Woodbridge Liquidation Trust - Quarter Report: 2022 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended March 31, 2022

or

For the transition period from ______ to _____

Commission File Number: 000-56115

Woodbridge Liquidation Trust

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (310) 765-1550

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer,’’ ‘‘smaller reporting company’’ and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No  ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS

DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ☒  No ☐

---

Woodbridge Liquidation Trust

Form 10-Q

March 31, 2022

Table of Contents

Woodbridge Liquidation Trust and Subsidiaries Consolidated Statements of Net Assets in Liquidation As of March 31, 2022 and June 30, 2021

(Unaudited, $ In Thousands)

See accompanying notes to unaudited consolidated financial statements.

Woodbridge Liquidation Trust and Subsidiaries Consolidated Statements of Changes in Net Assets in Liquidation For the Three Months Ended March 31, 2022 and 2021

(Unaudited, $ in Thousands)

See accompanying notes to unaudited consolidated financial statements.

 

		Nine Months Ended March 31, 2022												Nine Months Ended March 31, 2021
		Restricted For Qualifying Victims				All Interestholders				Total				Restricted For Qualifying Victims				All Interestholders				Total
Net Assets in Liquidation as of beginning of period		$	3,167			$	126,373			$	129,540			$	-			$	264,517			$	264,517
Change in assets and liabilities (Note 8):
Restricted for Qualifying Victims -
Change in carrying value of assets and liabilities, net			36				-				36				3,459				-				3,459
All Interestholders :
Change in carrying value of assets and liabilities, net			-				45,922				45,922				-				7,529				7,529
Distributions (declared) reversed, net			-				(79,236	)			(79,236	)			-				(109,554	)			(109,554	)
Net change in assets and liabilities			-				(33,314	)			(33,314	)			-				(102,025	)			(102,025	)
Net Assets in Liquidation as of end of period		$	3,203			$	93,059			$	96,262			$	3,459			$	162,492			$	165,951

See accompanying notes to unaudited consolidated financial statements.

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

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

The Trust is prosecuting various Causes of Action acquired by the Trust pursuant to the Plan and is resolving claims asserted against the Debtors. As of March 31, 2022, the Company is the plaintiff in several pending lawsuits (see Note 13 for additional information). The Trust is also liquidating its Forfeited Assets (see Note 7 for additional information).

The Company is required to liquidate its assets and distribute available cash to the Trust beneficiaries. The liquidation activities are carried out by the Trust, the Wind-Down Entity and the Wind-Down Subsidiaries. As of March 31, 2022, the Company estimates that the liquidation activities will be completed by February 15, 2024.

As discussed and defined in Note 2, the Company uses the Liquidation Basis of Accounting. The Trust currently operates as one reportable segment comprised primarily of real estate assets held for sale.

Net assets in liquidation represent the remaining estimated aggregate value available to Trust beneficiaries upon liquidation, with no discount for the timing of proceeds (undiscounted).  Due to the unpredictability of real estate selling prices, the impact of the COVID-19 virus (see below), as well as the uncertainty in the timing of liquidation of the real estate and other assets, net liquidation proceeds, other recoveries and actual liquidation costs may differ materially from the estimated amounts.

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

As a result of the COVID-19 outbreak, three of the Wind-Down Subsidiaries’ construction sites were closed for about three months during the summer of 2020. One construction site was closed for about two weeks in late December 2020.  The continued spread of COVID-19 presents challenges for the Company and its vendors, mainly due to labor and product supply shortages. The Company continues to observe health and safety guidelines, including allowing its employees to work remotely. The Company will continue to evaluate the impact of the COVID-19 outbreak on its activities, including the cost of construction, the timing of completion of the single-family homes that are under construction, the time needed to market and sell the single-family homes, and the price at which these single-family homes will be sold.

The ultimate impact of the COVID-19 outbreak will depend on many factors, some of which cannot be foreseen, including the duration, severity, and geographic concentrations of the pandemic and any resurgence of the disease.

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the consolidated financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. These consolidated financial statements have been presented in accordance with Accounting Standards Codification (ASC) Subtopic 205-30, “Liquidation Basis of Accounting,” as amended by Accounting Standards Update (ASU) No. 2013-07, “Presentation of Financial Statements (Topic 205), Liquidation Basis of Accounting.” The June 30, 2021 consolidated statement of net assets in liquidation included herein was derived from the audited consolidated financial statements but does not include all disclosures or notes required by U.S. GAAP for complete financial statements.

