QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employment Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer ☐
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Accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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PART I. FINANCIAL INFORMATION
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Item 1.
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1 | ||
2 | |||
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3 | ||
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Item 2.
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19 | |
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Item 3.
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27 | |
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Item 4.
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27 | |
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PART II. OTHER INFORMATION
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Item 1.
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28 | |
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Item 1A.
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34 | |
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Item 2.
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34
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Item 3.
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34 | |
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Item 4.
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34
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Item 5.
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34 | |
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Item 6.
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35 |
PART I. |
FINANCIAL INFORMATION
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Item 1. |
Financial Statements
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Woodbridge Liquidation Trust and Subsidiaries
Consolidated Statements of Net Assets in Liquidation
As of September 30, 2021 and June 30, 2021
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(Unaudited, $ In Thousands)
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9/30/2021
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6/30/2021
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|||||||
Assets
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||||||||
Real estate assets held for sale, net (Note 3)
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||||||||
Single-family homes
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$
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$
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|
||||
Other real estate assets
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||||||
Subtotal
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||||||
Cash and cash equivalents
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||||||
Restricted cash (Note 4)
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|||||||
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||||||||
Other assets (Note 5)
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Total assets
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$
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$
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|
||||
Liabilities
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||||||||
Accounts payable and accrued liabilities
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$
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$
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|
||||
Distributions payable
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|
||||||
Accrued liquidation costs (Note 6)
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|
||||||
Total liabilities
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$
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$
|
||||||
Commitments and contingencies (Note 14)
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||||||||
Net Assets in Liquidation
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||||||||
Restricted for Qualifying Victims (Note 7)
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$ |
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$ |
|
||||
All Interestholders
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|
|
||||||
Total net assets in liquidation
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$
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$
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Woodbridge Liquidation Trust and Subsidiaries
For the Three Months Ended September 30, 2021 and 2020
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(Unaudited, $ in Thousands)
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Three Months Ended September 30, 2021
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Three Months Ended September 30, 2020
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|||||||||||||||||||||||
Restricted
For Qualifying
Victims
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All
Interestholders
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Total
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Restricted
For Qualifying
Victims
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All
Interestholders
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Total
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|||||||||||||||||||
Net Assets in Liquidation as of beginning of period
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$
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|
$
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|
$
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|
$
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$ | $ | ||||||||||||||
Change in assets and liabilities (Note 8):
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||||||||||||||||||||||||
Restricted for Qualifying Victims -
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||||||||||||||||||||||||
Change in carrying value of assets and liabilities, net
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|||||||||||||||||||
All Interestholders:
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||||||||||||||||||||||||
Change in carrying value of assets and liabilities, net
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|
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||||||||||||||||||
Distributions (declared) reversed, net
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(
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)
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(
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)
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||||||||||||||||
Net change in assets and liabilities
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(
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)
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(
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)
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||||||||||||||||
Net Assets in Liquidation as of end of period
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$
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|
$
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|
$ |
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$
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|
$
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|
$
|
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1)
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Formation and Description of Business
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Item 1.
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Financial Statements (Continued)
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2) |
Summary of Significant Accounting Policies
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Item 1.
|
Financial Statements (Continued)
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Item 1.
|
Financial Statements (Continued)
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Item 1.
|
Financial Statements (Continued)
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3) |
Real Estate Assets Held for Sale
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September 30, 2021
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June 30, 2021
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|||||||||||||||||||||||||||||||
Number
of Assets
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Gross Value
|
Closing and Other Costs
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Net Value
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Number
of Assets
|
Gross Value
|
Closing and Other Costs
|
Net Value
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|||||||||||||||||||||||||
Single-family homes
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|
$
|
|
$
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(
|
)
|
$
|
|
|
$
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|
$ | ( |
) |
$
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|
||||||||||||||||
Other real estate assets:
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||||||||||||||||||||||||||||||||
Secured loans
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(
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)
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|
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(
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)
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||||||||||||||||||||||
Other properties
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|
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(
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)
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|
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(
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)
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||||||||||||||||||||||
Subtotal
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(
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)
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(
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)
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||||||||||||||||||||||
Total
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$
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|
$
|
(
|
)
|
$ |
|
$
|
|
$
|
(
|
)
|
$
|
|
Item 1.
