOC as co-borrowers and two properties were added as replacement collateral as allowed for in the original agreement. As a result of this amendment, the available borrowing commitment was adjusted back up to $25,000,000. The maturity date of the LOC was changed to January 31, 2023 with an option to extend for ~~one~~ ~~additional year, subject to the availability of collateral. There were no other significant changes to the LOC.~~

does not currently have any outstanding credit agreements. On May 16, 2022, the ~~LOC was~~Company terminated byits prior credit agreement. Also, the ~~Wind-Down Entity through~~Company never had outstanding borrowings on its ~~two wholly-owned subsidiaries.~~

~~PPP Loan~~

~~On April 20, 2020, the Wind-Down Entity obtained unsecured~~ credit in the form of a loan under the federal government’s Paycheck Protection Program (PPP) in the amount of $324,700. The loan accrued interest at a rate of 1.00% per annum. The loan had a maturity date of April 20, 2022.

The Company expected to have 100% of the loan balance forgiven and therefore no amounts were accrued under the liquidation basis of accounting as of June 30, 2020. On February 16, 2021, the PPP loan and the related interest were forgiven.agreement.

F-15

Table of Contents

~~PART I.~~PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

10)	Beneficial Interests

The following table summarizes the Liquidation Trust Interests (rounded) for the years ended June 30, ~~2022~~2023 and ~~2021:~~2022:

Year ended June 30, 2022 Year ended June 30, 2021
Liquidation Trust Interests Class A Class B Class A Class B

Outstanding at beginning of year

11,512,855

675,784

11,518,232
675,558
Allowed claims 4,976 - 11,967 1,133
5% enhancement for certain allowed claims
- - 182 56
Settlement of claims by cancelling Liquidation Trust Interests (4,296 ) (167) (17,526 ) (963 )
Outstanding at end of year 11,513,535 675,617 11,512,855 675,784

	For the Year Ended June 30, 2023					For the Year Ended June 30, 2022
Liquidation Trust Interests	Class A			Class B		Class A			Class B

Outstanding at beginning of year		11,513,535			675,617		11,512,855			675,784
Allowed claims		2,881			-		4,976			-
5% enhancement for certain allowed claims		144			-		-			-
Settlement of claims by cancelling Liquidation Trust Interests		(760	)		-		(4,296	)		(167	)
Outstanding at end of year		11,515,800			675,617		11,513,535			675,617

Of the ~~11,513,535~~11,515,800 Class A Interests outstanding as of June 30, ~~2022, 11,433,802~~2023, 11,435,913 are held by Qualifying Victims (Note 7).

At the Plan Effective Date, certain claims were disputed. As the claims are resolved, additional Class A Interests and (if applicable) Class B Interests are issued on account of allowed claims and no Class A Interests or (if applicable) Class B Interests are issued on account of disallowed claims. The following table summarizes the Trust’s unresolved claims against the Debtors as they relate to Liquidation Trust Interests (rounded) for the years ended June 30, ~~2022~~2023 and ~~2021:~~2022:

	Year ended June 30, 2022						Year ended June 30, 2021						For the Year Ended June 30, 2023					For the Year Ended June 30, 2022
Liquidation Trust Interests	Class A			Class B			Class A			Class B			Class A			Class B		Class A			Class B

Reserved for unresolved claims at beginning of year		124,609			5,011			193,559			7,118			90,793			333		124,609			5,011
Allowed claims		(4,976	)		-			(11,967	)		(1,133	)		(1,348	)		-		(4,976	)		-
5% enhancement for certain allowed claims		-			-			(32	)		-			-			-		-			-
Disallowed claims		(28,840	)		(4,678	)		(56,951	)		(974	)		(75,570	)		-		(28,840	)		(4,678	)
Reserved for unresolved claims at end of year		90,793			333			124,609			5,011			13,875			333		90,793			333

Of the ~~90,793~~13,875 Class A Interests relating to unresolved claims as of June 30, ~~2021, 3,601 would be held by~~2023, 1,880 were for Qualifying Victims (Note 7).

11)	Distributions

The Plan provides for a distribution waterfall that specifies the priority and manner of distribution of available cash to all Interestholders, excluding distributions of the net sales proceeds from Forfeited Assets (Note 7). Distributions are to be made (a) to the Class A Interests until they have received distributions of $75.00 per Class A Interest; thereafter (b) to the Class B Interests until they have received distributions of $75.00 per Class B Interest; thereafter (c) to each Liquidation Trust Interest (whether a Class A Interest or Class B Interest) until the aggregate of all distributions made pursuant to this clause equals an amount equivalent to interest, at a per annum fixed rate of 10%, compounded annually, accrued on the aggregate principal amount of all Net Note Claims, Allowed General Unsecured Claims and Net Unit Claims, all as defined in the Plan, treating each distribution pursuant to (a) and (b) above as reductions of such principal amount; and thereafter (d) to the holders of Allowed Subordinated Claims, as defined in the Plan, until such claims are paid in full, including interest, at a per annum fixed rate of 10% or such higher rate as may be agreed to, as provided for in the Plan, compounded annually, accrued on the principal amount of each Allowed Subordinated Claim, as defined.

