| - | Paid construction costs of approximately $11.45$14.09 million relating to single-family homes under development. |
Signed agreements to settle Causes of Action of approximately $2.18 million.
| - | Paid holding costs of approximately $5.16$1.42 million. |
| - | Paid general and administrative costs of approximately $6.06$5.53 million, including approximately $.31$.28 million of board member fees and expenses, approximately $1.17$1.39 million of payroll and other general and administrative costs and approximately $4.58$3.85 million of post Plan Effective Date professional fees. |
| - | Paid professional fees incurred before the Plan Effective Date of approximately $.36 million.
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The following is a summary of the Company's operations during the six months ended December 31, 2019:
Consolidated Statement of Changes in Net Assets in Liquidation
For the Six months ended December 31, 2019
Net assets in liquidation, as of June 30, 2019 | | $ | 329,971 | |
Change in assets and liabilities: | | | | |
Change in carrying value of assets and liabilities, net | | | 4,535 | |
Distributions reversed | | | 77 | |
Net change in assets and liabilities | | | 4,612 | |
Net assets in liquidation, as of December 31, 2019 | | $ | 334,583 | |
PART I. FINANCIAL INFORMATION (CONTINUED)Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Net assets in liquidation increased approximately $4.61 million during the six month period ended December 31, 2019. This increase was due to changes in the carrying value of assets and liabilities of approximately $4.53 million and distributions that were reversed for disallowed claims of approximately $.08 million. The components of the net changes in assets and liabilities are as follows ($ in thousands):
Reduction of state, local and other taxes | | $ | 2,890 | |
Settlement recoveries recognized, net | | | 3,476 | |
Sales proceeds in excess of carrying value | | | 3,291 | |
Remeasurement of assets and liabilities, net | | | (5,314 | ) |
Other | | | 192 | |
Change in carrying value of assets and liabilities, net | | $ | 4,535 | |
During the six months ended December 31, 2019, the Company:
| - | Sold eight single-family homes, 16 lots, settled two secured loans, sold two other properties and collected a principal paydown on one secured loan for total net proceeds of approximately $103.93 million.
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| - | Signed agreements to settle Causes of Action for payment to the Trust of approximately $3.66 million
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| - | Paid construction costs of approximately $25.54 million relating to single-family homes under development.
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| - | Paid holding costs of approximately $6.58 million.
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| - | Paid general and administrative costs of approximately $11.57 million, including approximately $.59 million of board member fees and expenses, approximately $2.54 million of payroll and other general and administrative costs and approximately $8.44 million of post Plan Effective Date professional fees.
|
| - | Paid professional fees incurred before the Plan Effective Date of approximately $.36 million.
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Liquidity and Capital Resources
Liquidity
The Company’s primary sources for meeting its capital requirements are its cash, availability under WB Propco, LLC’s revolving line of credit (LOC),the LOC, proceeds from the sale of its real estate assets and recoveries onfrom Causes of Action. The Company’s primary uses of funds are and will continue to be for distributions, development costs, holding costs and general and administrative costs, all of which the Company expects to be able to adequately fund over the next 12 months from its primary sources of capital.
Capital Resources
In addition to consolidated cash and cash equivalents at December 31, 2019September 30, 2020 of approximately $101.80$89.27 million (of which approximately $2.97$6.05 million is restricted), the capital resources available to the Company and its uses of liquidity are as follows:
PART I. FINANCIAL INFORMATION (CONTINUED)Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Revolving Line of Credit
WB Propco, LLC, a subsidiaryOn June 19, 2020, two wholly-owned subsidiaries of the Wind-Down Entity isentered into a $25,000,000 revolving LOC. The LOC may be increased to up to $30,000,000 with the borrower under a $21.98 million LOC with a financial institution. The Wind-Down Entity is a guarantor under the LOC.pledge of one or more additional properties and lender approval. The LOC matures on May 1, 2020.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, which is 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 prime rate (4.75% asLOC is secured by a deed of December 31, 2019), provided, however, thattrust on one property, the personal property associated therewith and the interest rate can never be lower than 5.25% per annum.reserve. The interest rateWind-Down Entity is adjusted monthly. The carrying valuethe guarantor of the collateral for the lineLOC. The Company is required to keep a cash balance of credit was approximately $100 million at December 31, 2019. As of December 31, 2019, WB Propco, LLC was in compliance$20,000,000 on deposit with the financial covenantslender in order to avoid a non-compliance fee of 2% of the line of credit.shortfall in the required deposit and is required to comply with various covenants.
No amounts were outstanding under the LOC as of December 31, 2019.September 30, 2020 and November 13, 2020.
Sales of Real Estate Assets
The Wind-Down Entity and the Wind-Down Subsidiaries are in the process of developing, marketing and selling itstheir real estate assets, all of which are availableheld for sale, with the exception of 12seven single-family homes which were under development as of December 31, 2019.September 30, 2020. There can be no assurance as to the amount of net proceeds that the Company will receive from the sale of real estate assets or when the net sales proceeds will be received. The net proceeds for the three and six months ended December 31, 2019September 30, 2020 may not be indicative of future net proceeds, which may be significantly lower. In addition, it may take longer to sell the properties than the Company has estimated.
PART I. FINANCIAL INFORMATION (CONTINUED)
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) |
Recoveries
During the three and six months ended December 31, 2019,September 30, 2020, the Company recognized approximately $1.47$6.58 million and $3.65 million, respectively, from the settlement of Causes of Action. There can be no assurance that the amounts the Company recovers from settling Causes of Action, fair funds recoveries and forfeited assets recoveries in the future will be consistent with the amount recovered during the three and six months ended December 31, 2019.September 30, 2020.