All material intercompany accounts and transactions have been eliminated.

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

Under the liquidation basis of accounting, all assets are recorded at their estimated net realizable value or liquidation value, which represents the estimated amount of net cash that will be received upon the disposition of the assets (on an undiscounted basis). The measurement of real estate assets held for sale is based on the terms of 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. The estimated selling costs range from 5.0% to 6.0% of the property sales price.

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

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

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

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

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

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

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

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

The Company’s real estate assets held for sale as of March 31, 2022, with comparative information as of June 30, 2021, are as follows ($ in thousands):

The Company’s restricted cash as of March 31, 2022, with comparative information as of June 30, 2021, is as follows ($ in thousands):

The Company’s other assets as of March 31, 2022, with comparative information as of June 30, 2021, are as follows ($ in thousands):

(a) Escrow receivables as of March 31, 2022 relate to two single-family homes that were sold during the nine months ended March 31, 2022. and one single-family home sold prior to June 30, 2021. Escrow receivables as of June 30, 2021 relate to one single-family home sold prior to June 30, 2021. Amounts are to be released upon completion of construction and/or obtaining a certificate of occupancy.

The following is a summary of the items included in accrued liquidation costs as of March 31, 2022, with comparative information as of June 30, 2021 ($ in thousands):

7)	Forfeited Assets - Restricted for Qualifying Victims

The Forfeited Assets included in the Company’s March 31, 2022 and June 30, 2021 consolidated financial statements are as follows ($ in thousands):

8)	Net Change In Assets and Liabilities

The following is a summary of the change in the carrying value of assets and liabilities, net during the three months ended March 31, 2022 ($ in thousands):

The following is a summary of the change in the carrying value of assets and liabilities, net during the three months ended March 31, 2021 ($ in thousands):

		Cash				Remeasure-
		Activities				ment				Total
Real estate assets held for sale, net		$	-			$	-			$	-
Cash and cash equivalents			-				-				-
Restricted cash			28				-				28
Other assets			-				3,442				3,442
Total assets		$	28			$	3,442			$	3,470
Accounts payable and accrued liabilities		$	-			$	11			$	11
Accrued liquidation costs			-				-				-
Total liabilities		$	-			$	11			$	11
Change in carrying value of assets and liabilities, net		$	28			$	3,431			$	3,459

		Cash				Remeasure-
		Activities				ment				Total
Real estate assets held for sale, net		$	-			$	-			$	-
Cash and cash equivalents			-				-				-
Restricted cash			28				-				28
Other assets			-				3,442				3,442
Total assets		$	28			$	3,442			$	3,470
Accounts payable and accrued liabilities		$	-			$	11			$	11
Accrued liquidation costs			-				-				-
Total liabilities		$	-			$	11			$	11
Change in carrying value of assets and liabilities, net		$	28			$	3,431			$	3,459

The following provides details of the change in the carrying value of assets and liabilities, net during the three months ended March 31, 2022 ($ in thousands):

The following provides details of the distributions (declared) reversed, net during the three months ended March 31, 2022 ($ in thousands):

The following provides details of the distributions (declared) reversed, net during the three months ended March 31, 2021 ($ in thousands):

Distributions payable increased by approximately $1,261,000 during the three months ended March 31, 2021.

The following provides details of the change in the carrying value of assets and liabilities, net during the nine months ended March 31, 2022 ($ in thousands):

The following provides details of the distributions (declared) reversed, net during the nine months ended March 31, 2022 ($ in thousands):

The following provides details of the distributions (declared) reversed, net during the nine months ended March 31, 2021 ($ in thousands):

9)	Credit Agreement

On June 19, 2020, two wholly-owned subsidiaries of the Wind-Down Entity entered into a $25,000,000 revolving line of credit (the “LOC”) with a financial institution. The LOC had an original maturity of June 19, 2022. The LOC requires the borrowers to establish an interest reserve of $1,750,000 (Note 4), 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 LOC was 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 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.

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

As of March 31, 2022, the Company was in compliance with the financial covenants of the LOC. No amounts were outstanding under the LOC as of March 31, 2022 or June 30, 2021.

The following table summarizes the Liquidation Trust Interests (rounded) for the nine months ended March 31, 2022 and 2021:

Of the 11,516,439 Class A Interests outstanding at March 31, 2022, 11,436,675 were held by Qualifying Victims (Note 7).