F-16

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

~~The following~~One distribution was declared and two distributions were paid during the year ended June 30, 2023, and three distributions were declared and two distributions were paid during the ~~years~~year ended June 30, 2022 ~~and 2021~~ ($ in millions, except for $ per Class A Interest):

				Year ended June 30, 2022						Year ended June 30, 2021										Year ended June 30, 2023						Year ended June 30, 2022
								Deposits Into						Deposits Into										Deposits Into						Deposits Into
		$ per						Restricted						Restricted				$ per						Restricted						Restricted
Date	Date	Class A		Total				Cash		Total				Cash		Date		Class A		Total				Cash		Total				Cash
Declared	Declared	Interest		Declared		Paid		Account		Declared		Paid		Account		Declared		Interest		Declared		Paid		Account		Declared		Paid		Account

Eleventh																5/10/2023		$	2.18	$	25.02	$	24.90	$	0.12	$	-	$	-	$	-
Tenth	6/15/2022 (a)	$	5.63	$	65,040.00	$	-	$	-	$	-	$	-	$	-	6/15/2022	(a)	$	5.63		-		64.18		0.83		65.01		-		-
Ninth	2/4/2022		3.44		39,980.00		39,150.00		830.00		-		-		-	2/4/2022		$	3.44		-		-		-		39.98		39.15		0.83
Eighth	10/8/2021		3.44		40,020.00		39,140.00		880.00		-		-		-	10/8/2021		$	3.44		-		-		-		40.01		39.13		0.88
Seventh	5/13/2021 (b)		2.58		-		-		-		30,020.00		29,330.00		690.00
Sixth	1/7/2021		4.28		-		-		-		50,010.00		48,670.00		1,340.00
Fifth	10/19/2020		2.56		-		-		-		29,950.00		29,200.00		750.00
Fourth	7/13/2020		2.56		-		-		-		29,970.00		29,240.00		730.00
Total				$	145,040.00	$	78,290.00	$	1,710.00	$	139,950.00	$	136,440.00	$	3,510.00					$	25.02	$	89.08	$	0.95	$	145.00	$	78.28	$	1.71

(a)	~~Paid~~The distribution was paid on July 15, 2022. ~~See Note 15 for additional information.~~

~~(b)~~

~~The seventh distribution included the cash the Trust received from Fair Funds.~~

See Note 15 for information relating to the suspension of distributions.

As claims are resolved, additional Class A Interests may be issued or cancelled. Therefore, the total amount of a distribution declared may change. In addition, distributions may change if Interestholders that were previously deemed to have forfeited their rights to receive Class A Interest distributions subsequently respond and if overpaid distributions are returned.

For ~~each~~every distribution, a deposit ~~was~~is made into a restricted cash account for amounts (a) payable for Class A Interests that may be issued in the future upon the allowance of unresolved claims, (b) in respect of Class A Interests issued on account of recently allowed claims, (c) for holders of Class A Interests who failed to cash distribution checks mailed in respect of prior distributions, (d) for distributions that were withheld due to pending avoidance actions, and (e) for holders of Class A Interests for which the Trust is waiting for further beneficiary information.

During the years ended June 30, ~~2022~~2023 and ~~2021,~~2022, as (a) claims were resolved, (b) claims were recently allowed, (c) addresses for holders of uncashed distribution checks were obtained, (d) pending avoidance actions were resolved and (e) further beneficiary information was received, distributions of approximately ~~$700,000~~$789,000 and ~~$660,000,~~$700,000, respectively, were paid to holders of Class A Interests ~~that~~from the restricted cash account and distributions payable were ~~issued on account of claims that became allowed during such periods.~~reduced by the same amount.

During the years ended June 30, ~~2022~~2023 and ~~2021,~~2022, as a result of claims being disallowed or Class A Interests being cancelled, approximately $2,629,000 and $815,000, ~~and $1,168,000~~respectively, were released from the restricted cash account and distributions payable were reduced by the same amount.

During the years ended June 30, 2023 and 2022, approximately $20,000 and ~~2021, approximately~~ $0, ~~and $590,000 were~~respectively, was received from ~~the Company’s transfer agent and others relating to Claass A Interest distribution checks~~Interestholders that ~~were returned or not cashed. This amount was deposited into the restricted cash account and distributions payable were increased by the same amount.~~had been overpaid on prior distributions.

