Woodbridge Liquidation Trust - Quarter Report: 2023 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, 2023

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, 2023

Table of Contents

Woodbridge Liquidation Trust and Subsidiaries Consolidated Statements of Net Assets in Liquidation As of March 31, 2023 and June 30, 2022

(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, 2023 and 2022

(Unaudited, $ in Thousands)

See accompanying notes to unaudited consolidated financial statements.

 

		Nine Months Ended March 31, 2023												Nine Months Ended March 31, 2022
		Restricted For Qualifying Victims				All Interestholders				Total				Restricted For Qualifying Victims				All Interestholders				Total
Net Assets in Liquidation as of beginning of period		$	3,485			$	30,910			$	34,395			$	3,167			$	126,373			$	129,540
Change in assets and liabilities (Note 8):
Restricted for Qualifying Victims -
Change in carrying value of assets and liabilities, net			(27	)			-				(27	)			36				-				36
All Interestholders :
Change in carrying value of assets and liabilities, net			-				(7,066	)			(7,066	)			-				45,922				45,922
Distributions (declared) reversed, net			-				2,644				2,644				-				(79,236	)			(79,236	)
Net change in assets and liabilities			-				(4,422	)			(4,422	)			-				(33,314	)			(33,314	)
Net Assets in Liquidation as of end of period		$	3,458			$	26,488			$	29,946			$	3,203			$	93,059			$	96,262

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 limited liability companies (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 (“Class A Interests”) and Class B Liquidation Trust Interests (“Class B Interests”). The holders of Class A Interests and Class B Interests are collectively referred to as “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, 2023, the Company is the plaintiff in several pending lawsuits. The Company has accrued an estimate of the amount of legal costs to be incurred to pursue this litigation, excluding contingent fees. As more fully discussed in Note 2, the Company’s consolidated financial statements do not include any estimate of future net recoveries from litigation and settlement, since the Company cannot reasonably estimate them.

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, 2023, the Company estimates that the liquidation activities will be completed by March 31, 2026 (see Note 6).

As more fully discussed 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).  Net liquidation proceeds, other recoveries and actual liquidation costs may differ materially from the estimated amounts due to the uncertainty in the timing of completing the liquidation activities.

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.

The Company observes health and safety guidelines, including allowing its employees to work remotely. The Company continues to evaluate the impact of the COVID-19 virus and other global health crises on its activities, including the time needed to prosecute the Company’s Causes of Action and complete its remaining liquidation activities.

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, 2022 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 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 considered 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 8.5% of the property sales price,including sales commissions, transfer taxes and other costs.

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 and estimated reserves for contingencies. 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 as well as an accrual for potential construction warranty claims. 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 and an accrual for potential construction warranty claims and the administration of such claims.

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 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, including construction and other project related costs, architectural and engineering, project management, city fees, bond payments (net of refunds), furnishings, marketing, estimated reserves for potential construction warranty claims 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, and other general and administrative costs to operate the Company and administer warranty claims.

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.

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 separately presents the portion of net assets in liquidation that are restricted for Qualifying Victims (Note 7) from the net assets in liquidation that are available to All Interestholders.

The Company’s real estate assets held for sale as of March 31, 2023, with comparative information as of June 30, 2022, are as follows ($ in thousands) (unaudited):

The Company’s restricted cash as of March 31, 2023, with comparative information as of June 30, 2022, is as follows ($ in thousands) (unaudited):

		March 31, 2023				June 30, 2022
Forfeited Assets (Note 7)		$	3,170			$	2,395
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			1,222				3,726
Total restricted cash		$	4,392			$	6,121

At March 31, 2023, the Company’s restricted cash is held in Trust Accounts. At June 30, 2022, the Company’s restricted cash was deposited with one financial institution.

The Company’s other assets as of March 31, 2023, with comparative information as of June 30, 2022, are as follows ($ in thousands) (unaudited):

(a) The allowance for uncollectible settlement installment receivables was approximately $63,000 and $7,000 as of March 31, 2023 and June 30, 2022, respectively.