Uses of Liquidity
The primary uses of the Company’s liquidity are to pay (a) distributions payable, (b) development costs, (b)(c) holding costs, and (c)(d) general and administrative costs. As of December 31, 2019,September 30, 2020, the Company’s total liabilities were approximately $143.31$97.16 million. The total liabilities recorded as of December 31, 2019September 30, 2020 may not be indicative of the costs paid in future periods, which may be significantly higher.
Given current cash and cash equivalent balances, projected sales of real estate assets, availability under the line of credit,LOC, Causes of Action recoveries, distributions declared and expected cash needs, the Company does not expect a deficiency in liquidity in the next 12 months. Due to the uncertain nature of future net sales proceeds, recoveries and costs to be incurred, it is not possible to be certain that the current liquidity will be adequate to cover all future financial needs of the Company. Creating contingent obligation agreements and/or seeking methods to reduce professional costs, including legal fees, and administrative costs are strategies that could be undertaken to address liquidity issues should they arise. These strategies could impact the Company’s ability to maximize recoveries from the settlement of Causes of Action.
PART I. FINANCIAL INFORMATION (CONTINUED)Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Distributions
No distributions were declared duringDistributions will be made at the three and six months ended December 31, 2019. In respect of a distribution declared in March 2019, as of September 30, 2019 an amount equal to approximately $1.69 million had been held by the Company in a restricted cash account in respect of claims that were unresolved assole discretion of the dateLiquidation Trustee in accordance with the provisions of the distribution. Approximately $.03 million was paidPlan and the Trust Agreement. As of November 13, 2020, the Liquidation Trustee has declared five distributions to holders ofthe Class A Interests in respect of claims that became allowed during the three months ended December 31, 2019. An amount of approximately $.04 million was released from the restricted cash account andInterestholders. The distributions were reduced by the same amount in respect to disallowed claims during the three months ended December 31, 2019. In October 2019, approximately $.12 million was received from the Company’s transfer agent relating to distribution checks that were returned or not cashed. This amount was deposited into the restricted cash account and distributions payable were increased by the same amount. As of December 31, 2019, approximately $1.74 million remains in a restricted cash account in respect of unresolved claims.
On January 2, 2020, a distribution in the amount of approximately $53,426,000 was declared which represents $4.50 per Class A Interest. Total distributions of approximately $51,188,000 wereare paid on January 10, 2020. Aaccount of the then-allowed claims and a deposit of approximately $2,238,000, wasis made into a restricted cash account for distributionsamounts (a) payable in respect offor Class A Interests that may be issued in the future may be issued upon the allowance of currently disputedunresolved claims, (b) payableclaims that are recently resolved, (c) to holders of Class A Interests who failed to cash distribution checks mailed in respect of the initial distributionprior distributions, (d) that were withheld due to pending avoidance actions and (c) payable(e) in respect of which the Trust is waiting for further beneficiary information.
PART I. FINANCIAL INFORMATION (CONTINUED)
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) |
The following tables summarize the distributions declared, distributions paid and the activity in the restricted cash account for the periods from February 15, 2019 (inception) through September 30, 2020 and from February 15, 2019 through November 13, 2020:
| | | | | | During the Period from February 15, 2019 (inception) through September 30, 2020 ($ in Millions) | | | During the Period from February 15, 2019 (inception) through November 13, 2020 ($ 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 | 10/16/2020 | | | 2.56 | | | | - | | | | - | | | | - | | | | 29.95 | | | | 29.20 | | | | 0.75 | |
Subtotal | | | $ | 15.49 | | | $ | 153.10 | | | $ | 146.94 | | | $ | 6.16 | | | $ | 183.05 | | | $ | 176.14 | | | $ | 6.91 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions Reversed | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Disallowed | | | | | | | | | | | | | | | | (1.75 | ) | | | | | | | | | | | (2.04 | ) |
Returned | | | | | | | | | | | | | | | | 0.27 | | | | | | | | | | | | 0.37 | |
Subtotal | | | | | | | | | | | | | | | | (1.48 | ) | | | | | | | | | | | (1.67 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions Paid from Reserve Account | | | | | | | | (1.62 | ) | | | | | | | | | | | (1.62 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions Payable, Net | | | as of 9/30/2020: | | | $ | 3.06 | | | | | | | as of 11/13/2020: | | | $ | 3.62 | |
(a) As a result of claims being disallowed.
(b) Distribution checks returned or not cashed.
(c) Paid as claims are allowed Class A Interests, the legal owners of which remain unidentified.or resolved.
The liquidation trustee will continue to assess the adequacy of funds held and expects to make additional cash distributions on account of excess Trust assets to Interestholders,Class A Interests, but does not currently know the timing or amount of any such distribution(s).
Contractual Obligations
As of December 31, 2019,September 30, 2020, the Company has contractual commitments related to construction contracts totaling approximately $52 million, including future costs and amounts payable.$25.10 million. The Company expects to complete the construction of these single-family homes byduring the end of its fiscal year ending June 30, 2022. The Company has an office lease that expires in August 2020.2021. The Company expects that it will continue to lease office space until the liquidation process is completed.
PART I. FINANCIAL INFORMATION (CONTINUED)Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations
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The following table summarizes the future contractual obligations and commitments as of December 31, 2019 ($ in thousands):
| | Less than 1 year | | 1-3 years | | 3-5 years | | 5 years | | Total | |
Construction contracts (1) | | | |
| |
| |
| | $ | 52,000 | |
Office lease | | $ | 160 | | $ | - | | $ | - | | $ | - | | | 160 | |
Total | | $ | 160 | | $ | - | | $ | - | | $ | - | | $ | 52,160 | |
| (1) | Since the construction contracts do not contain payment dates, the Company is not able to allocate the total obligation by period.