F-17

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

As a result of distribution checks that had not been cashed within 180 days of their issuance, Interestholders were deemed to have forfeited their rights to reserved and future Class A Interest ~~distributions, therefore during~~distributions. During the ~~fourth quarter and the year~~years ended June 30, 2023 and 2022, approximately $0 and $1,159,000, respectively, was released from the restricted cash account and distributions payable were reduced by the same amount. During the ~~year~~years ended June 30, ~~2021, no distributions were~~2023 and 2022, some Interestholders that had previously been deemed to have ~~been forfeited.~~forfeited their rights to receive Class A Interest distributions responded and therefore approximately $27,000 and $0, respectively, was added to the restricted cash account and distributions payable were increased by the same amount.

~~F-17~~

~~Table of Contents~~

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

12)	Related Party Transactions

Terry Goebel, a member of the Trust Supervisory Board, is president and a principal owner of G3 Group LA (“G3”), a construction firm specializing in the development of high-end luxury residences. G3 ~~Group LA~~ is owned by Terry Goebel and his son Kelly Goebel. ~~As of~~During the year ended June 30, ~~2022, the Company was under~~2023, G3 completed its contract ~~with G3 Group LA~~ for the development of one single-family home in ~~the~~ Los Angeles, ~~area.~~California. As of June 30, ~~2022~~2023 and ~~2021,~~2022 the remaining amounts payable under ~~these contracts was~~this contract were approximately ~~$438,000~~$0 and ~~$4,391,000,~~$438,000, respectively. During the years ended June 30, 2023 and 2022, approximately $220,000 and ~~2021, approximately~~ $6,050,000, ~~and $7,341,000,~~ respectively, were paid by the Company to G3 ~~Group LA~~ related to ~~these contracts.~~this contract.

The Liquidation Trustee of the Trust is entitled to receive 5% of the total gross amount recovered by the Trust from the pursuit of the Causes of Action. During the years ended June 30, 2023 and 2022, approximately $33,000 and ~~2021, approximately~~ $1,346,000, ~~and $532,000~~respectively, were accrued as amounts due to the Liquidation Trustee, respectively. As of June 30, 2023 and 2022, approximately $32,000 and ~~2021, approximately~~ $81,000, ~~and $160,000,~~ respectively, were payable to the Liquidation Trustee. These amounts are included in accounts payable and accrued ~~expenses~~liabilities in the accompanying consolidated ~~statement~~statements of net assets in liquidation. During the years ended June 30, 2023 and 2022, approximately $83,000 and ~~2021, approximately~~ $1,425,000, ~~and $491,000,~~ respectively, were paid to the Liquidation Trustee.

In November 2019, the Trust entered into an arrangement with Akerman LLP, a law firm based in Miami, Florida of which the Liquidation Trustee is a partner, for the provision, at the option of the Trust on an as-needed basis, of e-discovery and related litigation support services in connection with the Trust’s prosecution of the Causes of Action. Under the arrangement, the Trust is charged for the services at scheduled rates per task which, depending on specific task, include flat rates, rates based on volume of data processed, rates based on the number of data users, the hourly rates of Akerman LLP personnel, or other rates. During the years ended June 30, 2023 and 2022, respectively, approximately $428,000 and ~~2021, approximately~~ $420,000, ~~and $385,000,~~ respectively, were paid related to these services and there ~~were~~are no outstanding payables as of June 30, ~~2022 or 2021.~~2023 and 2022.

The executive officers of the Wind-Down Entity ~~are~~were entitled to a bonus based on the Wind-Down Entity achieving certain specified cumulative amounts of distributions to the Trust. Based on the carrying amounts of the net assets in liquidation included in the accompanying consolidated ~~statement~~statements of net assets in liquidation, approximately ~~$3,000,000~~$0 and ~~$3,040,000~~$3,000,000 were accrued as of June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, as the estimated amount of the bonus (including associated payroll taxes). ~~During the years ended June 30, 2022 and 2021, approximately $652,000 and $0 were accrued as amounts due to the Liquidation Trustee, respectively.~~ This amount iswas included in the payroll and ~~payroll related~~payroll-related costs portion of accrued liquidation costs in the accompanying consolidated statement of net assets in liquidation. During the years ended June 30, 2023 and 2022, $3,273,000 and ~~2021, approximately~~ $692,000, ~~and $1,083,000,~~ respectively, were paid related to ~~the~~executive bonuses.

13)	Causes of Action

One of the Trust’s liquidation activities is to litigate and/or settle Causes of Action. The main areas of litigation have involved actions against Comerica Bank, law firms and individual attorneys and avoidance actions. The Company recognizes recoveries from settlements when an agreement is executed and collectability is reasonably assured.

F-18

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

In December 2021, the Trust received court approval of its agreement to settle its litigation against Comerica Bank. The Trust has also pursued litigation against nine law firms and ten individual attorneys. The cases against five law firms and six individual attorneys have been settled or dismissed. At June 30, 2023, two of the settlements were subject to the California Superior Court granting a motion for a court order that the settlements were made by the parties in good faith. As of June 30, 2023, litigation against the other four law firms and four individual attorneys are in various stages (see Note 15 for additional information).