|
Financial Statements (Continued)
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4) |
Restricted Cash
|
September 30, 2021
|
June 30, 2021
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|||||||
|
||||||||
Distributions restricted by the Company related to unresolved claims, distributions for recently allowed claims, uncashed distribution checks, distributions withheld due to pending
avoidance actions and distributions that the Trust is waiting for further beneficiary information
|
$
|
|
$ |
|
||||
Forfeited Assets (Note 7) | ||||||||
Interest reserve (Note 9)
|
|
|
||||||
Total restricted cash
|
$
|
$ |
5) |
Other Assets
|
September 30, 2021
|
June 30, 2021
|
|||||||
Escrow receivables (a) | $ |
$ |
||||||
Forfeited Assets (Note 7)
|
|
|
|
|
||||
Settlement installment receivables, net (b)
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|
|||||||
Other
|
|
|
||||||
Total other assets
|
$
|
|
$
|
Item 1.
|
Financial Statements (Continued)
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6) |
Accrued Liquidation Costs
|
September 30, 2021
|
June 30, 2021
|
|||||||
Development costs:
|
||||||||
Construction costs
|
$
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|
$
|
|
||||
Construction warranty
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|
|
||||||
Indirect costs
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|
|
||||||
Bond refunds
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(
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)
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(
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)
|
||||
Total development costs
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|
|
||||||
Holding costs:
|
||||||||
Property tax
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||||||
Insurance
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|
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||||||
Maintenance, utilities and other
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||||||
Total holding costs
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||||||
General and administrative costs:
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||||||||
Legal and other professional fees
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|
|
||||||
Payroll and payroll-related
|
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||||||
Directors and officers insurance | ||||||||
State, local and other taxes
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|
||||||
Board fees and expenses
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||||||
Other
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|
|
||||||
Total general and administrative costs
|
|
|
||||||
Total accrued liquidation costs
|
$
|
|
$
|
|
7)
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Forfeited Assets - Restricted for Qualifying Victims
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Item 1.
|
Financial Statements (Continued)
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September 30, 2021
|
June 30, 2021
|
|||||||
Restricted cash (Note 4)
|
$
|
|
$
|
|
||||
Other assets (Note 5)
|
|
|
||||||
Accrued liquidation costs
|
(
|
)
|
(
|
)
|
||||
Net assets in liquidation - restricted for Qualifying Victims
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$
|
|
$
|
|
8)
|
Net Change In Assets and Liabilities
|
Cash
Activities
|
Remeasure-
ment
|
Total
|
||||||||||
Real estate assets held for sale, net
|
$
|
|
$
|
|
$
|
|
||||||
Cash and cash equivalents |
|
|
|
|||||||||
Restricted cash
|
(
|
)
|
|
(
|
)
|
|||||||
Other assets
|
|
|
|
|||||||||
Total assets
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Accounts payable and accrued liabilities
|
$ |
$
|
|
$
|
|
|||||||
Accrued liquidation costs
|
(
|
)
|
|
(
|
)
|
|||||||
Total liabilities
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Change in carrying value of assets and liabilities, net
|
$
|
|
$
|
|
$
|
|
Item 1.
|
Financial Statements (Continued)
|
Cash
Activities
|
Remeasure-
ment
|
Total
|
||||||||||
Real estate assets held for sale, net
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Cash and cash equivalents
|
|
|
|
|||||||||
Restricted cash
|
|
|
|
|||||||||
Other assets
|
(
|
)
|
|
|
||||||||
Total assets
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Accounts payable and accrued liabilities
|
$
|
|
$
|
|
$
|
|
||||||
Accrued liquidation costs
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Total liabilities
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Change in carrying value of assets and liabilities, net
|
$
|
|
$
|
|
$
|
|
Distributions declared
|
$
|
|
|
|
Distributions reversed
|
|
|||
Distributions (declared) reversed, net
|
$
|
|
Item 1.
|
Financial Statements (Continued)
|
Cash
Activities
|
Remeasure-
ment
|
Total
|
||||||||||
Real estate assets held for sale, net
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Cash and cash equivalents |
|
|
|
|||||||||
Restricted cash
|
|
|
|
|||||||||
Other assets
|
(
|
)
|
|
(
|
)
|
|||||||
Total assets
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Accounts payable and accrued liabilities
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Accrued liquidation costs
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Total liabilities
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Change in carrying value of assets and liabilities, net
|
$
|
|
$
|
(
|
)
|
$
|
|
Distributions declared
|
$
|
(
|
)
|
|
Distributions reversed
|
|
|||
Distributions declared, net
|
$
|
(
|
)
|
9) |
Credit Agreement
|
Item 1.