(b) Escrow receivables as of March 31, 2023 relate to one single-family home that was sold during the nine months ended March 31, 2023 and one single-family home that was sold during the year ended June 30, 2022. Escrow receivables as of June 30, 2022 relate to two single-family homes that were sold during the year ended June 30, 2022 and one single-family home sold prior to June 30, 2021. Amounts are typically released upon the completion of punch list items and/or obtaining a certificate of occupancy. In some cases, escrow receivable amounts may be used to pay for the cost of completing punch list items.

The following is a summary of the items included in accrued liquidation costs as of March 31, 2023, with comparative information as of June 30, 2022 ($ in thousands) (unaudited):

During the quarter ended March 31, 2023, the Company concluded that its liquidation activities would not be completed by February 15, 2024, the current outside termination date of the Trust. There have been significant delays in the Company’s legal proceedings where the Company is the plaintiff and the Company estimates that it may require up to an additional two years to complete its operations. The revised estimated completion date for the Company’s operations is approximately March 31, 2026. Furthermore, the ultimate recovery amount from these legal proceedings cannot be determined until they are settled.

The change of the estimated completion date of the Company’s liqudation activities resulted in an additional accrual of accrued liquidation costs of approximately $7.7 million. The additional costs are primarily legal and other professional fees and payroll and payroll-related costs. A portion of the accrued liquidation costs relate to estimated reserves for potential construction warranty claims and the administration of such claims after the Company’s liquidation activities are completed.

The Company is required to file a motion with the Bankruptcy Court to extend the termination date of the Trust beyond February 15, 2024. The motion is required to be filed within six months before February 15, 2024. The Company expects that the motion will be filed as required and that the Bankruptcy Court will grant the motion as the extension is needed to pursue additional Trust actions that are expected to yield additional proceeds to the Trust.

7)	Forfeited Assets - Restricted for Qualifying Victims

In March 2021, the Trust received certain Forfeited Assets from the DOJ, including cash, wine, jewelry, handbags, clothing, shoes, art, gold, an automobile and other assets. The Company recorded the total estimated net realizable value of the Forfeited Assets of approximately $3,459,000. During the three and nine months ended March 31, 2023, the Company sold the automobile, some of the jewelry, handbags, clothing, shoes and art. During the year ended June 30, 2022, the Company sold the wine and gold and some of the handbags, clothing and shoes. The Forfeited Assets included in the Company’s March 31, 2023 and June 30, 2022 consolidated financial statements are as follows ($ in thousands) (unaudited):

On February 7, 2023, the Trust was informed that the DOJ had received additional Forfeited Assets from a co-defendant of Robert Shapiro and that the DOJ proposes to transfer these Forfeited Assets to the Trust. The Trust has not yet entered into an agreement with the DOJ for the transfer of any additional Forfeited Assets. It is expected that the proceeds from any additional Forfeited Assets would be distributed to Qualifying Victims. The Trust is unable to estimate the amount or timing of the transfer of any such Forfeited Assets.

8)	Net Change In Assets and Liabilities

The following provides details of the change in the carrying value of assets and liabilities, net during the three months ended March 31, 2023 ($ in thousands) (unaudited):

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) (unaudited):

		Cash				Remeasure-
		Activities				ment				Total
Real estate assets held for sale, net		$	-			$	-			$	-
Cash and cash equivalents			-				-				-
Restricted cash			111				-				111
Other assets			(120	)			-				(120	)
Total assets		$	(9	)		$	-			$	(9	)
Accounts payable and accrued liabilities		$	-			$	-			$	-
Accrued liquidation costs			(9	)			-				(9	)
Total liabilities		$	(9	)		$	-			$	(9	)
Change in carrying value of assets and liabilities, net		$	-			$	-			$	-