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Off-Balance Sheet Arrangements
As of December 31, 2019,September 30, 2020, the Company did not have any off-balance sheet arrangements, other than those disclosed under “Contractual Obligations” above, that have or are reasonably likely to have a material effect on its consolidated financial statements, liquidity or capital resources.
Quantitative Disclosures about Market Risk
As of September 30, 2020, the Company does not have any market risk exposure as defined by Securities and Exchange Commission Regulation 229.305.
Inflation
Until the Company completes the liquidation of its assets, it may be exposed to inflation risks relating to increases in the costs of construction and other accrued liquidation costs.
PART I. FINANCIAL INFORMATION (CONTINUED)
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) |
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 and general and administrative costs to be incurred until the completion of the liquidation of the Company. 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 Liquidation Basisthe 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 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.
PART I. FINANCIAL INFORMATION (CONTINUED)Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations
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The Company has not recorded any amount from the future settlement of Causes of Action, fair funds or forfeited asset recoveries in the accompanying consolidated financial statements because they cannot be reasonably estimated.
Valuation of Real Estate
The measurement of real estate assets held for sale is based on current contracts (if any), 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, obtained third party appraisals.
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 development costs to be incurred to prepare the assets for sale as well as the 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.
Changes in Carrying Value
All of the changes in the estimated liquidation value of the Company’s assets, real estate held for sale, other assets and liabilities are reflected as a change to the Company’s net assets in liquidation.
On a quarterly basis, the Company reviewswill review the estimated net realizable values and liquidation costs and record any significant variances. The Company will also 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.
All changes in the estimated liquidation value of the Company’s assets, real estate held for sale, or other assets and liabilities are reflected as a change to the Company’s net assets in liquidation.
PART I. FINANCIAL INFORMATION (CONTINUED)
Item 3. | 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.
This quarterly report does not include a report of management’s assessment of internal controls over financial reporting due to a transition period established by rules of the SEC for newly public companies.
PART II. OTHER INFORMATION
Below is a description of pending litigation. InAs the Company is the plaintiff in these legal proceedings and does not have the ability to estimate the ultimate recovery amount until they are settled, and in accordance with the Company’s accounting policy, no recoveries have been recorded in the Company’s consolidated financial statements for these legal proceedings.proceedings, other than for settlements for which the Trust has entered into a signed settlement agreement.
Goldberg v. Halloran & Sage LLP, et al., Case No. 19STCV42900 (Cal. Super. Ct., L.A. Cnty., filed Dec. 2, 2019), is an action by the Trust against nine law firms (Halloran & Sage LLP; Balcomb & Green, P.C.; Rome McGuigan, P.C.; Haight Brown & Bonesteel LLP; Bailey Cavalieri LLC; Sidley Austin LLP; Davis Graham & Stubbs LLP; Robinson & Cole LLP; and Finn Dixon & Herling LLP) and ten individual attorneys (Richard Roberts, Lawrence R. Green, Jon H. Freis, Brian Courtney, Ted Handel, Thomas Geyer, Neal Sullivan, S. Lee Terry, Jr., Shant Chalian, and Reed Balmer) for conduct in connection with their representation of Robert Shapiro, the Debtors or their affiliates before the commencement of the Bankruptcy Cases, as well as against up to 100 “Doe” defendants. The conduct challenged in the complaint includes knowingly and/or negligently preparing loan documents and investment agreements with material misstatements and omissions, designing deceptive securities products, preparing incorrect legal opinion memoranda on which investors relied, and assisting in the creation of nominally third-party borrower entities that were in fact controlled by Robert Shapiro.
The first set of counts in the complaint are against law firm Halloran & Sage LLP, attorney Richard Roberts, and the “Doe” defendants for aiding and abetting securities fraud (First Count), aiding and abetting fraud (Second Count), aiding and abetting breach of fiduciary duty (Third Count), negligent misrepresentation (Fourth Count), professional negligence (Fifth Count), and aiding and abetting conversion (Sixth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive damages.
The second set of counts in the complaint are against law firm Balcomb & Green, P.C., attorney Lawrence R. Green, and the “Doe” defendants for aiding and abetting securities fraud (Seventh Count), aiding and abetting fraud (Eighth Count), aiding and abetting breach of fiduciary duty (Ninth Count), negligent misrepresentation (Tenth Count), professional negligence (Eleventh Count), and aiding and abetting conversion (Twelfth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive damages.
The third set of counts in the complaint are against attorney Jon H. Freis and the “Doe” defendants for aiding and abetting securities fraud (Thirteenth Count), aiding and abetting fraud (Fourteenth Count), aiding and abetting breach of fiduciary duty (Fifteenth Count), negligent misrepresentation (Sixteenth Count), professional negligence (Seventeenth Count), and aiding and abetting conversion (Eighteenth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive damages.
The fourth set of counts in the complaint are against law firm Rome McGuigan, P.C., attorney Brian Courtney, and the “Doe” defendants for aiding and abetting securities fraud (Nineteenth Count), aiding and abetting fraud (Twentieth Count), aiding and abetting breach of fiduciary duty (Twenty-First Count), negligent misrepresentation (Twenty-Second Count), professional negligence (Twenty-Third Count), and aiding and abetting conversion (Twenty-Fourth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive damages.