The Trust has also filed numerous avoidance actions, most of which have been resolved, resulting in recoveries by or judgments in favor of the Trust. As of June 30, 2023, 40 legal actions remain pending. Additionally, since February 15, 2019 and as of June 30, 2023, the Trust has obtained default and stipulated judgments related to certain avoidance actions. It is unknown at this time how much, if any, will ultimately be collected on the judgments. Therefore, the Company has not recognized any recoveries from these judgments.

During the years ended June 30, ~~2022~~2023 and ~~2021,~~2022, the Company recorded the following amounts from the settlement of Causes of Action ($ in thousands):

For the Year Ended June 30,
2022
2021

Comerica Bank $ 24,815 $ -
Other settlement recoveries 2,107 9,839
Total $ 26,922 $ 9,839

		For the Years Ended June 30,
	2023		2022

Other settlement recoveries	$	296	$	2,107
Comerica Bank		-		24,815
Total	$	296	$	26,922

The Company also recorded liabilities of 5% of the ~~above~~ settlement asamounts payable to the Liquidation ~~Trustee.~~

~~F-18~~

~~Table of Contents~~

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

~~On August 6, 2021, the Trust agreed to settle two pending actions against Comerica Bank. The terms of~~Trustee and an allowance for uncollectible settlement installment receivables. See Note 5 for information about the settlement ~~reached in a putative class action against Comerica Bank in the United States Court for the Central District~~receivables, net as of ~~California (the “District Court”) were the subject of a Settlement Agreement among the plaintiffs, Comerica Bank,~~June 30, 2023 and ~~the Trust (the “Settlement Agreement”).~~

The Settlement Agreement resolved two actions. One of the actions, captioned In re Woodbridge Investments Litigation, Case No.2:18-cv-00103-DMG-MRW (C.D. Cal.), was a consolidated putative class action in the District Court brought on behalf of former noteholders and unitholders of the Debtors (the “California Class Action”). The California Class Action was comprised of five separate lawsuits filed between January 4, 2018 and April 26, 2018 and, as consolidated, asserted claims for aiding and abetting fraud, aiding and abetting breach of fiduciary duty, negligence, and violations of California’s unfair competition law. The Trust was the largest member of the putative class in the California Class Action, as holder of approximately 60.9% of all claims against Comerica Bank based on the claims contributed to the Trust by former investors of the Debtors2022.

The other action resolved by the settlement, captioned Michael I. Goldberg as trustee for the Woodbridge Liquidation Trust v. Comerica Bank, Adv. Pro. No. 20-ap-50452-BLS (Bankr. D. Del.), was an adversary proceeding pending in the United States Bankruptcy Court for the District of Delaware, in which the Trust asserted claims against Comerica Bank for fraudulent transfers under the California Civil Code (the “Delaware Adversary Action”). The Delaware Adversary Action also incorporated the claims asserted against Comerica Bank in the California Class Action to the extent that such claims may ultimately be determined to belong to the Debtors’ estates rather than the individual former noteholders and unitholders.

Under the terms of the Settlement Agreement, the California Class Action was settled as a class action, on the basis of a class defined to consist of (i) the Trust and (ii) the holders of Net Claims (as defined in the Settlement Agreement) (the “Non-Contributing Claimants”). Under the terms of the Settlement Agreement, Comerica Bank paid (including through its insurers) an aggregate of $54.5 million, consisting of $54.2 million to settle the California Class Action (Class Payment) and $0.3 million to settle the Delaware Adversary Action (the “FT Payment”). The Class Payment was intended to provide recoveries to members of the plaintiff class and to fund, in amounts to be determined by the District Court, the legal fees of plaintiffs’ counsel in the California Class Action, totaling 25% of the California Class Action settlement payment, the costs of administering the settlement, and certain incentive awards for class representatives. Under the Settlement Agreement, Comerica Bank (and certain related parties) was released from all claims advanced, or that could have been advanced, related to the facts alleged in the California Class Action or the Delaware Adversary Action.

The Net Class Consideration (defined in the Settlement Agreement as the Class Payment minus Court-awarded attorneys’ fees and costs) was distributed to class members as set forth in the Settlement Agreement, resulting in a distribution to the Trust of approximately 60.9% of the Net Class Consideration (corresponding to the Trust’s holding of approximately 60.9% of all claims against Comerica based on the claims contributed to the Trust by former investors of the Debtors). No costs of administration or incentive award were deducted from the Trust’s share of the Net Class Consideration. The FT Payment was made to the Trust. The FT Payment was not subject to reduction for any reason, including attorneys’ fees, costs of administration, or incentive awards.

On September 3, 2021, the District Court entered an order granting preliminary approval to the settlement of the California Class Action. The District Court granted final approval on December 17, 2021.

