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☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

14140 Ventura Boulevard Suite 302 Sherman Oaks, California		91423
(Address of principal executive offices)		(Zip Code)

Title of each class		Name of each exchange on which registered
None		N/A

Large accelerated filer  ☐	Accelerated filer  ☐
Non-accelerated filer   ☐	Smaller reporting company ☒
(Do not check if smaller reporting company)	Emerging growth company ☒

		Page
Item 1.	Business	1
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	25
Item 2.	Properties	26
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	31
Part II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	31
Item 6.	Selected Financial Data	33
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 8.	Financial Statements and Supplementary Data	39
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	39
Item 9A.	Controls and Procedures	40
Item 9B.	Other Information	40
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	40
Item 11.	Executive Compensation	43
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	49
Item 13.	Certain Relationships and Related Transactions, and Supervisory Board Member Independence	49
Item 14.	Principal Accounting Fees and Services	51
Part IV
Item 15.	Exhibits and Financial Statement Schedules	53

Item 1.

Business

A.

Overview

	Date		$ per Class A				Distributions Declared ($ in millions) During the Period from February 15, 2019 (inception) through
	Declared		Interest				June 30, 2020				September 25, 2020
Distributions Declared
First	3/15/2019		$	3.75			$	44.70			$	44.70
Second	1/2/2020			4.50				53.43				53.43
Third	3/31/2020			2.12				25.00				25.00
Fourth	7/13/2020			2.56				-				29.93
Total			$	12.93			$	123.13			$	153.06

B.	Organization of the Company

•

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.

•

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.

D.	Plan Provisions Regarding the Company

1.	Corporate governance provisions

•

“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.

•

“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.

•

Standard Note Claims (Class 3)

•

General Unsecured Claims (Class 4)

•

Unit Claims (Class 5)

•

Each holder of an allowed claim in Class 3 (Standard Note Claims) is deemed to hold one (1) Class A Liquidation Trust 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 Liquidation Trust 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 Liquidation Trust Interest and 0.275 of a Class B Liquidation Trust Interest for each $75.00 of Net Unit Claims held by the applicable Unitholder with respect to its allowed Unit Claims.

3.	Assets and liabilities of the Company

•

liquidate any and all Trust assets;

•

pursue the Causes of Action, including preference, fraudulent conveyance, and other avoidance actions, lender liability claims, fraud claims and breach of fiduciary duty claims;

•

resolve, either consensually or through litigation, all disputed Claims asserted against the Debtors; and

•

make all distributions required under the Plan.

		Estimated Allowed Claims				Disputed Claims at Asserted Amount
Unimpaired Claims (Liabilities)		$	0.09			$	0.81
Impaired Claims (Beneficial Interests)		$	893.56			$	18.73

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4.	Liquidation Trust Interests under the Plan

•

In the case of an allowed claim in the Plan’s Class 3 (Standard Note Claims), the holder was granted one (1) Class A Liquidation Trust 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.

•

In the case of an allowed claim in the Plan’s Class 4 (General Unsecured Claims), the holder was granted one (1) Class A Liquidation Trust 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 Liquidation Trust Interest in the Trust and 0.275 of a Class B Liquidation Trust 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.

								During the Period from February 15, 2019 (inception) through June 30, 2020 ($ in Millions)												During the Period from February 15, 2019 (inception) through September 25, 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				-				-				-				29.93				29.20				0.73
	Subtotal			$	12.93			$	123.13			$	117.70			$	5.43			$	153.06			$	146.90			$	6.16
	Distributions Reversed
(a)	Disallowed																(1.65	)											(1.75	)
(b)	Returned																0.15												0.27
	Subtotal																(1.50	)											(1.48	)
(c)	Distributions Paid from Reserve Account																(1.56	)											(1.58	)
Distributions Payable, Net												as of 6/30/2020:				$	2.37							as of 9/25/2020:				$	3.10

(a)

As a result of claims being disallowed.

(b)

Distribution checks returned or not cashed.

(c)

Paid as claims are allowed or resolved.

•

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

•

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

•

Thereafter, to each Interestholder of a Liquidation Trust Interest (whether a Class A Liquidation Trust Interest or a Class B Liquidation Trust 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.

E.	Operations and Management of the Company

•

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;

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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;

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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;

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

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

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

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

•

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

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

•

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.

2.	The Wind-Down Group

•

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;

•

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;

•

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.

3.	Current year plan of operations

4.	Termination and dissolution of the Company

F.	Access to Information

Item 1A.