PART II. OTHER INFORMATION (CONTINUED)
Item 1. | Legal Proceedings (Continued)
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The fifth set of counts in the complaint are against law firm Haight Brown & Bonesteel LLP, attorney Ted Handel, and the “Doe” defendants for aiding and abetting securities fraud (Twenty-Fifth Count), aiding and abetting fraud (Twenty-Sixth Count), aiding and abetting breach of fiduciary duty (Twenty-Seventh Count), negligent misrepresentation (Twenty-Eighth Count), professional negligence (Twenty-Ninth Count), and aiding and abetting conversion (Thirtieth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $20 million, as well as for punitive damages.
The sixth set of counts in the complaint are against law firm Bailey Cavalieri LLC, Thomas Geyer, and the “Doe” defendants for aiding and abetting securities fraud (Thirty-First Count), aiding and abetting fraud (Thirty-Second Count), aiding and abetting breach of fiduciary duty (Thirty-Third Count), negligent misrepresentation (Thirty-Fourth Count), professional negligence (Thirty-Fifth Count), and aiding and abetting conversion (Thirty-Sixth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive damages.
PART II. OTHER INFORMATION
Item 1. | Legal Proceedings (Continued) |
The seventh set of counts in the complaint are against law firm Sidley Austin LLP, attorney Neal Sullivan, and the “Doe” defendants for aiding and abetting securities fraud (Thirty-Seventh Count), aiding and abetting fraud (Thirty-Eighth Count), aiding and abetting breach of fiduciary duty (Thirty-Ninth Count), negligent misrepresentation (Fortieth Count), professional negligence (Forty-First Count), and aiding and abetting conversion (Forty-Second Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $500 million, as well as for punitive damages.
The eighth set of counts in the complaint are against law firm Davis Graham & Stubbs LLP, attorney S. Lee Terry, Jr., and the “Doe” defendants for aiding and abetting securities fraud (Forty-Third Count), aiding and abetting fraud (Forty-Fourth Count), aiding and abetting breach of fiduciary duty (Forty-Fifth Count), negligent misrepresentation (Forty-Sixth Count), professional negligence (Forty-Seventh Count), and aiding and abetting conversion (Forty-Eighth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $200 million, as well as for punitive damages.
The ninth set of counts in the complaint are against law firm Robinson & Cole LLP, attorney Shant Chalian, and the “Doe” defendants for aiding and abetting securities fraud (Forty-Ninth Count), aiding and abetting fraud (Fiftieth Count), aiding and abetting breach of fiduciary duty (Fifty-First Count), negligent misrepresentation (Fifty-Second Count), professional negligence (Fifty-Third Count), and aiding and abetting conversion (Fifty-Fourth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $5 million, as well as for punitive damages.
The tenth set of counts in the complaint are against law firm Finn Dixon & Herling LLP, attorney Reed Balmer, and the “Doe” defendants for aiding and abetting securities fraud (Fifty-Fifth Count), aiding and abetting fraud (Fifty-Sixth Count), aiding and abetting breach of fiduciary duty (Fifty-Seventh Count), negligent misrepresentation (Fifty-Eighth Count), professional negligence (Fifty-Ninth Count), and aiding and abetting conversion (Sixtieth Count). These defendants are alleged to be jointly and severally liable for rescission of investors’ purchases of securities and for damages in an amount believed to be in excess of $5 million, as well as for punitive damages.
PART II. OTHER INFORMATION (CONTINUED)
Item 1. | Legal Proceedings (Continued)
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The eleventh set of counts in the complaint are against law firms Halloran & Sage LLP; Balcomb & Green, P.C.; Rome McGuigan, P.C.; Haight Brown & Bonesteel LLP; Bailey Cavalieri LLC; Sidley Austin LLP; Davis Graham & Stubbs LLP; Robinson & Cole LLP; and Finn Dixon & Herling LLP; attorney Jon H. Freis, and the “Doe” defendants for actual-intent fraudulent transfer (Sixty-First Count) and constructive fraudulent transfer (Sixty-Second Count). These defendants are alleged to be liable for damages in an amount believed to be in excess of $5 million, as well as for provisional remedies, avoidance of the transfers, and punitive damages.
The case was designated as a complex matter on December 18, 2019, and was assigned to the Honorable Amy Hogue.
On DecemberMarch 20, 2019,2020, two sets of defendants – Sidley Austin LLP and Neal Sullivan; and Davis Graham & Stubbs LLP and S. Lee Terry, Jr. – filed special motions to strike the portions of the complaint directed at them under a California statute (Civil Procedure Code section 425.16) that permits defendants to bring early challenges to causes of action against them that allegedly arise from protected litigation activity if those causes of action lack minimal merit. The defendants that filed these special motions to strike asserted that the claims against them arise from communicative conduct in the course of quasi-judicial proceedings, such as regulatory inquiries, and that the Trust cannot establish a likelihood of prevailing on its claims against them. The Trust opposed these motions, and the matters were heard on July 28, 2020, and taken under submission on that date. On August 14, 2020, the Court entered orders: (i) granting the motion to strike filed by Sidley Austin LLP and Neal Sullivan, and (ii) granting in part and denying in part the motion to strike filed by Davis Graham & Stubbs LLP and S. Lee Terry, Jr. In September 2020, the Trust filed notices of appeal of the foregoing orders, and Davis Graham & Stubbs LLP and S. Lee Terry, Jr. subsequently filed a cross-appeal.