Of the 90,793 Class A Interests relating to unresolved claims at March 31, 2022, 3,449 would be held by Qualifying Victims (Note 7).

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

During the three months ended March 31, 2022 and 2021, approximately $472,000 and $47,000, respectively, and during the nine months ended March 31, 2022 and 2021, approximately $761,000 and $379,000, respectively, were released from the restricted cash account and distributions payable were reduced by the same amount as a result of claims being disallowed or Class A Interests being cancelled.

During the three months ended March 31, 2022 and 2021, approximately $0 and $197,000, respectively, and during the nine months ended March 31, 2022 and 2021, approximately $0, and $431,000, respectively, were received from the Company’s transfer agent and others relating to distribution checks that were returned or not cashed. These amounts were deposited into the restricted cash account and distributions payable were increased by the same amount.

Terry Goebel, a member of the Trust Supervisory Board, is president and a principal owner of G3 Group LA (G3), a construction firm specializing in the development of high-end luxury residences. G3 is owned by Terry Goebel and his son Kelly Goebel. As of March 31, 2022, the Company was under contract with G3 for the development of one single-family home in Los Angeles, California. As of March 31, 2022 and June 30, 2021 the remaining amounts payable under this contract were approximately $3,045,000 and $4,391,000, respectively. During the three months ended March 31, 2022 and 2021, approximately $267,000 and $1,496,000, respectively, and during the nine months ended March 31, 2022 and 2021, approximately $3,443,000 and $5,887,000, respectively, were paid by the Company to G3 related to this contract.

The Liquidation Trustee of the Trust is entitled to receive 5% of the total gross amount recovered by the Trust from the pursuit of the Causes of Action. During the three months ended March 31, 2022 and 2021, approximately $23,000 and $72,000, respectively, and during the nine months ended March 31, 2022 and 2021, approximately $1,334,000 and $462,000, respectively, were accrued as amounts due to the Liquidation Trustee. As of March 31, 2022 and June 30, 2021, approximately $1,310,000 and $160,000, respectively, were payable to the Liquidation Trustee. These amounts are included in accounts payable and accrued liabilities in the accompanying consolidated statements of net assets in liquidation. During the three months ended March 31, 2022 and 2021, approximately $0 and $0, respectively,  and during the nine months ended March 31, 2022 and 2021, approximately $184,000 and $491,000, respectively, were paid to the Liquidation Trustee. See Note 15 for additional information.

The executive officers of the Wind-Down Entity are entitled to a bonus based on the Wind-Down Entity achieving certain specified cumulative amounts of distributions to the Trust. Based on the carrying amounts of the net assets in liquidation included in the accompanying consolidated statements of net assets in liquidation, as of March 31, 2022 and June 30, 2021, approximately $2,348,000 and $3,040,000, respectively, were accrued as the estimated amount of the bonus (including associated payroll taxes). These amounts are included in the payroll and payroll-related costs portion of accrued liquidation costs in the accompanying consolidated statement of net assets in liquidation. During the three months ended March 31, 2022 and 2021, approximately $692,000 and $1,025,000, respectively, and during the nine months ended March 31, 2022 and 2021, approximately $692,000 and $1,025,000, respectively, were paid related to the bonuses.

		For the Three Months Ended March 31,								For the Nine Months Ended March 31,
		2022				2021				2022				2021
Comerica Bank		$	-			$	-			$	24,815			$	-
Other settlement recoveries			468				1,278				1,868				8,443
Total		$	468			$	1,278			$	26,683			$	8,443

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

As of March 31, 2022, the Company had construction contracts under which an aggregate of approximately $5,200,000 was unpaid.

The Company had a lease for its office space that expired on August 31, 2021. The Company had one three-month option to extend the lease. On June 4, 2021, the Company opted not to extend its existing lease and entered into a new office lease at a different location. The new lease is for the period from August 1, 2021 through July 31, 2022. The annual rent is approximately $43,000 plus common area maintenance charges. The Company has two six-month options to extend the lease. The Company paid approximately $55,000 for the lease year ending July 31, 2022 relating to prepaid rent, common area maintenance charges and a security deposit for the new lease during the year ended June 30, 2021. During the three months ended March 31, 2022 and 2021, approximately $0 and $76,000, respectively, and during the nine months ended March 31, 2022 and 2021, approximately $50,000 and $221,000, respectively were paid as rent, including common area maintenance and parking charges.