|
Financial Statements (Continued)
|
10) |
Beneficial Interests
|
For the Three Months Ended September 30, | ||||||||||||||||
2021 |
2020 |
|||||||||||||||
Liquidation Trust Interests
|
Class A
|
Class B
|
Class A
|
Class B
|
||||||||||||
Outstanding at beginning of period
|
|
|
|
|
||||||||||||
Allowed claims
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
Settlement of claims by cancelling
Liquidation
|
||||||||||||||||
Trust Interests
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Outstanding at end of period
|
|
|
|
|
For the Three Months Ended September 30,
|
||||||||||||||||
2021 |
2020 |
|||||||||||||||
Liquidation Trust Interests
|
Class A
|
Class B
|
Class A
|
Class B
|
||||||||||||
Reserved for unresolved claims at beginning of period
|
|
|
|
|
||||||||||||
Allowed claims
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
|
|
|
(
|
)
|
|
|||||||||||
Disallowed claims
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Reserved for unresolved claims at end of period
|
|
|
|
|
Item 1.
|
Financial Statements (Continued)
|
11) |
Distributions
|
12) |
Related Party Transactions
|
Item 1.
|
Financial Statements (Continued)
|
13) |
Causes of Action
|
Item 1.
|
Financial Statements (Continued)
|
14) |
Commitments and Contingencies
|
Item 1.
|
Financial Statements (Continued)
|
15) |
Subsequent Events
|
Item 1.
|
Financial Statements (Continued)
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
|
Class of Interest
|
Number Outstanding
|
|||
Class A Liquidation Trust Interests
|
11,511,765
|
|||
Class B Liquidation Trust Interests
|
675,617
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
|
Restricted for
Qualifying Victims
|
All
Interestholders
|
Total
|
||||||||||
Net assets in liquidation as of June 30, 2021
|
$
|
3,167
|
$
|
126,373
|
$
|
129,540
|
||||||
Change in assets and liabilities:
|
||||||||||||
Restricted for Qualifying Victims - change in carrying value of assets and liabilities, net
|
-
|
-
|
-
|
|||||||||
All interestholders:
|
||||||||||||
Change in carrying value of assets and liabilities, net
|
-
|
4,904
|
4,904
|
|||||||||
Distributions (declared) reversed, net
|
-
|
99
|
99
|
|||||||||
Net change in assets and liabilities
|
-
|
5,003
|
5,003
|
|||||||||
Net assets in liquidation, as of September 30, 2021
|
$
|
3,167
|
$
|
131,376
|
$ |
134,543
|
Restricted for
Qualifying Victims
|
All
Interestholders
|
Total
|
||||||||||
Sales proceeds in excess of carrying value
|
$
|
-
|
$
|
3,071
|
$
|
3,071
|
||||||
Settlement recoveries recognized, net
|
-
|
926
|
926
|
|||||||||
Remeasurement of assets and liabilities, net
|
-
|
812
|
812
|
|||||||||
Other
|
-
|
95
|
95
|
|||||||||
Change in carrying value of assets and liabilities, net
|
$
|
-
|
$
|
4,904
|
$
|
4,904
|
• |
Completed construction of two single-family homes (2600 Hutton and 1484 Carla Ridge).
|
• |
Sold two single-family homes for net proceeds of approximately $42.45 million. One of the single-family homes was under construction.
|
• |
Signed agreements to settle Causes of Action for payment to the Trust of approximately $0.97 million.
|
• |
Paid construction costs of approximately $4.23 million relating to single-family homes under development.
|
• |
Paid holding costs of approximately $0.40 million.
|
• |
Paid general and administrative costs of approximately $4.12 million, including approximately $0.20 million of board member fees and expenses, approximately $1.14 million of payroll and other general and
administrative costs and approximately $2.78 million of professional fees.