On April 13, 2020, four sets of defendants – Rome McGuigan, P.C. and Brian Courtney; Bailey Cavalieri LLC and Thomas Geyer; Robinson & Cole LLP and Shant Chalian; and Finn Dixon & Herling LLP and Reed Balmer – filed motions to quash the service of summonses. The defendants that filed these motions asserted that they are not subject to suit in California because they do not have sufficient contacts with California to justify a California court’s exercise of jurisdiction over them. The Trust opposed these motions, and the matters were heard in part on July 15, 2020 and in part on July 20, 2020, and (with exception of the motion filed by Finn Dixon & Herling LLP and Reed Balmer) were taken under submission on July 20, 2020. The motion filed by Finn Dixon & Herling LLP and Reed Balmer was taken off calendar prior to July 20, 2020, and the parties thereafter reached a confidential settlement that is in the process of being documented. On July 21, 2020, the Court entered orders granting the motions to quash filed by Rome McGuigan, P.C. and Brian Courtney; Bailey Cavalieri LLC and Thomas Geyer; and Robinson & Cole LLP and Shant Chalian. On September 10, 2020, the Trust filed a notice of appeal of the foregoing orders.
PART II. OTHER INFORMATION
Item 1. | Legal Proceedings (Continued) |
On June 16, 2020, the Trust reached a confidential settlement with Balcomb & Green, P.C. and Lawrence R. Green. On July 6, 2020, these defendants filed a motion seeking the Court’s determination that the settlement was made in good faith under a California statute (Civil Procedure Code section 877.6) that permits settling defendants to seek a good faith settlement finding in order to bar any other defendant from seeking contribution or indemnity. The motion was unopposed, and the Court entered an order granting it on August 12, 2020.
On October 28, 2020, the Trust filed a federal lawsuit against four defendants that prevailed on the motions to quash service of summons in the California state court action (Rome McGuigan, P.C.; Brian Courtney; Bailey Cavalieri LLC; and Thomas Geyer), as well as a fifth defendant (Ivan Acevedo), and certain “Doe” defendants.” The case is styled Goldberg v. Rome McGuigan, P.C., et al., Case No. 2:20-cv-09958-JFW-SK (C.D. Cal.). The complaint contains counts for (i) violations of section10(b) of the Exchange Act and Rule 10b-5; (i) aiding and abetting fraud; (iii) aiding and abetting breach of fiduciary duty; (iv) negligent misrepresentation; (v) professional negligence; (vi) aiding and abetting conversion; (vii) actual fraudulent transfer; and (viii) constructive fraudulent transfer. The conduct challenged in the complaint includes certain of the same conduct challenged in the California state court action, and a footnote in the complaint explains: “Plaintiff filed an action in Los Angeles Superior Court against [four of these defendants] raising some of the claims asserted in this action. Those defendants filed a motion to quash service, alleging that the court entered an initial status conference order setting a status conference for February 28, 2020.did not have personal jurisdiction. The Court granted those motions, and Plaintiff appealed. Plaintiff brings this action to preserve his rights and ensure that his claims against [the defendants] are adjudicated on the merits. Should the state court appeal be successful, resulting in two cases being simultaneously litigated on the merits in two forums, [plaintiff] will consider dismissing this action and litigating the case in state court.”
Comerica Bank litigation. There are two pending actions in the United States District Court for the Central District of California against Comerica Bank, the institution at which the Debtors maintained all of their bank accounts, alleging various causes of action:
(1) In re Woodbridge Investments Litigation, Case No. 2:18-cv-00103-DMG-MRW (C.D. Cal.), is a consolidated class action (Class Action) in the United States District Court for the Central District of California (California District Court) brought on behalf of former Noteholders and Unitholders against Comerica Bank. It is comprised of five separate lawsuits filed between January 4, 2018 and April 26, 2018. The five lawsuits were consolidated, Lead Class Counsel was appointed, and Lead Class Counsel filed a Consolidated Class Action Complaint on September 19, 2019. The Consolidated Class Action Complaint assertsasserted claims for aiding and abetting fraud (Count 1), aiding and abetting breach of fiduciary duty (Count 2), negligence (Count 3), and violations of California’s unfair competition law (Count 4).
On November 1, 2019, Comerica moved to dismiss the Consolidated Class Action Complaint under Federal Rule of Civil Procedure 12(b)(6) (failure to state a claim upon which relief can be granted) and Federal Rule of Civil Procedure 12(b)(1) (lack of subject matter jurisdiction). With respect to Count 1 (aiding and abetting fraud) and Count 2 (aiding and abetting breach of fiduciary duty), Comerica arguesargued that the Class Plaintiffs’ allegations dodid not demonstrate that Comerica had actual knowledge of the underlying fraud and breach of fiduciary duty that Comerica is alleged to have aided and abetted; with respect to Count 3 (negligence), Comerica arguesargued that there is no duty of care owed to non-customers of Comerica; and with respect to Count 4 (California Unfair Competition Law), Comerica arguesargued that a claim for unfair competition fails when there is no actual knowledge of fraud or breach of fiduciary duty and no duty owed. In addition, Comerica arguesargued that all causes of action failfailed to state a claim for the additional reason that Comerica’s filing or non-filing of a Suspicious Activity Report (SAR) under federal law cannot support any of the causes of action, and that the court lacksCourt lacked subject matter jurisdiction because all of the causes of action belong to the Liquidation Trust such that the Class Plaintiffs lack standing to pursue them. As of December 31, 2019,
On August 5, 2020, the Court entered an order granting in part and denying in part Comerica’s motion to dismiss. The Court denied Comerica’s request to dismiss Counts 1 and 2 on the ground that the allegations of the Consolidated Class Action Complaint sufficiently alleged that Comerica had the requisite knowledge of the underlying fraud and breach of fiduciary duty. The Court granted Comerica’s request to dismiss Count 3 on the ground that the allegations of the Consolidated Class Action Complaint did not sufficiently allege a duty of care owed to non-customers of Comerica. On Count 4, the Court granted the motion to dismiss to the extent it relied on a failure to file a SAR (which claim the Court found was scheduled for hearingpreempted by federal law, which prohibits disclosure of a SAR), but denied the motion to dismiss to the extent the complaint relied on January 24, 2020. violations arising from non-SAR-related conduct, and the Court granted the class leave to amend the complaint. The Court also denied Comerica’s request to dismiss based on Comerica’s allegations that the class lacked standing and that the Trust cannot be a member of a class, finding instead that the class has plausibly alleged standing to sue, and that the question of whether the Trust can be a class member did not need to be answered at this stage.