The Company is not presently the defendant in any material litigation nor, to the Company’s knowledge, is any material litigation threatened against the Company.

The Company is not aware of any environmental liabilities that it believes would have a material adverse effect on its net assets in liquidation.

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

During the period from April 1, 2022 through May 13, 2022, as a result of claims being disallowed or Class A Interests being cancelled, approximately $52,000 was released from the restricted cash account and distributions payable were reduced by the same amount.

During the period from April 1, 2022 through May 13, 2022, approximately $1,800,000 relating to a pending sale was released from escrow.

Class of Interest		Number Outstanding
Class A Liquidation Trust Interests			11,516,439
Class B Liquidation Trust Interests			675,617

		Restricted for Qualifying Victims				All Interestholders				Total
Other settlement recoveries recognized, net (1)		$	-			$	445			$	445
Remeasurement of assets and liabilities, net			-				7,627				7,627
Other			-				194				194
Change in carrying value of assets and liabilities, net		$	-			$	8,266			$	8,266

o

Declared a distribution of $3.44 per Class A Interest, which totaled approximately $39.98 million.

o

Sold the rest of the gold Forfeited Assets for net proceeds of approximately $0.12 million.

o

Completed construction of one single-family home (642 St. Cloud).

o

Settled one secured loan for net proceeds of approximately $0.72 million.

o

Signed agreements to settle other Causes of Action for payment to the Trust of approximately $0.47 million.

o

Paid construction costs of approximately $1.80 million relating to single-family homes under development.

o

Paid holding costs of approximately $0.66 million.

o

Paid general and administrative costs of approximately $4.04 million, including approximately $0.17 million of board member fees and expenses, approximately $1.84 million of payroll and other general and administrative costs and approximately $2.03 million of professional fees.

		Restricted for Qualifying Victims				All Interestholders				Total
Net assets in liquidation as of December 31, 2021		$	-			$	210,476			$	210,476
Change in assets and liabilities:
Restricted for Qualifying Victims - change in carrying value of assets and liabilities, net			3,459				-				3,459
All Interestholders:
Change in carrying value of assets and liabilities, net			-				1,974				1,974
Distributions (declared) reversed, net			-				(49,958	)			(49,958	)
Net change in assets and liabilities			-				(47,984	)			(47,984	)
Net assets in liquidation, as of March 31, 2021		$	3,459			$	162,492			$	165,951

		Restricted for Qualifying Victims				All Interestholders				Total
Recognition of Forfeited Assets		$	3,459			$	-			$	3,459
Remeasurement of assets and liabilities, net			-				2,473				2,473
Other settlement recoveries recognized, net (1)			-				1,326				1,326
Carrying value in excess of sales proceeds			-				(1,900	)			(1,900	)
Other			-				75				75
Change in carrying value of assets and liabilities, net		$	3,459			$	1,974			$	5,433

(1)	Net of the 5% payable to the Liquidation Trustee of approximately $72 ($ in thousands).

o

Declared a distribution of $4.28 per Class A Interest, which totaled approximately $50.01 million.

o

Signed agreements to settle other Causes of Action for payment to the Trust of approximately $1.28 million.

o

Recorded Forfeited Assets with an estimated net realizable value of approximately $3.46 million.

o

Paid construction costs of approximately $5.77 million relating to single-family homes under development.

o

Paid holding costs of approximately $0.77 million.

o

Paid general and administrative costs of approximately $4.29 million, including approximately $0.21 million of board member fees and expenses, approximately $1.90 million of payroll and other general and administrative costs and approximately $2.18 million of professional fees.

		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			36				-				36
All Interestholders:
Change in carrying value of assets and liabilities, net			-				45,922				45,922
Distributions (declared) reversed, net			-				(79,236	)			(79,236	)
Net change in assets and liabilities			-				(33,314	)			(33,314	)
Net assets in liquidation, as of March 31, 2022		$	3,203			$	93,059			$	96,262

		Restricted for Qualifying Victims				All Interestholders				Total
Causes of Action, net(1) :
Comerica Bank		$	-			$	23,575				23,575
Other settlement agreements			-				1,777				1,777
Sales proceeds in excess of carrying value			-				6,460				6,460
Remeasurement of assets and liabilities, net			36				13,428				13,464
Other			-				682				682
Change in carrying value of assets and liabilities, net		$	36			$	45,922			$	45,958

(1)	Net of the 5% payable to the Liquidation Trustee of approximately $1,241 for Comerica Bank and $93 for other settlement agreements ($ in thousands).