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
|
Net assets in liquidation, as of June 30, 2020
|
$
|
264,517
|
||
Change in assets and liabilities:
|
||||
Change in carrying value of assets and liabilities, net
|
5,083
|
|||
Distributions (declared) reversed, net
|
(29,877
|
)
|
||
Net change in assets and liabilities
|
(24,794
|
)
|
||
Net assets in liquidation, as of September 30, 2020
|
$
|
239,723
|
Settlement recoveries recognized, net
|
$
|
6,195
|
||
Carrying value in excess of sales proceeds
|
(263
|
)
|
||
Remeasurement of assets and liabilities, net
|
(883
|
)
|
||
Other
|
34
|
|||
Change in carrying value of assets and liabilities, net
|
$
|
5,083
|
• |
Declared a distribution of $2.56 per Class A Interest, which totaled approximately $29.97 million.
|
• |
Sold four single-family homes and nine other properties for net proceeds of approximately $33.49 million. One of the single-family homes was under construction and the buyer assumed the remaining obligations
to complete the construction of the property of approximately $11.25 million.
|
• |
Signed agreements to settle Causes of Action of approximately $6.58 million.
|
• |
Paid construction costs of approximately $7.84 million relating to single-family homes under development.
|
• |
Paid holding costs of approximately $1.10 million.
|
• |
Paid general and administrative costs of approximately $1.92 million, including approximately $0.09 million of board member fees and expenses, approximately $1.21 million of payroll and other general and
administrative costs and approximately $0.62 million of professional fees.
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
|
• |
Revolving Line of Credit: On June 19, 2020, two wholly-owned subsidiaries of the Wind-Down Entity entered into a $25,000,000 LOC. On February 11, 2021, the LOC was amended. Two additional wholly owned
subsidiaries of the Wind-Down Entity were joined to the LOC as co-borrowers and two properties were added as replacement collateral. The maturity date of the LOC was changed to January 31, 2023 with an option to extend for one additional
year, subject to the availability of collateral. 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 LOC is secured by a deed of trust on two properties, the personal property associated therewith and the interest reserve. The Wind-Down Entity is the guarantor of the LOC. The Company is
required to keep a cash balance of $20,000,000 on deposit with the lender in order to avoid a non-compliance fee of 2% of the shortfall in the required deposit and is required to comply with various covenants. No amounts were outstanding
under the LOC as of September 30, 2021 and November 12, 2021.
|
• |
Sales of Real Estate Assets: The Wind-Down Entity and the Wind-Down Subsidiaries are in the process of developing, marketing and selling their real estate assets, all of which are held for sale. As of
September 30, 2021, the Company owned a total of eleven real estate assets with a gross carrying value of approximately $107.79 million. One single-family home was listed for sale and four single-family homes were under construction.
Therefore, it is unlikely that the net proceeds for the three months ended September 30, 2021 will 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 three months ended September 30, 2021, the Company recognized approximately $0.97 million from the settlement of Causes of Action. There can be no assurance that the amounts the Company
recovers from settling Causes of Action in the future will be consistent with the amount recovered during the three months ended September 30, 2021. In addition, the Company has not recognized any recovery from the Comerica Bank Settlement
as it is subject to court approval. Court approval and payment of the proposed settlement is expected by the first quarter of calendar year 2022, but could be delayed by appeals or other proceedings.