PART II. OTHER INFORMATION
Item 1. | Legal Proceedings (Continued) |
On January 22,August 26, 2020, the court entered an order determining thatputative class filed a First Amended Consolidated Class Action Complaint, which asserted claims for aiding and abetting fraud (Count 1), aiding and abetting breach of fiduciary duty (Count 2), and violations of California’s unfair competition law (Count 3). Comerica answered the motion is appropriate for decision without oral argument, taking the matter under submission. No ruling has yet been issued.First Amended Consolidated Class Action Complaint on September 16, 2020.
The Trust holdsTrustee asserts that he is a beneficial interestmember of approximately 60% of this action based on the claims contributed to the Trust by former Noteholdersputative class and Unitholders.Comerica disputes that assertion.
(2) Goldberg vs. Comerica Bank, Adv. Pro. No. 20-ap-50452-BLS (Bankr.D.Del.(Bankr. D. Del., originally filed Apr. 26, 2019 in California and transferred on February 5, 2020 to Delaware), is an action by the Trust against Comerica Bank alleging fraudulent transfer liability under the California Civil Code. The Trust’s complaint also incorporates the claims asserted against Comerica Bank in the class action (referenced in paragraph (1) above) to the extent that such claims are ultimately determined to belong to the Trust rather than to individual former Noteholders and Unitholders.
PART II. OTHER INFORMATION (CONTINUED)
Item 1. | Legal Proceedings (Continued)
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On June 28, 2019, Comerica filed three motions: (i) a motion to transfer venue to the Bankruptcy Court; (ii) alternatively, a motion to dismiss the action for failure to state a claim; and (iii) a motion to strike the portion of the Complaint that incorporates the class action claims. Comerica argued that venue should be transferred to the Bankruptcy Court on the grounds that, inter alia, that court is familiar with the facts underlying the litigation and is best positioned to adjudicate it. In the alternative, in the event that the court declines to transfer venue, Comerica argued that the Complaint should be dismissed on the grounds that, among other grounds, (i) the Trust’s claims are barred by the doctrine of in pari delicto, and (ii) the transfers that the Trust seeks to recover are not avoidable as a matter of law because the payment of a secured banking obligation cannot be the subject of a fraudulent transfer claim.
On July 22, 2019, the Trust filed its omnibus opposition to the three Comerica motions. On September 19, 2019, the court entered an order finding that the motions were appropriate for decision without oral argument and taking them under submission. As of December 31, 2019, the motions remained under submission. On February 5, 2020, the court entered an order granting Comerica’s motion to transfer the case to the Bankruptcy Court in Delaware, and denying the remaining two motions (to dismiss and to strike) as moot in light of the transfer, without prejudice to renewal by Comerica in the Bankruptcy Court. On February 6, 2020, the Bankruptcy Court opened the above-referenced docket number for the transferred case. On March 23, 2020, the Trust and Comerica filed a stipulation, which was approved by the Bankruptcy Court, agreeing to stay the action pending disposition of the motion to dismiss the class action (referenced in paragraph (1) above). On September 3, 2020, the Trust and Comerica filed a stipulation, which was also approved by the Bankruptcy Court, agreeing to further stay the action until thirty days after the California District Court enters a scheduling order in the Class Action. Within thirty days after the entry of such a scheduling order, the parties will confer and submit a joint proposed scheduling order, or (if they cannot agree) will make a joint submission with each party’s competing proposal as to any areas of disagreement for the Bankruptcy Court’s consideration.
Avoidance actions. The Trust is currently prosecuting numerous legal actions and informally pursuing numerous other potential legal actions, to object to, subordinate, and/or reclassify claims asserted against the Debtors and/or to recover preferential payments, fraudulent transfers, and other funds subject to recovery by the bankruptcy estate. The Trust has filed approximately 490 legal actions of this nature. These actions were filed in the United States Bankruptcy Court for the District of Delaware, are pending before the Honorable Brendan L. Shannon, and generally fall into the following categories:
Preferential transfers. Certain of the actions include claims arising under chapter 5 of the Bankruptcy Code, and seek to avoid or recover payments made by the Debtors during the 90 days prior to the December 4, 2017 bankruptcy filing, including payments to miscellaneous vendors and former Noteholders and Unitholders.
Fraudulent transfers (Interest to Noteholders and Unitholders). Certain of the actions include claims arising under chapter 5 of the Bankruptcy Code, and seek to avoid or recover payments made by the Debtors during the course of the Ponzi scheme (from July 2012 through the December 4, 2017 bankruptcy filing) for interest paid to former Noteholders and Unitholders.
Fraudulent transfers (Shapiro personal expenses). Certain of the actions include claims arising under chapter 5 of the Bankruptcy Code, and seek to avoid and recover payments made by the Debtors during the course of the Ponzi scheme (from July 2012 through the December 4, 2017 bankruptcy filing) for the personal expenses of Robert and Jeri Shapiro, including those identified in a forensic report prepared in connection with an SEC enforcement action in the United States District Court for the Southern District of Florida.