~~F-19~~

~~Table of Contents~~

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

~~During the year ended June 30, 2022, the Company received proceeds of approximately $54,500,000 from the settlement. The allocation of the proceeds is as follows ($ in thousands):~~

Trust’s net portion $ 24,815
Payable to non-contributing claimants 15,600
Payable for approved legal fees and litigation costs 13,960
Payable for incentive awards 100
Payable for administrative costs relating to non-contributing claimants 25
Total $ 54,500

The Settlement Agreement provides for the Trust to serve as administrator of the settlement. In that capacity, the Trust received the full settlement amount from the defendant (or its insurers), and, from such amount, paid the court-approved legal fees and litigation costs to plaintiffs’ class counsel, court-approved incentive awards for class representatives, and costs relating to notice and administration of the settlement. In addition, in its role as administrator of the settlement, the Trust paid the Non-Contributing Claimants their portion of the settlement, constituting approximately 39.1% of the Net Class Consideration, less incentive awards and costs of notice and administration. All of the proceeds have been distributed according to the settlement except for approximately $13,000 payable to non-contributing claimants and approximately $25,000 payable for court approved notice and administrative costs as the Company has not received all of the necessary documentation.

14)	Commitments and Contingencies

~~As of June 30, 2022, the Company had construction contracts of which approximately $1,500,000 was unpaid.~~

The Company had a lease for its office space that expired on August 31, 2021. On June 4, 2021, the Company entered into a new office lease at a different location. The new lease, which commenced on August 1, 2021 and expired on July 31, 2022, included two six-month extension options. On May 18, 2022, the Company ~~also had one three-month~~exercised its first option to extend the ~~lease.~~lease for six months. On November 16, 2022, the Company exercised its second option to extend its lease for an additional six months through July 31, 2023. In addition, the Company amended its lease to include a third six-month option to extend. As of June 30, 2023, the Company had not exercised its third six-month option to extend (see Note 15 for additional information). The monthly base rent as of June 30, 2023 is approximately $4,000 plus common area maintenance charges. The amount of rent paid, including common area maintenance and parking charges, during the ~~year~~years ended June 30, ~~2021~~2023 and 2022, was approximately ~~$291,000. On June 4, 2021,~~$55,000 and $55,000, respectively.

The Wind-Down Entity has part-time employment agreements with its two executive officers through December 31, 2023. The agreements renew automatically until terminated, subject to the ~~Company opted not~~right of either party to ~~extend its existing lease~~terminate the agreement at any time and ~~entered into a new office lease at a different location. The new lease is~~ for ~~the period from August 1, 2021 through July 31, 2022. The annual rent is approximately $43,000 plus common area maintenance charges.~~ any reason on thirty days~~On May 16, 2022, the Company extended its lease for six months.~~ ’The Company has one additional six-month option to extend the lease. The Company paid approximately $55,000 relating to prepaid rent, common area maintenance charges and a security deposit for the new lease during advance written notice.

During the year ended June 30, ~~2022.~~2023, a construction defect claim was asserted against one of the Wind-Down Subsidiaries by the buyer of one of the subsidiary’s single-family homes. The ~~monthly rent during~~subsidiary has tendered the ~~six-month extension~~claim to its insurance carrier. At this time, the amount of the liability exposure, if any, has not been determined and it is ~~approximately $4,000 per month.~~not known whether the subsidiary has any exposure in excess of its insurance coverage. The subsidiary is investigating the claim, including the extent and causes of the alleged damage and the identification of other potentially responsible persons (see Note 15).

The Company is not presently the defendant in any material litigation nor, to the Company’s knowledge, is any material litigation threatened against the ~~Company.~~Company other than as described herein.

~~The Company is not aware~~

F-19

Table of ~~any environmental liabilities that it believes would have a material adverse effect on its net assets in liquidation.~~Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (Continued)

Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of June 30, 2023 and 2022 (Continued)

15)	Subsequent Events

The Company evaluates subsequent events up until the date the unaudited consolidated financial statements are issued.

Causes of Action

On July 19, 2023, the California Superior Court granted a motion that the settlement with Bailey Cavalieri LLC and Thomas Geyer was made by the parties in good faith. On July 27, 2023, the California Superior Court granted a motion that the settlement with Halloran & Sage and Richard Roberts was made by the parties in good faith. On August 31, 2023, the California Superior Court granted a motion that the settlement with Davis Graham & Stubbs LLP and S. Lee Terry was made by the parties in good faith.

~~Distributions~~

During the perio~~A cash distribution on account~~d from July 1, 2023 through September 27, 2023, the Company recognized approximately $34,390,000, net of litigation costs and attorney fees, from the settlement of ~~then-allowed claims in the~~Causes of Action. This amount ~~of approximately~~ ~~$64,194,000~~was ~~paid on July~~ ~~15,2022~~ ~~and a deposit into a restricted account of approximately~~ ~~$825,000~~recognized because it was ~~made on July~~ received or concluded that collectibility was reasonably assured.~~26,~~

~~2022.~~

During the period from July 1,~~2022~~ 2023 through September ~~23,2022,~~27, 2023, the Company recorded approximately $2,478,000 payable to the Liquidation Trustee, related to the settlement of Causes of Action.