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
|
Date
Declared
|
$ per
Class A
Interest
|
During the Period from
February 15, 2019 (inception)
through
September 30, 2021 ($ in Millions)
|
During the Period from
February 15, 2019 (inception) through
November 12, 2021 ($ in Millions)
|
||||||||||||||||||||||||||
Total
Declared
|
Paid
|
Restricted
Cash
Account
|
Total
Declared
|
Paid
|
Restricted
Cash
Account
|
||||||||||||||||||||||||
Distributions Declared
|
|||||||||||||||||||||||||||||
First
|
3/15/2019
|
$
|
3.75
|
$
|
44.70
|
$
|
42.32
|
$
|
2.38
|
$
|
44.70
|
$
|
42.32
|
$ |
2.38
|
||||||||||||||
Second
|
1/2/2020
|
4.50
|
53.43
|
51.19
|
2.24
|
53.43
|
51.19
|
2.24
|
|||||||||||||||||||||
Third
|
3/31/2020
|
2.12
|
25.00
|
24.19
|
0.81
|
25.00
|
24.19
|
0.81
|
|||||||||||||||||||||
Fourth
|
7/13/2020
|
2.56
|
29.97
|
29.24
|
0.73
|
29.97
|
29.24
|
0.73
|
|||||||||||||||||||||
Fifth
|
10/19/2020
|
2.56
|
29.95
|
29.20
|
0.75
|
29.95
|
29.20
|
0.75
|
|||||||||||||||||||||
Sixth
|
1/7/2021
|
4.28
|
50.01
|
48.67
|
1.34
|
50.01
|
48.67
|
1.34
|
|||||||||||||||||||||
Seventh (a)
|
5/13/2021
|
2.58
|
30.02
|
29.33
|
0.69
|
30.02
|
29.33
|
0.69
|
|||||||||||||||||||||
Eighth
|
10/8/2021
|
3.44
|
-
|
-
|
-
|
40.02
|
39.14 | 0.88 | |||||||||||||||||||||
Subtotal
|
$
|
25.79
|
$
|
263.08
|
$
|
254.14
|
|
8.94
|
$
|
303.10
|
$
|
293.28
|
|
9.82
|
|||||||||||||||
Distributions Reversed
|
|||||||||||||||||||||||||||||
Disallowed/cancelled (b)
|
(2.93
|
)
|
(2.93
|
)
|
|||||||||||||||||||||||||
Returned (c)
|
0.74
|
0.74
|
|||||||||||||||||||||||||||
Subtotal
|
(2.19
|
)
|
(2.19
|
)
|
|||||||||||||||||||||||||
Distributions Paid from Reserve Account (d)
|
(2.20
|
)
|
(2.22
|
)
|
|||||||||||||||||||||||||
Distributions Payable, Net
|
as of 9/30/2021:
|
$
|
4.55
|
as of 11/12/2021:
|
$
|
5.41 |
(a) |
The seventh distribution included the cash the Trust received from Fair Funds.
|
(b) |
As a result of claims being disallowed or Class A Interests cancelled.
|
(c) |
Distribution checks returned or not cashed.
|
(d) |
Paid as claims are allowed or resolved.
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
|
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings (Continued)
|
Item 1. |
Legal Proceedings (Continued)
|
Item 1. |
Legal Proceedings (Continued)
|
Item 1. |
Legal Proceedings (Continued)
|
• |
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.
|
o |
The Trust has filed over 400 legal actions of this nature, many of which have been resolved, resulting in recoveries by or judgments in favor of the Trust. Since inception and as of October 31, 2021, the
Trust has obtained judgments of approximately $8.17 million and has entered into settlements in approximately 200 legal actions and approximately 245 potential avoidance claims for which litigation was not filed, resulting in an aggregate
of approximately $16.36 million of cash payments made or due to the Trust and approximately $9.93 million in reductions of claims against the Trust.
|
o |
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 Bankruptcy Court, Adv. Pro. No. 10-51076 (BLS), Woodbridge Liquidation Trust v. Robert Shapiro, Jeri Shapiro, 3X a Charm, LLC, Carbondale Basalt Owners, LLC, Davana Sherman Oaks Owners, LLC, In Trend Staging, LLC, Midland Loop Enterprises, LLC, Schwartz
Media Buying Company, LLC and Stover Real Estate Partners LLC. In this action, the Trust asserts claims under chapter 5 of the Bankruptcy Code and applicable state law for avoidance of preferential and fraudulent transfers together
with claims for fraud, aiding and abetting fraud, the unlicensed sale of securities, breach of fiduciary duty and unjust enrichment. The Trust seeks to recover damages and assets held in the names of Robert Shapiro, Jeri Shapiro and their
family members and entities owned or controlled by them, which assets the Trust contends are beneficially owned by the Debtors or for which the Debtors are entitled to recover based on the Shapiros’ defalcations, including over $20 million
in avoidable transfers.
|
Item 1. |
Legal Proceedings (Continued)
|
• |
Criminal proceeding and forfeiture. In connection with the United States’ criminal case against Robert Shapiro (Case No. No. 19-20178-CR-ALTONAGA (S.D. Fla. 2019)),
Shapiro agreed to the forfeiture of certain assets. The Trust filed a petition in the Florida court to claim the Forfeited Assets as property of the Debtors’ estates, and therefore as property that had vested in the Trust pursuant to the
Plan. The Trust has entered into an agreement with the United States Department of Justice to resolve its claim. The agreement was approved by the Bankruptcy Court on September 17, 2020 and was approved by the United States District Court
on October 1, 2020. Among other things, the agreement provides for the release of specified Forfeited Assets by the United States to the Trust, and for the Trust to liquidate those assets and distribute the net sale proceeds to Qualifying
Victims, which include the vast majority of Trust beneficiaries—specifically, all former holders of Class 3 and 5 claims under the Plan and their permitted assigns—but do not include former holders of Class 4 claims under the Plan. The
Trust has taken possession of the Forfeited Assets.