The Trust has filed approximately 490 legal actions of this nature, many of which have been resolved, resulting in recoveries by or judgments in favor of the Trust. As of October 31, 2020, approximately 268 of these legal actions were pending, 122 of which are in default status and for each of which the Trust is seeking a default judgment. Since inception and as of October 31, 2020, the Trust has obtained judgments of approximately $5.91 million and has entered into settlements in over 200 legal actions and with respect to another over 150 potential avoidance claims for which litigation was not filed, resulting in an aggregate of approximately $12.39 million of cash payments made or due to the Trust and approximately $8.99 million in reductions of claims against the Trust.
PART II. OTHER INFORMATION (CONTINUED)
Item 1. | Legal Proceedings (Continued) |
In addition, other legal proceedings are being prosecuted by the Trust and United States governmental authorities, which actions may result in recoveries in favor of the Trust. Such actions currently include:
Fraudulent transfers and fraud (against former agents). These actions, which arise under chapter 5 of the Bankruptcy Code and applicable state law governing fraudulent transfers, seek to avoid and recover payments made by the Debtors during the course of the Ponzi scheme (from July 2012 through the December 4, 2017 bankruptcy filing) for commissions to former agents, as well as for fraud, aiding and abetting fraud, and the unlicensed sale of securities asserted by the Trust based on claims contributed to the Trust by defrauded investors. These actions were filed by the Trust in the United States Bankruptcy Court for the District of Delaware between November 15, 2019 and December 4, 2019. Actions of this type are also being pursued by the SEC, and it is the Trust’s understanding that any recoveries obtained by the SEC will be transmitted to the Trust pursuant to a “Fair Fund” established by the SEC.
Actions regarding the Shapiro’s personal assets. On December 4, 2019, the Trust filed an action in the United States Bankruptcy Court for the District of Delaware, Adv. Pro. No. 10-51076 (BLS), Woodbridge Liquidation Trust v. Robert Shapiro, Jeri Shapiro, 3X a Charm, LLC, Carbondale Basalt Owners, LLC, Davana Sherman Oaks Owners, LLC, In Trend Staging, LLC, Midland Loop Enterprises, LLC, Schwartz Media Buying Company, LLC and Stover Real Estate Partners LLC. In this action, the Trust asserts claims under chapter 5 of the Bankruptcy Code and applicable state law for avoidance of preferential and fraudulent transfers together with claims for fraud, aiding and abetting fraud, the unlicensed sale of securities, breach of fiduciary duty and unjust enrichment. The Trust seeks to recover damages and assets held in the names of Robert Shapiro, Jeri Shapiro and their family members and entities owned or controlled by them, which assets the Trust contends are beneficially owned by the Debtors or for which the Debtors are entitled to recover based on the Shapiros’ defalcations, including over $20 million in avoidable transfers.
Criminal Proceeding and Forfeiture. In connection with the United States’ criminal case against Robert Shapiro (Case No. No. 19-20178-CR-ALTONAGA (S.D. Fla. 2019)), Shapiro agreed to the forfeiture of certain assets. The Trust is engagedfiled a petition in discussionsthe Florida court to claim the forfeited assets as property of the Debtors’ estates, and therefore as property that had vested in the Trust pursuant to the Plan. The Trust has entered into an agreement with the DOJ regarding the transferUnited States Department of Justice to resolve its claim. The agreement was approved by the DOJBankruptcy Court on September 17, 2020 and was approved by the United States District Court on October 1, 2020. Among other things, the agreement provides for the release of specified forfeited assets by the United States to the Trust, and for the Trust to liquidate those assets and distribute the net sale proceeds to Qualifying Victims, which include the vast majority of any forfeited assets for distribution to the Interestholders.Trust beneficiaries—specifically, all former holders of Class 3 and 5 claims and their permitted assigns—but do not include former holders of Class 4 claims.
Wind-Down Group Litigation. The Wind-Down Group owns a portfolio of real estate assets, which includes secured loans and other properties. As part of its recovery efforts, the Wind-Down Group, through its subsidiaries, is involved in ordinary routine litigation incidental to such assets.
PART II. OTHER INFORMATION (CONTINUED)
Please see the applicable risks in Item 1A of Amendment No. 2 to our Annual Report on Form 10 Registration Statement10-K filed with the SEC on January 6,September 28, 2020.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
In accordance with the Plan, all Liquidation Trust Interests have been issued without registration under the Securities Act. The Liquidation Trust Interests have been issued only to holders of allowed claims in Class 3, Class 4, and Class 5 entirely in exchange for such claims. See “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” of this Annual Report. As of September 30, 2020, the Trust has issued an aggregate of 11,519,450 Class A Liquidation Trust Interests and an aggregate of 676,312 Class B Liquidation Trust Interests. All Liquidation Trust Interests were issued on the Plan Effective Date andor from time to time thereafter as soon as practicable as and when claims in respect of which Liquidation Trust Interests were issuableClass 3, Class 4 or Class 5 have become allowed.
During the three months ended December 31, 2019,September 30, 2020, the Trust issued the following Liquidation Trust Interests:
Date of Sale | | Number of Class A Interests Sold | | | Number of Class B Interests Sold | | Nature of the Transaction | | Consideration Received | |
| | | | | | | | | | |
October 7, 2019 | | | 547.43 | | | | - | | Surrender of claims | | Surrender of claims | |
| | | | | | | | | | | | |
October 31, 2019 | | | 6,130.88 | | | | - | | Surrender of claims | | Surrender of claims | |
| | | | | | | | | | | | |
November 11, 2019 | | | 2,618.48 | | | | 608.16 | | Surrender of claims | | Surrender of claims | |
| | | | | | | | | | | | |
November 25, 2019 | | | 5,019.83 | | | | 1,780.82 | | Surrender of claims | | Surrender of claims | |
| | | | | | | | | | | | |
December 10, 2019 | | | 48,095.23 | | | | 18,243.02 | | Surrender of claims | | Surrender of claims | |
| | | | | | | | | | | | |
Total | | | 62,411.85 | | | | 20,632.00 | | | | | |
As of December 31, 2019 and February 12, 2020, the aggregate number of outstanding Class A Liquidation Trust Interests was 11,516,274 and the aggregate number of outstanding Class B Liquidation Trust Interests was 675,839.
