8. Related Party Transactions
In addition to serving as GUC Trust Administrator, Wilmington Trust Company continues to serve as trustee pursuant to the indentures for certain series of
previously outstanding debt of MLC. Wilmington Trust Company has received and may receive in the future certain customary fees in amounts consistent with Wilmington Trust Companys standard rates for such service. The Bankruptcy Court
previously approved the creation of a segregated fund for the purposes of funding such fees for Wilmington Trust Company, as well as the other indenture trustees and fiscal and paying agents for previously outstanding debt of MLC. There were no such
fees for Wilmington Trust Company in the three months ended June 30, 2020 and 2019.
In addition, Wilmington Trust Company has entered into certain
arrangements with the GUC Trust pursuant to which it or its affiliates have previously received, and may in the future receive, reasonable and customary fees and commissions for services other than services in the capacity of GUC Trust
Administrator. Such arrangements include the provision of custodial, investment advisory and brokerage services to the GUC Trust. During the three months ended June 30, 2020 and 2019, the total amounts of such fees and commissions were approximately
$51,000 and $63,000, respectively.
Item 2. Managements Discussion and Analysis of Financial Condition and Results
The following addresses material changes in the net assets in liquidation of the Motors Liquidation Company GUC Trust,
or the GUC Trust, for its first fiscal quarter ended June 30, 2020. It is intended to be read in conjunction with the condensed financial statements of the GUC Trust included in Item 1 above, which we refer to as the financial statements. For
additional information about the purpose and administrative operations of the GUC Trust, see the disclosure in the notes to the financial statements filed with this Quarterly Report on Form 10-Q and in the
Annual Report on Form 10-K for the year ended March 31, 2020 filed by the GUC Trust with the SEC on June 3, 2020. A glossary of defined terms used in this Quarterly Report on Form 10-Q is provided under the heading Glossary below.
The GUC Trust is a successor to Motors Liquidation Company (which dissolved on December 15, 2011), or MLC, for the purposes of
Section 1145 of title 11 of the United States Code, or the Bankruptcy Code. The GUC Trust was initially formed on March 30, 2011, for the purposes of implementing the Second Amended Joint Chapter 11 Plan, or the Plan, of MLC and its
affiliated debtors-in-possession, or the Debtors, which was filed with the United States Bankruptcy Court for the Southern District of New York, or the Bankruptcy Court,
on March 18, 2011. The Plan subsequently became effective on March 31, 2011, or the Effective Date, and, on April 18, 2013, the Bankruptcy Court entered an order granting the GUC Trusts request for entry of a final decree
administratively closing each of the Debtors chapter 11 cases other than the chapter 11 case of MLC.
Functions and Responsibilities of the GUC
The functions and responsibilities of the GUC Trust are governed by the Plan and the Second Amended and Restated Motors
Liquidation Company GUC Trust Agreement, dated as of July 30, 2015, or the GUC Trust Agreement. The GUC Trust is administered by Wilmington Trust Company, not in its individual capacity but solely in its capacity as trust administrator and
trustee, or the GUC Trust Administrator. As set forth in the GUC Trust Agreement, the activities of the GUC Trust Administrator are overseen by FTI Consulting, Inc., solely in its capacity as trust monitor of the GUC Trust, or the GUC Trust Monitor.
Although the GUC Trust has no officers, directors or employees, the GUC Trust Administrator is authorized by the GUC Trust Agreement to engage professionals and other service providers to assist the GUC Trust Administrator in the administration of
the GUC Trust, or the GUC Trust Professionals. Accordingly, the GUC Trust and GUC Trust Administrator rely on receiving accurate information, reports and other representations from such professionals and service providers and from the GUC Trust
Among its other duties and obligations, the GUC Trust is obligated pursuant to the Plan and the GUC Trust Agreement to
(i) distribute the assets comprising the corpus of the GUC Trust to satisfy the general unsecured claims against the Debtors that are allowed pursuant to the Plan, or the Allowed General Unsecured Claims, (ii) prosecute and resolve
objections to the general unsecured claims against the Debtors that are disputed at a given time, or Disputed General Unsecured Claims, (iii) take all necessary actions to administer the wind-down of the affairs of the Debtors, and (iv) to
resolve and satisfy (to the extent allowed) the Residual Wind-Down Claims (as defined below) assumed by the GUC Trust.
and Distributable Assets of the GUC Trust
As of June 30, 2020, the principal assets comprising the corpus of the GUC Trust are
holdings of cash and cash equivalents and marketable securities resulting from the liquidation in July and August 2015 of the GUC Trusts previously held (i) shares of common stock of General Motors Company, or the New GM Common Stock,
(ii) warrants to acquire shares of New GM Common Stock at an exercise price of $10.00 per share that would have expired on July 10, 2016, or the New GM Series A Warrants, and (iii) warrants to acquire shares of New GM Common Stock at
an exercise price of $18.33 per share that would have expired on July 10, 2019, or the New GM Series B Warrants. The New GM Series A Warrants and the New GM Series B Warrants are referred to collectively as the New GM Warrants, and the New GM
Common Stock and the New GM Warrants are referred to collectively as the New GM Securities.
By order dated July 2, 2015, or the
Liquidation Order, the Bankruptcy Court approved the conversion of the GUC Trusts holdings of New GM Securities into cash. To effect such conversion, on July 7, 2015, the GUC Trust converted all of its holdings of New GM Warrants into New
GM Common Stock in a cashless exercise. In total, the GUC Trust converted (i) 10,352,556 New GM Series A Warrants into 7,407,155 shares of New GM Common Stock, and (ii) 10,352,556 New GM Series B Warrants into 4,953,635 shares of New GM Common
Stock. Thereafter, the GUC Trust sold all of its holdings of New GM Common Stock for net proceeds aggregating $741.7 million, having completed all such sales on August 5, 2015. As a result, all distributions by the GUC Trust thereafter in
respect of Allowed General Unsecured Claims (including in respect of the GUC Trust Units) have been and will be made solely in cash.