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Date of Sale
|
Number of
Class A
Interests Sold
|
Number of
Class B
Interests Sold
|
Nature of the
Transaction
|
Consideration
Received
|
|||||||
July 28, 2021
|
301.67
|
-
|
Allowance of
|
Allowance of
|
|||||||
claims
|
claims
|
||||||||||
Total
|
301.67
|
-
|
Item 3. |
Defaults upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
Item 6. |
Exhibits
|
Exhibit Description
|
|
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.
|
|
Certificate of Trust of Woodbridge Liquidation Trust dated February 14 and effective February 15, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by
the Trust on October 25, 2019.
|
|
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.
|
|
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.
|
|
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.
|
|
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.
|
|
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.
|
|
Loan and Security Agreement dated June 19, 2020 by and among WB Propco, LLC and WB 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.
|
|
10.3 |
Agreement and Amendment to Loan and Security Agreement dated December 18, 2020 by and among WB Propco, LLC and WB 141 S. Carolwood, LLC, as Borrowers, Woodbridge Wind-Down Entity, LLC, as Guarantor, and City National Bank of Florida, as
Lender, incorporated by reference herein to the Form 10-Q filed by the Trust on May 17, 2021.
|
10.4 |
Assumption Agreement and Joinder dated February 11, 2021 by and among WB Propco, LLC, WB 638 Siena, LLC and WB 642 St. Cloud, LLC, as co-borrowers, Woodbridge Wind Down Entity, LLC, as guarantor, and City National Bank of Florida,
incorporated by reference herein to the Form 10-Q filed by the Trust on May 17, 2021.
|
10.5 |
Amended and Restated Security Agreement dated February 11, 2021 by WB Propco, LLC, WB 638 Siena, LLC and WB 642 St. Cloud, LLC in favor of City National Bank of Florida, incorporated by reference herein to the Form 10-Q filed by the
Trust on May 17, 2021.
|
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.
|
|
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.
|
|
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.
|
|
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.
|
Item 6.
|
Exhibits (Continued)
|
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.
|
|
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.
|
|
Employment Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, incorporated herein by reference to Amendment No. 1 to Registration Statement
on Form 10 filed by the Trust on December 13, 2019.
|
|
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.
|
|
Indemnification Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, incorporated herein by reference to Amendment No. 1 to Registration
Statement on Form 10 filed by the Trust on December 13, 2019.
|
|
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.
|
|
Settlement Agreement dated August 6, 2021 by and among Mark Baker, Jay Beynon as Trustee for the Jay Beynon Family Trust DTD 10/23/1998, Alan and Marlene Gordon, Joseph C. Hull, Lloyd and
Nancy Landman, and Lilly A. Shirley on behalf of themselves and the proposed Settlement Class, Michael I. Goldberg, as Trustee for Woodbridge Liquidation Trust, and Comerica Bank, incorporated herein by reference to the Form 10-K filed by
the Trust on September 27, 2021.
|
|
Certification of Liquidation Trustee pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of Liquidation Trustee pursuant to 18 U.S.C. 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Findings of Fact, Conclusions of Law, and Order Confirming the First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and its Affiliated Debtors, entered
October 26, 2018, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019.
|
Item 6.
|
Exhibits (Continued)
|
101
|
The following financial statements from the Woodbridge Liquidation Trust Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in eXtensible Business Reporting Language (XBRL): (i) consolidated statements of net assets in liquidation as of September 30, 2021 and June 30, 2021, (ii) consolidated statements of changes in net assets in liquidation for the three months ended September 30, 2021 and 2020, (iii) the notes to the consolidated financial statements. XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
104
|
Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)
|
Woodbridge Liquidation Trust
|
||
Date: November 12, 2021
|
By:
|
/s/ Michael I. Goldberg
|
Michael I. Goldberg,
|
||
Liquidation Trustee
|