Risk Factors

•

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

•

Failure of the Wind-Down Entity to maintain compliance with any financial covenants under its revolving line of credit;

•

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.

Item 1B.

Unresolved Staff Comments

Item 2.

Properties

Address

City

Area

State

Zip

Sq. Ft.

Lot Size (Acres)

Development Properties3

41 King Street

New York

Hudson Square

NY

10014

6,400

.30

2600 Hutton

Los Angeles

Beverly Hills

CA

90210

6,500

.73

10733 Stradella

Los Angeles

Bel Air

CA

90077

6,500

2.52

1520 Carla Ridge

Beverly Hills

Trousdale Estates

CA

90210

7,200

.42

1484 Carla Ridge

Beverly Hills

Trousdale Estates

CA

90210

10,000

.58

642 St. Cloud Road

Los Angeles

Bel Air

CA

90077

29,000

1.07

638 Siena Way

Los Angeles

Bel Air

CA

90077

17,400

.85

Available for Sale4

1471 Forest Knoll Drive

Los Angeles

Hollywood Hills

CA

90069

11,000

.89

141 S. Carolwood Drive5

Los Angeles

Holmby Hills

CA

90024

12,200

9.51

Item 3.

Legal Proceedings

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•

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.

•

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 filed a petition in the Florida court to claim the forfeited assets as property of the Debtors’ estates, and therefore as property that had vested in the Trust pursuant to the Plan.  The Trust has agreed to the terms and form of an agreement with the United States Department of Justice to resolve its claim. The agreement was approved by the Bankruptcy Court on September 17, 2020. The agreement remains subject to approval by the United States District Court. Among other things, the agreement provides for the release of specified forfeited assets by the United States to the Trust, and for the Trust to liquidate those assets and distribute the net sale proceeds to Qualifying Victims, which include the vast majority of Trust beneficiaries—specifically, all former holders of Class 3 and 5 claims and their permitted assigns—but do not include former holders of Class 4 claims.

Item 4.

Mine Safety Disclosures

Date of Sale		Number of Class A Interests Sold				Number of Class B Interests Sold			Nature of the Transaction	Consideration Received
May 1, 2020			2,806.29				-		Allowance of claims	Allowance of claims
June 12, 2020			895.44				-		Settlement of claims	Settlement of claims
Total			3,701.73				-

Item 6.

Selected Financial Data

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

		Number Outstanding as of
		September 25, 2020				June 30, 2020
Class A Liquidation Trust Interests			11,519,450				11,518,232
Class B Liquidation Trust Interests			676,312				675,558

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			11,334
Distributions declared, net			(76,788	)
Net change in assets and liabilities			(65,454	)
Net assets in liquidation, as of June 30, 2020		$	264,517

Settlement recoveries recognized, net		$	5,061
Sales proceeds in excess of carrying value			19,964
Remeasurement of assets and liabilities, net			(16,970	)
Reduction of state, local and other taxes			2,890
Other			389
Change in carrying value of assets and liabilities, net		$	11,334

•

Declared distributions of $4.50 and $2.12 per Class A Liquidation Trust Interest, which totaled approximately $53.43 million and approximately $25.00 million, respectively.

•

Completed construction of four single-family homes (25210 Jim Bridger, 1241 Loma Vista, 24055 Hidden Ridge, 1471 Forest Knoll). The 1241 Loma Vista and 24055 Hidden Ridge single-family homes were sold during the year ended June 30, 2020. The 25210 Jim Bridger single-family home was sold in August 2020.

•

Sold twelve single-family homes, 33 lots, settled three secured loans and sold two other properties for net proceeds of approximately $201.33 million.

•

Adopted a strategy to auction certain secured loans and other properties. As a result of this change in strategy, the net carrying value of was reduced by approximately $2.53 million.  As a result of the lack of interest during the auction process, the Wind-Down Entity will no longer be pursuing recoveries related to 13 secured loans that had a total carrying value of approximately $0.57 million.

•

Paid construction costs of approximately $45.21 million relating to the single-family homes under development.

•

Paid holding costs of approximately $9.22 million.

•

Signed agreements to settle Causes of Action of approximately $5.32 million.

•

Paid general and administrative costs of approximately $24.47 million, including approximately $14.45 million professional fees, approximately $4.46 of payroll and related costs and approximately $1.08 million of board member fees and expenses.

•

Paid professional fees incurred before the Plan Effective Date of approximately $.50 million.