		Cash				Remeasure-
		Activities				ment				Total
Real estate assets held for sale, net		$	-			$	-			$	-
Cash and cash equivalents			-				-				-
Restricted cash			481				-				481
Other assets			(526	)			36				(490	)
Total assets		$	(45	)		$	36			$	(9	)
Accounts payable and accrued liabilities		$	-			$	-			$	-
Accrued liquidation costs			(45	)			-				(45	)
Total liabilities		$	(45	)		$	-			$	(45	)
Change in carrying value of assets and liabilities, net		$	-			$	36			$	36

The following provides details of the change in the carrying value of assets and liabilities, net during the three months ended March 31, 2023 ($ in thousands) (unaudited):

The following provides details of the distributions (declared) reversed, net during the three months ended March 31, 2023 ($ in thousands) (unaudited):

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

Distributions payable decreased by approximately $137,000 during the three months ended March 31, 2022.

The following provides details of the change in the carrying value of assets and liabilities, net during the nine months ended March 31, 2023 ($ in thousands) (unaudited):

The following provides details of the distributions (declared) reversed, net during the nine months ended March 31, 2023 ($ in thousands) (unaudited):

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

9)	Credit Agreement

The following table summarizes the Liquidation Trust Interests (rounded) for the nine months ended March 31, 2023 and 2022 (unaudited):

Of the 11,514,190 Class A Interests outstanding at March 31, 2023, 11,436,259 are held by Qualifying Victims (Note 7).

Of the 13,875 Class A Interests relating to unresolved claims at March 31, 2023, 1,880 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 to all Interestholders, excluding distributions of the net sales proceeds from Forfeited Assets (Note 7). 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 Interest 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, as defined.

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, 2023, the Company was under contract with G3 for the development of one single-family home in Los Angeles, California. As of March 31, 2023 and June 30, 2022 the remaining amounts payable under this contract were approximately $220,000 and $438,000, respectively. During the three months ended March 31, 2023 and 2022, approximately $0 and $267,000, respectively, and during the nine months ended March 31, 2023 and 2022, approximately, $0 and $3,443,000 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, 2023 and 2022, approximately $21,000 and $23,000, respectively, and during the nine months ended March 31, 2023 and 2022, approximately, $30,000 and $1,334,000, respectively, were accrued as amounts due to the Liquidation Trustee, respectively. As of March 31, 2023 and June 30, 2022, approximately $28,000 and $81,000, 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, 2023 and 2022, approximately $83,000 and $0, respectively, and during the nine months ended March 31, 2023 and 2022, approximately, $83,000 and $184,000, respectively, were paid to the Liquidation Trustee.

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, approximately $0 and $3,000,000 were accrued as of March 31, 2023 and June 30, 2022, respectively, as the estimated amount of the bonus (including associated payroll taxes). This amount is 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 and nine months ended March 31, 2023 and 2022, $0 and $692,000, respectively, and $3,373,000 and $692,000, respectively, were paid related to executive bonuses.

The Company also recorded liabilities of 5% of the settlement as amounts payable to the Liquidation Trustee and an allowance for uncollectible settlement installment receivables. See Note 5 for information about the settlement receivables, net as of March 31, 2023.

As of March 31, 2023, the Company had construction contracts under which approximately $220,000 was unpaid.

The Wind-Down Entity has part-time employment agreements with its two executive officers through December 31, 2023.

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

Item 2.

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

(1)	Net of 5% payable to the Liquidation Trustee of approximately $20 and increase in the allowance for uncollectible settlement installment receivables of approximately $30 during the three months ended March 31, 2023.

•

Reversed distributions of approximately $0.02 million that were received from Interestholders that had been overpaid on prior distributions offset by $0.01 million of distributions of Interestholders that were previously deemed to have forfeited their rights to receive Class A Interest distributions but had subsequently responded and therefore their distributions were recorded.

•	Received net proceeds from the sale of Forfeited Assets of approximately $0.08 million.

•	Sold one single-family home and settled one secured loan of approximately $25.40 million.