o

Declared two distributions, both of $3.44 per Class A Interest, which totaled approximately $80.00 million.

o

Sold the wine and the gold Forfeited Assets for net proceeds of approximately $0.49 million.

o

Completed construction of one single-family home (642 St. Cloud).

o

Sold four single-family homes and settled two secured loans for net proceeds of approximately $64.40 million. One of the single-family homes was under construction.

o

Recorded approximately $24.81 million from the settlement of the two pending actions against Comerica Bank, the California Class Action and the Delaware Adversary Action.

o

Signed agreements to settle other Causes of Action for payment to the Trust of approximately $1.87 million.

o

Paid construction costs of approximately $9.47 million relating to single-family homes under development.

o

Paid holding costs of approximately $1.90 million.

o

Paid general and administrative costs of approximately $12.56 million, including approximately $0.56 million of board member fees and expenses, approximately $4.68 million of payroll and other general and administrative costs and approximately $7.32 million of professional fees.

		Restricted for Qualifying Victims				All Interestholders				Total
Net assets in liquidation as of June 30, 2020		$	-			$	264,517			$	264,517
Change in assets and liabilities:
Restricted for Qualifying Victims - change in carrying value of assets and liabilities, net			3,459				-				3,459
All Interestholders:
Change in carrying value of assets and liabilities, net			-				7,529				7,529
Distributions (declared) reversed, net			-				(109,554	)			(109,554	)
Net change in assets and liabilities			-				(102,025	)			(102,025	)
Net assets in liquidation, as of March 31, 2021		$	3,459			$	162,492			$	165,951

		Restricted for Qualifying Victims				All Interestholders				Total
Recognition of Forfeited Assets		$	3,459			$	-			$	3,459
Settlement recoveries recognized, net (1)			-				8,013				8,013
Carrying value in excess of sales proceeds			-				(1,540	)			(1,540	)
Remeasurement of assets and liabilities, net			-				2,775				2,775
Adjustment to insurance claim receivable			-				(1,900	)			(1,900	)
Other		$	-			$	181			$	181
Change in carrying value of assets and liabilities, net		$	3,459			$	7,529			$	10,988

(1)	Net of the 5% payable to the Liquidation Trustee of approximately $462 ($ in thousands).

o

Declared three distributions, two each of $2.56 and one of $4.28 per Class A Interest, which totaled approximately $109.93 million.

o

Sold five single-family home, two lots and eleven other properties for net proceeds of approximately $121.16 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.

o

Signed agreements to settle Causes of Action for payment to the Trust of approximately $8.44 million.

o

Recorded Forfeited Assets with an estimated net realizable value of approximately $3.46 million.

o

Paid construction costs of approximately $22.04 million relating to single-family homes under development.

o

Paid holding costs of approximately $4.13 million.

o

Paid general and administrative costs of approximately $14.39 million, including approximately $0.68 million of board member fees and expenses, approximately $6.35 million of payroll and other general and administrative costs and approximately $7.36 million of professional fees.

o

Revolving Line of Credit:  On June 19, 2020, two wholly-owned subsidiaries of the Wind-Down Entity entered into a $25.00 million 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 $1.75 million, 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 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 $20.00 million 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 March 31, 2022 or May 13, 2022.

o

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 March 31, 2022, the Company owned a total of seven real estate assets with a gross carrying value of approximately $100.54 million. The majority of the gross carrying value is concentrated in the three single-family homes. Four single-family homes were under construction; two that are owned as of March 31, 2022,  one that was sold in December 2021 and one that was sold in May 2021. During the three months ended March 31, 2022, the Company settled one secured loan for net proceeds of approximately $725,000. During the nine months ended March 31, 2022, the Company sold four single-family homes and settled two secured loans for net proceeds of approximately $64,405,000. It is unlikely that the net proceeds for the three or nine months ended March 31, 2022 will be indicative of future net proceeds, which are likely to  be significantly lower. In addition, it may take longer to sell the properties than the Company has estimated.

o

Recoveries: During the three and nine months ended March 31, 2022, the Company recognized approximately $0.47 million and $26.68 million, respectively, from the settlement of Causes of Action. The recoveries for the three and nine months ended March 31, 2022 include approximately $0 and $24.81 million from Comerica Bank. 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 and nine months ended March 31, 2022.