During the period from July 1, 2023 through September 27, 2023, the Company paid approximately $1,212,000 to the Liquidation Trustee related to the recovery of amounts from settled Causes of Action.

Distributions

During the period from July 1, 2023 through September 27, 2023, as (a) claims were resolved, (b) claims were recently allowed, (c) addresses for holders of uncashed distribution checks were obtained, (d) pending avoidance actions were resolved and (e) further beneficiary information was received, distributions of approximately ~~$698,000~~ ~~were paid to holders~~a result of Class A Interests being cancelled, approximately $40,000 was released from the restricted cash account and distributions payable were reduced by the same amount.

Suspension of Distributions

~~F-20~~

~~Table~~On August 3, 2023, at the recommendation of ~~Contents~~

~~PART I.~~the Liquidation Trustee, the Trust suspended the making of additional Trust distributions pending the results of the Company’s investigation of a construction defect claim asserted against one of the Wind-Down Subsidiaries by the buyer of one of subsidiary’s single-family homes.~~FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

~~During the period from July~~
1,~~2022~~ ~~through September~~ ~~23,2022,~~ ~~as a result of claims being disallowed or Class A Interests being cancelled, approximately~~ ~~$2,629,000~~ ~~was released from the restricted cash account and distributions payable was reduced by the same amount.~~

Beneficial Interests

The following table summarizes the Liquidation Trust Interests for the period from July 1, ~~2022~~2023 through September ~~23, 2022:~~27, 2023:

Liquidation Trust Interests Class A Class B

Outstanding at June 30, 2022
11,513,535
675,617
Allowed during the period 1,348 -
5% enhancement for certain allowed claims
67 -
Settlement of claims by cancelling Liquidation Trust Interests (760 ) -
Outstanding at September 23, 2022 11,514,190 675,617

Liquidation Trust Interests	Class A			Class B

Outstanding at July 1, 2023		11,515,800			675,617
Allowed claims		-			-
Settlement of claims by cancelling Liquidation Trust Interests		(1,222	)		-
Outstanding at September 27, 2023		11,514,578			675,617

Of the ~~11,514,190~~11,514,578 Class A Interests outstanding as of September ~~23, 2022, 11,436,259~~27, 2023, 11,435,288 are held by Qualifying Victims (Note 7).

~~The following table summarizes unresolved claims against the Debtors as they relate to Liquidation Trust Interests (rounded) for the period from July 1, 2022 through September 23, 2022:~~

Liquidation Trust Interests Class A Class B

Outstanding at June 30, 2022 90,793 333
Allowed during the period (1,348 ) -
Disallowed during the period (75,570 ) -
Outstanding at September 23, 2022 13,875 333

~~Of the~~ ~~13,875~~ ~~Class A Interests relating to unresolved claims as of September 23, 202~~2~~, 1,880 would be held by Qualifying Victims (Note 7).~~

~~Employment Agreement~~

~~On September~~ 1,~~2022,~~ ~~the Wind-Down Entity executed a part-time employment agreement with its Chief Executive Officer. On September~~ 9,~~2022,~~ ~~Mr. Chin was paid approximately~~ ~~$24,000~~ ~~of unused and accrued vacation in accordance with this agreement.~~

~~F-21~~F-20

Table of Contents

~~PART I.FINANCIAL INFORMATION (CONTINUED)~~

~~Item 1. Financial Statements (Continued)~~

~~Woodbridge Liquidation Trust and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~

~~As of June 30, 2022 and 2021~~

~~Escrow Receivable~~

~~On August~~ PART I. FINANCIAL INFORMATION (CONTINUED)8,~~2022,~~ ~~the Company received the certificate of occupancy for~~ ~~1520~~ ~~Carla Ridge and on August~~ ~~10,2022,~~ ~~the Company received its~~ ~~$2,500,000~~ ~~escrow receivable.~~ ~~On August~~ 1,~~2022,~~ ~~the Company received the certificate of occupancy for~~ ~~10733~~ ~~Stradella and on August~~ ~~31,2022,~~ ~~the Company received its~~ ~~$400,000~~ ~~escrow receivable related to the receipt of certificate of occupancy.~~

Item 1. Financial Statements (Continued)

~~Causes~~Woodbridge Liquidation Trust and Subsidiaries

Notes to Consolidated Financial Statements

As of ~~Action~~June 30, 2023 and 2022 (Continued)

Forfeited Assets

During the period from July 1, ~~2022~~2023 through September ~~23,~~27, ~~2022,~~ ~~the Trust recorded approximately~~ ~~$190,000~~ ~~from the settlement of Causes of Action. The Company recorded approximately~~ ~~$9,000~~ ~~as the amount due to the Liquidation Trustee on account of such settlements.~~

~~Forfeited Assets~~

~~During the period from July~~ 1,~~2022~~ ~~through September~~ ~~23,2022,~~2023, the Company realized net proceeds of approximately $~~154~~50,000 from the sale of Forfeited Assets.