•

As a result of the expected additional time required for the Company to complete its liquidation activities from February 15, 2024 to March 31, 2026, the Company accrued additional accrued liquidation costs of approximately $7.7 million. The additional costs are primarily legal and other professional fees and payroll and payroll-related costs. A portion of the accrued liquidation costs relate to estimated reserves for potential construction warranty claims and the administration of such claims after its liquidation activities are completed.

•	Paid construction costs of approximately $0.04 million relating to single-family homes under development.

•	Paid holding costs of approximately $0.20 million.

•	Paid general and administrative costs of approximately $2.24 million, including approximately $0.15 million of board member fees and expenses, approximately $1.07 million of payroll and other general and administrative costs and approximately $1.02 million of professional fees.

(1)	Net of the 5% payable to the Liquidation Trustee of approximately $22 ($ in thousands) for other settlement agreements during the three months ended March 31, 2022.

•	Declared a distribution of $3.44 per Class A Interest totaling approximately $39.98 million.

•	Reversed distributions of approximately $0.47 million primarily from claims being disallowed or Class A Interests being cancelled.

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

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

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

•	Recorded approximately $0.47 million from the settlement of other Causes of Action, net of 5% payable to the Liquidation Trustee.

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

•	Paid holding costs of approximately $0.66 million.

•	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.

(1)	Net of 5% payable to the Liquidation Trustee of approximately $31 and an increase in the allowance for uncollectible settlement installment receivables of approximately $56 during the nine months ended March 31, 2023.

•

Reversed distributions of approximately $2.64 million from claims being disallowed or Class A Interests being cancelled. Reversed distributions of approximately $0.02 million that were received from Interestholders that had been overpaid on prior distributions offset by $0.03 million of distributions of Interestholders that were previously deemed to have forfeited their rights to receive Class A Interest distributions but had subsequently responded and therefore their distributions were recorded.

•	Received net proceeds from the sale of Forfeited Assets of approximately $0.79 million.

•	Completed construction of one single-family home (41 King Street).

•	Sold one single-family home and settled one secured loan for net proceeds of approximately $25.40 million.

•	Recorded approximately $0.23 million from the settlement of Causes of Action, net of 5% payable to the Liquidation Trustee and an allowance for uncollectible installment receivables.

•

As a result of the expected additional time required for the Company to complete its liquidation activities from February 15, 2024 to March 31, 2026, the Company accrued additional accrued liquidation costs of approximately $7.7 million. The additional costs are primarily legal and other professional fees and payroll and payroll-related costs. A portion of the accrued liquidation costs relate to estimated reserves for potential construction warranty claims and the administration of such claims after its liquidation activities are completed.

•	Paid construction costs of approximately $1.57 million relating to single-family homes under development.

•	Paid holding costs of approximately $0.67 million.

•	Paid general and administrative costs of approximately $11.34 million, including approximately $0.46 million of board member fees and expenses, approximately $6.46 million of payroll and other general and administrative costs and approximately $4.42 million of professional fees.

(1)	Net of 5% payable to the Liquidation Trustee of approximately $1,241 for Comerica Bank and $93 for other settlement agreements during the nine months ended March 31, 2022.

•	Declared two distributions, both of $3.44 per Class A Interest, which totaled approximately $79.99 million.

•	Reversed distributions of approximately $0.76 primarily from claims being disallowed or Class A Interests being cancelled.

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

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

•	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.

•	Recorded approximately $24.81 million from the settlement of the two pending actions against Comerica Bank and approximately $1.87 million from the settlement of other Causes of Action, net of 5% payable to the Liquidation Trustee.

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

•	Paid holding costs of approximately $1.90 million.

•	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.

•

Sales of Real Estate:  The Wind-Down Group is in the process of marketing and selling its few remaining real estate assets, all of which are held for sale.  As of March 31, 2023, the Company owned a total of three real estate assets with a gross carrying value of approximately $2.45 million. Based on the remaining assets of the Company, future net proceeds will be negligible as compared to the proceeds the Company has realized in prior periods.