	Date Declared		$ per Class A Interest				During the Period from February 15, 2019 (inception) through March 31, 2022 ($ in Millions)												During the Period from February 15, 2019 (inception) through May 13, 2022 ($ 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				40.02				39.14				0.88
Ninth	2/4/2022			3.44				39.98				39.15				0.83				39.98				39.15				0.83
Subtotal			$	29.23			$	343.08			$	332.43				10.65			$	343.08			$	332.43				10.65
Distributions Reversed
Disallowed/cancelled (b)																(3.57	)											(3.62	)
Returned (c)																0.73												0.73
Subtotal																(2.84	)											(2.89	)
Distributions Paid from Reserve Account (d)																(2.78	)											(2.87	)
Distributions Payable, Net											as of 3/31/2022:				$	5.03							as of 5/13/2022:				$	4.89

(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 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

o

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.

o

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.

o

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	Other legal proceedings.  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:

o

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 and has sold the wine and gold 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
January 31, 2022		4,674.25		-		Allowance of claims		Allowance of claims
Total		4,674.25		-

Item 3.

Defaults upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Exhibit Description
2.1	First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of  Companies, LLC and its Affiliated Debtors dated August 22, 2018, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019.
3.1	Certificate of Trust of Woodbridge Liquidation Trust dated February 14 and effective February 15, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019.
3.2	Liquidation Trust Agreement of Woodbridge Liquidation Trust dated February 15, 2019, as amended by Amendment No. 1 dated August 21, 2019 and Amendment No. 2 dated September 13, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019.
3.3	Amendment No. 3 to Liquidation Trust Agreement dated as of November 1, 2019, incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019.
3.4	Amendment No. 4 to Liquidation Trust Agreement dated as of February 5, 2020, incorporated herein by reference to the Current Report on Form 8-K filed by the Trust on February 6, 2020.
3.5	Amended and Restated Bylaws of Woodbridge Liquidation Trust effective August 21, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019.
10.1	Limited Liability Company Agreement of Woodbridge Wind-Down Entity LLC dated February 15, 2019, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019.
10.2	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.
10.6	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.
10.7	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.

10.8	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.
10.9	Employment Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and Marion W. Fong, incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019.

10.10	First Amendment to Employment Agreement dated September 24, 2020 between Woodbridge Wind-Down Entity LLC and Marion W. Fong, incorporated herein by reference to the Form 10-K filed by the Trust on September 28, 2020.
10.11	Indemnification Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and Marion W. Fong, incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019.
10.12	Employment Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019.
10.13	First Amendment to Employment Agreement dated September 24, 2020 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, incorporated herein by reference to the Form 10-K filed by the Trust on September 28, 2020.
10.14	Indemnification Agreement dated November 12, 2019 between Woodbridge Wind-Down Entity LLC and David Mark Kemper, incorporated herein by reference to Amendment No. 1 to Registration Statement on Form 10 filed by the Trust on December 13, 2019.
10.15	Stipulation and Settlement Agreement between the United States and Woodbridge Liquidation Trust, as approved by order of the United States Bankruptcy Court for the District of Delaware entered September 17, 2020, incorporated herein by reference to the Form 10-K filed by the Trust on September 28, 2020.
10.16	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.
10.17†	California Residential Purchase Agreement and Joint Escrow Instructions dated October 19, 2021 for 642 St. Cloud Rd., Los Angeles, CA, including amendments, incorporated herein by reference to the Form 10-Q filed by the Trust on February 11, 2022.
31.1*	Certification of Liquidation Trustee pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Liquidation Trustee pursuant to 18 U.S.C. 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1	Findings of Fact, Conclusions of Law, and Order Confirming the First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and its Affiliated Debtors, entered October 26, 2018, incorporated herein by reference to the Registration Statement on Form 10 filed by the Trust on October 25, 2019.
101	The following financial statements from the Woodbridge Liquidation Trust Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in eXtensible Business Reporting Language (XBRL): (i)  Consolidated Statements of Net Assets in Liquidation as of March 31, 2022 and June 30, 2021, (ii)  Consolidated Statements of Changes in Net Assets in Liquidation for the three months ended March 31, 2022 and 2021, (iii) Consolidated Statements of Changes in Net Assets in Liquidation for the nine months ended March 31, 2022 and 2021, (iv) the Notes to the Consolidated Financial sSatements. 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: May 13, 2022	By:	/s/ Michael I. Goldberg
		Michael I. Goldberg,
		Liquidation Trustee