Office Lease

On July 27, 2023, the Company exercised its third and final six-month option to extend its office lease through January 31, 2024.

~~Bond Refunds~~

Pro Forma Net Assets in Liquidation (Unaudited)

~~During~~The following is a pro forma statement of net assets in liquidation as of September 27, 2023, which only reflects the ~~period from July 1, 2022 through September 23, 2022, the Company received approximately $130,000~~subsequent events discussed above in this footnote ($ in thousands):

			Pro Forma				Pro Forma
	June 30, 2023		Adjustments			(a)	September 27, 2023

Assets
Real estate assets held for sale, net	$	770	$	-			$	770

Cash and cash equivalents		25,704		34,390		(b)		58,922
				(1,212	)	(c)
				40		(d)

Restricted cash		4,473		(40	)	(d)		4,483
				50		(e)

Other assets		2,645		435		(f)		3,030
				(50	)	(e)

Total assets	$	33,592	$	33,613			$	67,205

Liabilities
Accounts payable and accrued liabilities	$	37	$	2,478		(g)	$	1,303
				(1,212	)	(c)

Distributions payable		1,283		(40	)	(h)		1,243

Accrued liquidation costs		25,499		-				25,499

Total liabilities	$	26,819	$	1,226			$	28,045

Commitments and Contingencies

Net Assets in Liquidation
Restricted for Qualifying Victims	$	3,491	$	-			$	3,491

All Interestholders		3,282		34,390		(b)		35,669
				435		(f)
				40		(h)
				(2,478	)	(g)

Total net assets in liquidation	$	6,773	$	32,387			$	39,160

Notes to pro forma statement of ~~bond refunds.~~net assets in liquidation.

(a)	Only for subsequent events discussed in Footnote 15. There may be changes in estimates and other transactions during the three months ending September 30, 2023 that are not reflected in the pro forma statement of nets assets in liquidation as of September 27, 2023.

(b)	Recognition and receipt of approximately $34.390 million from settlement of Causes of Action during the period from July 1, 2023 through September 27, 2023.

(c)	Payment of approximately $1.212 million to the Liquidation Trustee during the period from July 1, 2023 through September 27, 2023.

(d)	Transfer from distribution reserve restricted cash to cash and cash equivalents of approximately $40,000 during the period from July 1, 2023 through September 27, 2023 related to cancelled Class A Interests.

(e)	Receipt of cash from the sale of Forfeited Assets during the period July 1, 2023 and September 27, 2023.

(f)	Accrual of estimated interest revenues for additional cash on hand during the period July 1, 2023 through December 31, 2023.

(g)	Accrual of approxiamtely $2.478 million payable to the Liquidation Trustee from the settlement of Causes of Action during the period from July 1, 2023 through September 27, 2023.

(h)	Reversal of distributions payable of approxinately $40,000 during the period from July 1, 2023 through September 27, 2023 related to cancelled Class A Interests.

F-21

Table of Contents

Delaware		36-7730868
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

201 N. Brand Blvd., Suite M Glendale, California		91203
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☐☒	Smaller reporting company ☒
		Emerging growth company ☒

Date of Sale	Number of Class A Interests Sold		Number of Class B Interests Sold		Nature of the Transaction	Consideration Received

May 29, 2023		1,610.00		-	Allowance of claims	Allowance of claims

Total		1,610.00		-

	Plan
	Effective
	Date		June 30, 2022

Net real estate assets held for sale, net	$	582.71	$	29.06
Cash and cash equivalents		36.02		96.81
Restricted cash		0.32		6.12
Other assets		2.29		5.83

Total assets	$	621.34	$	137.82

Accounts payable and accrued liabilities	$	5.78	$	0.12
Distributions payable		-		68.77
Accrued liquidation costs		232.07		34.54

Total liabilities	$	237.85	$	103.43

Net assets in liquidation:
Restricted for Qualifying Victims	$	-	$	3.48
All Interestholders		383.49		30.91

Total net assets in liquidation	$	383.49	$	34.39

					Number Outstanding as of
	Number Outstanding as of
	September 23, 2022		June 30, 2022		September 27, 2023		June 30, 2023

Class A Liquidation Trust Interests		11,514,190		11,513,535		11,514,578		11,515,800

Class B Liquidation Trust Interests		675,617		675,617		675,617		675,617

	Restricted for Qualifying Victims		All Interestholders			Total

Net assets in liquidation as of beginning of year	$	3,485	$	30,910		$	34,395

Change in assets and liabilities:
Restricted for Qualifying Victims -
change in carrying value of assets and liabilities, net		6		-			6

All Interestholders-
Change in carrying value of assets and liabilities, net		-		(5,197	)		(5,197	)
Distributions (declared) reversed, net		-		(22,431	)		(22,431	)
Net change in assets and liabilities		-		(27,628	)		(27,628	)