•

Causes of Action Recoveries:  During the three and nine months ended March 31, 2023, the Company recognized approximately $0 million and $0.27 million, respectively, from the settlement of Causes of Action. There can be no assurance that the amounts the Company recovers from settling Causes of Action in the future will be consistent with the amount recovered in prior periods.

•

Forfeited Assets:  Forfeited Assets consist of cash and other assets (jewelry, art, clothing, handbags and shoes). During the three and nine months ended March 31, 2023, the Trust sold some of its Forfeited Assets and received net proceeds of approximately $0.08 million and $0.79 million, respectively. As noted earlier, net sale proceeds from liquidating the Forfeited Assets are to be distributed only to Qualifying Victims.

(a)	The seventh distribution included the cash the Trust received from recoveries of Fair Funds.

(c)	As a result of claims being disallowed or Class A Interests cancelled.

(d)	Distribution checks returned or not cashed.

(e)	Distributions forfeited as Interestholders did not cash checks that were over 180 days old.

(f)	Paid as claims are allowed or resolved.

•

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. On February 4, 2022, the Trust entered into a Settlement Agreement with Ms. Jeri Shapiro resolving the Trust’s adversary proceeding against Ms. Shapiro.  In connection with the Settlement Agreement, Ms. Shapiro responded to interrogatories from the Trust and submitted a declaration under penalty of perjury detailing her lack of assets.  Upon execution of the Settlement Agreement, Ms. Shapiro executed and delivered a Stipulated Judgment for approximately $20.6 million that will be held by the Trust in escrow for three years that can be entered without notice if the Trust learns Ms. Shapiro’s representations in her declaration were false or materially inaccurate.  Additionally, Ms. Shapiro authorized the Trust to expunge the filed claims of certain co-defendants she was listed as an officer and turned over payments to the Trust that were received by certain co-defendants in the adversary proceeding.  A stipulation of dismissal (as to Ms. Shapiro only) was entered on April 1, 2022.

•

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 as well as an automobile.  Some of the jewelry, art, clothing, handbags and shoes have also been sold.

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults upon Senior Securities

Item 4.

Mine-Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibits

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	First Amendment to Limited Liability Agreement of Woodbridge Wind-Down Entity LLC dated November 30, 2022, incorporated herein by reference to the Current Report on Form 8-K filed by the Trust on December 1, 2022.
10.3	Second Amendment to Limited Liability Agreement of Woodbridge Wind-Down Entity LLC dated as of March 27, 2023, incorporated herein by reference to the Current Report on Form 8-K filed by the Trust on March 29, 2023.
10.4	Third Amendment to Limited Liability Agreement of Woodbridge Wind-Down Entity LLC dated as of April 28, 2023, incorporated herein by reference to the Current Report on Form 8-K filed by the Trust on May 1, 2023.
10.5	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.
10.6	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.
10.7	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. 8	Part-Time Employment Agreement dated November 30, 2022 between Woodbridge Wind-Down Entity and Marion W. Fong, incorporated herein by reference to the Current Report on Form 8-K filed by the Trust on December 1, 2022.

10.9	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.
10.10	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.
10.11	Part-Time Employment Agreement dated November 30, 2022 between Woodbridge Wind-Down Entity and David Mark Kemper, incorporated herein by reference to the Current Report on Form 8-K filed by the Trust on December 1, 2022.
10.12	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.
10.13	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.
10.14	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.
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, 2023, formatted in eXtensible Business Reporting Language (XBRL): (i) consolidated statements of net assets in liquidation as of March 31, 2023 and June 30, 2022, (ii) consolidated statements of changes in net assets in liquidation for the three months ended March 31, 2023 and 2022, (iii) consolidates statements of changes in net assets in liquidation for the six months ended March 31, 2023 and 2021, (iv) 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: May 12, 2023	By:	/s/ Michael I. Goldberg
		Michael I. Goldberg,
		Liquidation Trustee