•

Recorded additional accrued liquidation costs, of approximately $7.90 million, net, consisting primarily of additional estimated holding and general and administrative costs as a result of the extension of the estimated timing for the completion of the Wind Down Entity’s operations.  These additional costs are partially a result of the COVID-19 pandemic.

Assets
Real estate assets held for sale:
Single-family homes under development		$	361,000
Real estate assets available for sale:
Single-family homes			186,119
Lots			45,910
Secured loans			9,707
Other properties			15,392
Subtotal			257,128
Real estate assets held for sale			618,128
Closing and other costs			(35,418	)
Real estate assets held for sale, net			582,710
Cash			36,020
Restricted cash			317
Other assets			2,297
Total assets		$	621,344
Liabilities
Accounts payable and accrued expenses		$	5,785
Accrued liquidation costs			232,067
Total liabilities		$	237,852
Net Assets in Liquidation		$	383,492

Net assets contributed on February 15, 2019		$	383,492
Change in assets and liabilities:
Changes in carrying value of assets and liabilities			(8,835	)
Distributions declared			(44,686	)
Net change in assets and liabilities			(53,521	)
Net assets in liquidation, as of June 30, 2019		$	329,971

Revaluation of real estate		$	(21.60	)
Decrease in construction costs accrued			12.32
Other			.45
		$	(8.83	)

•

Declared a distribution of $3.75 per Class A Liquidation Trust Interest, which totaled approximately $44.70 million.

•

Completed construction of two single-family homes (1966 Carla Ridge and 25211 Jim Bridger). These homes were listed for sale as of June 30, 2019.

•

Paid construction costs of approximately $22.48 million relating to the single-family homes under development.

•

Sold five single-family homes, 58 lots, settled two secured loans and sold three other properties for net proceeds of approximately $80.30 million.

•

Signed agreements to settle Causes of Action of approximately $1.66 million.

•

Received Fair Funds Recoveries from the SEC of approximately $1.24 million.

•

Paid holding and financing costs of approximately $3.50 million.

•

Paid general and administrative costs of approximately $6.99 million, including approximately $.49 million of board member fees and expenses and approximately $3.58 million of post Plan Effective Date professional fees.

•

Paid professional fees incurred before the Plan Effective Date of approximately $5.43 million.

•

Recorded additional accrued liquidation costs, of approximately $3.17 million (net), consisting primarily of the CEO’s bonus accrual and additional state taxes for periods before the Plan Effective Date.

•

Revolving Line of Credit:  The Company’s revolving line of credit  matured on May 1, 2020. On June 19, 2020, two wholly-owned subsidiaries of the Wind-Down Entity entered into a $25,000,000 revolving line of credit (New LOC). The New LOC may be increased to up to $30,000,000 with the pledge of one or more additional properties and lender approval. The New LOC matures on June 19, 2022 but may be extended for one additional year thereafter. The New LOC requires 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 New LOC is secured by a deed of trust on one property, the personal property associated therewith and the interest reserve. The Wind-Down Entity is the guarantor of the New LOC. The Company is required to keep $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 are required to comply with various covenants.  As of June 30, 2020, no amounts were outstanding under the New LOC.

•

Sales of Real Estate:  The Wind-Down Group is in the process of developing, marketing and selling its real estate assets, all of which are held for sale, with the exception of the eight single family homes which were under development as of June 30, 2020. There can be no assurance as to the amount of net proceeds that the Company will receive from the sale of its real estate assets or when the net sales proceeds will be received. The net proceeds from the sales of real estate for the year ended June 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.

•

Recoveries:  During the year ended June 30, 2020, the Company recognized approximately $5.32 million from the settlement of Causes of Action. There can be no assurance that the amounts the Company recovers from settling Causes of Action, from Fair Funds Recoveries and Forfeited Asset Recoveries in the future will be consistent with the amount recovered during the year ended June 30, 2020.

(a)

As a result of claims being disallowed.

(b)

Distribution checks returned or not cashed.

(c)

Paid as claims are allowed or resolved.

•

Liquidation Basis of Accounting:  Under 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 be received upon the disposition of the assets (on an undiscounted basis). Liabilities are measured in accordance with US GAAP that otherwise applies to those liabilities.  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.

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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.

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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.

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Changes in Carrying Value:  On a quarterly basis, the Company reviews the net realizable values and liquidation costs and record any significant variances. 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 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 include a change to the accrued liquidation costs related to the asset.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Item 9.

Changes In and Disagreements With Accountants On Accounting and Financial Disclosure

Item 9A.

Controls and Procedures

Item 9B.

Other Information