Net assets in liquidation, as of end of year	$	3,491	$	3,282			6,773

Sales of furniture, net	$	635
Cash interest earned		531
Miscellaneous		52
Total	$	1,218

	Restricted For Qualifying Victims		All Interestholders			Total

Net Assets in Liquidation as of beginning of year	$	3,167	$	126,373		$	129,540

Change in assets and liabilities:
Restricted for Qualifying Victims - change in carrying value of assets and and liabilities, net		318		-			318

All Interestholders-
Change in carrying value of assets and liabilities, net		-		47,602			47,602
Distributions (declared) reversed, net		-		(143,065	)		(143,065	)
Net change in assets and liabilities		-		(95,463	)		(95,463	)

Net Assets in Liquidation as of end of year	$	3,485	$	30,910		$	34,395

Forfeited deposit from prospective buyer	$	318
Bond refunds		185
Sales of furniture, net		162
Property tax refunds		79
Cash interest earned		54
Miscellaneous		79
Total	$	877

				During the Period from February 15, 2019 (inception) through June 30, 2023 ($ in Millions)							During the Period from February 15, 2019 (inception) through September 27, 2023 ($ 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)									(6.27	)						(6.31	)
Returned (c)									0.74							0.74
Forfeited (d)									(1.13	)						(1.13	)
Subtotal									(6.66	)						(6.70	)

Distributions Paid from Reserve Account (e)									(3.66	)						(3.66	)

Distributions Payable, Net				as of 6/30/2023:				$	1.28		as of 9/27/2023:				$	1.24

Name and Princpal Position at June 30, 2022 ⁽¹⁾	Fiscal Year	Base		Bonus			All Other Compensation⁽²⁾		Total
Name and Principal Position at											Fiscal						All Other
June 30, 2023 ⁽¹⁾											Year	Base		Bonus			Compensation⁽²⁾		Total

Michael I. Goldberg, Esq.	2022	$	162,196	$	1,346,093		$	-	$	1,508,289	2023	$	186,333	$	33,344	⁽³⁾	$	-	$	219,677
Liquidation Trustee	2021	$	366,949	$	532,038	⁽³⁾	$	-	$	898,988	2022	$	162,196	$	1,346,093	⁽³⁾	$	-	$	1,508,289

Frederick Chin	2022	$	938,654	$	450,000	⁽⁴⁾	$	120,000	$	1,508,654
Wind-Down Entity, CEO	2021	$	861,808	$	862,500	⁽⁴⁾	$	163,834	$	1,888,142

Marion W. Fong	2022	$	569,631	$	136,125	⁽⁴⁾	$	-	$	705,756	2023	$	544,030	$	638,550	⁽⁴⁾	$	216,402	$	1,398,982
Wind-Down Entity, CFO	2021	$	517,085	$	123,750	⁽⁴⁾	$	-	$	640,835
Wind-Down Entity, CEO & CFO ⁽⁵⁾											2022	$	569,631	$	136,125	⁽⁴⁾	$	-	$	705,756

David Mark Kemper II	2022	$	443,046	$	105,875	⁽⁴⁾	$	-	$	548,921	2023	$	409,801	$	496,650	⁽⁴⁾	$	168,313	$	1,074,764
Wind-Down Entity, COO and CIO	2021	$	402,177	$	96,250	⁽⁴⁾	$	-	$	498,427
Wind-Down Entity, COO											2022	$	443,046	$	105,875	⁽⁴⁾	$	-	$	548,921

Frederick Chin											2023	$	417,500	$	2,137,500	⁽⁴⁾	$	23,625	$	2,578,625
Wind-Down Entity, CEO ⁽⁵⁾											2022	$	938,654	$	450,000	⁽⁴⁾	$	120,000	$	1,508,654

Bonus Category	Period	Threshold Amount	Cumulative Amount Distributions During Period	Bonus Payment Amount for Period
A	February 15, 2019 through the earlier to occur of the expiration of the term of the Full-Time Employment Agreement and the completion of the liquidation process for the Wind-Down Entity	$351,093,000	$351,093,000 to $401,442,999	$1,125,000
			$401,443,000 to $528,584,999	$1,500,000
			$528,585,000 or over	$1,875,000

Distributions declared	$	(139,956	)
Distributions reversed		1,168
Distributions declared, net	$	(138,788	)

		For the Year Ended June 30,
	2022		2021

Comerica Bank	$	24,815	$	-
Other settlement recoveries		2,107		9,839
Total	$	26,922	$	9,839

Trust’s net portion	$	24,815
Payable to non-contributing claimants		15,600
Payable for approved legal fees and litigation costs		13,960
Payable for incentive awards		100
Payable for administrative costs relating to non-contributing claimants		25
Total	$	54,500

	By:	/s/ Michael I. Goldberg

	Name:	Michael I. Goldberg
	Title:	Liquidation Trustee