Date of Sale | | Number of Class A Interests Sold | | | Number of Class B Interests Sold | | Nature of the Transaction | Consideration Received |
| | | | | | | | |
September 1, 2020 | | | 349.03 | | | | - | | | Allowance of claims |
| | | | | | | | | | |
September 25, 2020 | | | 3,136.35 | | | | 1,189.65 | | | Allowance of claims |
| | | | | | | | | | |
Total | | | 3,485.38 | | | | 1,189.65 | | | |
The issuance of Liquidation Trust Interests has occurred in reliance upon the exemption from the registration requirements of the Securities Act afforded by Section 1145(a)(1) of the Bankruptcy Code. Section 1145(a)(1) exempts the offer and sale of securities under a plan of reorganization from registration under the Securities Act and state securities laws and regulation if (i) the securities are offered and sold under a plan of reorganization and are securities of the debtor, of an affiliate of the debtor participating in a joint plan with the debtor, or of a successor to the debtor under the plan; (ii) the recipients of the securities hold a pre-petition or administrative claim against the debtor or an interest in the debtor; and (iii) the securities are issued entirely in exchange for the recipient’s claim against or interest in the debtor, or principally in such exchange and partly for cash or property. The Trust believes that the Liquidation Trust Interests are securities of a “successor” to the Debtors within the meaning of Section 1145(a)(1), and such securities were issued under the Plan entirely in exchange for allowed claims in Class 3, Class 4, and Class 5.
PART II. OTHER INFORMATION (CONTINUED)
Item 3. | Defaults upon Senior Securities |
None.
None.
None.
PART II. OTHER INFORMATION
Exhibit | Description |
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| First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and its Affiliated Debtors dated August 22, 2018, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019. |
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| Certificate of Trust of Woodbridge Liquidation Trust fileddated February 14 2019 and effective February 15, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019. |
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| Liquidation Trust Agreement of Woodbridge Liquidation Trust dated February 15, 2019, as amended by Amendment No. 1 dated August 21, 2019 and Amendment No. 2 dated September 13, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019. |
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| Amendment No. 3 to Liquidation Trust Agreement dated as of November 1, 2019, incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019. |
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| Amendment No. 4 to Liquidation Trust Agreement dated as of February 5, 2020, incorporated herein by reference to the Current Report on Form 8-K filed by the Trust on February 6, 2020. |
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| Amended and Restated Bylaws of Woodbridge Liquidation Trust effective August 21, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019. |
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| Limited Liability Company Agreement of Woodbridge Wind-Down Entity LLC dated February 15, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019. |
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| Loan and Security Agreement (Revolving Line of Credit) dated April 9, 2019 betweenJune 19, 2020 by and among WB Propco, LLC and First RepublicWB 141 S. Carolwood, LLC, as Borrowers, Woodbridge Wind-Down Entity LLC, as Guarantor, and City National Bank of Florida, as Lender, incorporated herein by reference to Amendment No. 1 to the Current Report on Form 8-K filed by the Trust on June 29, 2020. |
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| Amended and Restated Employment Agreement dated July 31, 2019 between Woodbridge Wind-Down Entity LLC and Frederick Chin, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019. |
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| First Amendment to Amended and Restated Employment Agreement dated September 24, 2020 between Woodbridge Wind-Down Entity LLC and Frederick Chin, incorporated herein by reference to the Form 10-K filed by the Trust on September 28, 2020. |
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| Indemnification Agreement dated February 27, 2019 between Woodbridge Wind-Down Entity LLC and Frederick Chin, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019. |
PART II. OTHER INFORMATION (CONTINUED)
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| Employment Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and Marion W. Fong, incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019. |
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| First Amendment to Employment Agreement dated September 24, 2020 between Woodbridge Wind-Down Entity LLC and Marion W. Fong, incorporated herein by reference to the Form 10-K filed by the Trust on September 28, 2020. |
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| Indemnification Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and Marion W. Fong, incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019. |
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| Employment Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, IIincorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019. |
PART II. OTHER INFORMATION
Item 6. | Exhibits (Continued) |
| First Amendment to Employment Agreement dated September 24, 2020 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, incorporated herein by reference to the Form 10-K filed by the Trust on September 28, 2020. |
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| Indemnification Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, II incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019. |
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| Stipulation and Settlement Agreement between the United States and Woodbridge Liquidation Trust, as approved by order of the United States Bankruptcy Court for the District of Delaware entered September 17, 2020, incorporated herein by reference to the Form 10-K filed by the Trust on September 28, 2020. |
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| Certification of Liquidation Trustee pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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| Certification of Liquidation Trustee pursuant to 18 U.S.C. 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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| Findings of Fact, Conclusions of Law, and Order Confirming the First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and its Affiliated Debtors, entered October 26, 2018, |
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*
| Incorporated incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019.
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**
| Incorporated by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019.
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*** XBRL | Incorporated by reference to the Current Report on Form 8-K filed by the Trust on February 6, 2020.
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*Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Woodbridge Liquidation Trust |
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Date: FebruaryNovember 13, 2020 | By: | /s/ Michael I. Goldberg |
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| Michael I. Goldberg, |
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| Liquidation Trustee |
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