WBQNL 10-K & 10-Q changes, risk factors and insider trading
Woodbridge Liquidation Trust · OTC · Real Estate · CIK 1785494 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
“The Company’s consolidated financial statements do not include any future recoveries from default, stipulated and summary judgments, insurance or Fair Fund recoveries. The Company’s consolidated financial statements are prepared using the Liquidation Basis of Accounting, under which future recoveries, other than insurance recoveries, are recorded only if the Company has executed an agreement, final court approval is received (if applicable), and collectability is reasonably assured. …”see in full comparison
“The Company’s consolidated financial statements do not include any future recoveries from unresolved Causes of Action, default, stipulated and summary judgments or insurance recoveries. The Company’s consolidated financial statements are prepared using the Liquidation Basis of Accounting, under which future recoveries, other than insurance recoveries, are recorded only if the Company has executed an agreement, final court approval is received (if applicable), and collectability is reasonably assured. …”see in full comparison
The Company has concluded that its liquidation activities will not be completed bysee in full comparisonMarch31,February202615, 2027 due to the pending construction defect claim against the Development Entity and related litigation. This litigation includes the Development Entity’s claims against itsprimary andsecond excessinsurers,layer insurer, and the prior owner, contractors, and other professionals involved in the development of the site and the construction of the home. The Company currently projects a revised estimated completion date for the Company’s liquidation activities of approximately February 15,2027.2028. The Company is required to file a motion with the Bankruptcy Court to extend theterminationdateOutside Termination Date of the Trust beyondMarchFebruary31,17,2026 by September 30, 2025.2027 OnSeptemberAugust22,3,2025,2026, theCompanyTrust filed a motion with the Bankruptcy Court to extend theterminationOutsidedateTermination Date of the Trust to February 15,2027.This2028,motionwhichhaswasnotgrantedyet been ruledonbyAugustthe19,Bankruptcy Court. The Company believes that the Bankruptcy Court will grant the extension.2026.
“The amount and timing of receipts, if any, from our four remaining Causes of Action is inherently speculative and risky and cannot be predicted with certainty. The Trust does not expect to receive the proceeds of the limited remaining unresolved Causes of Action unless and until it successfully obtains judgments or concludes settlements with respect to such unresolved Causes of Action and is successful in recovering on such judgments or settlements. …”see in full comparison
“The Company’s consolidated financial statements are prepared on the Liquidation Basis of Accounting, which requires the estimation of the future value of assets and the amount of projected expenses, including reserves for construction defect claims. Estimates of the future value of assets consist primarily of estimated interest earnings, which could vary based on changes in interest rates and actual cash balances. …”see in full comparison
“The Company’s consolidated financial statements are prepared on the Liquidation Basis of Accounting, which requires the estimation of the future value of assets and the amount of projected expenses. Estimates by management may be based on, among other things, the estimated termination date of the Trust, the forward yield curve and future cash balances, the levels of general and administrative expenses (such as payroll, legal and professional fees, and other expenses) and costs of potential construction defect claims. …”see in full comparison
Full comparison: every changed paragraph (23)
An investment in the Liquidation Trust Interests involves various risks. An investor should carefully consider the risks and uncertainties described below and the other information included or incorporated by reference in this Annual Report before deciding to invest in the Liquidation Trust Interests. Any of the risk factors set forth below could significantly and adversely affect the Company’s business, prospects, financial condition and results of operations. As a result, the trading price of the Liquidation Trust Interests could decline, and an investor could lose a part or all of his or her investment.
The Trust cannot predict the timing or amount of future distributions to the Interestholders, if any. On August 3, 2023, the Supervisory Board, at the recommendation of the Liquidation Trustee, suspended the making of additional Trust distributions to Interestholders, pending the result of the investigation of a construction defect claim asserted against the Development Entity by the buyer of a single-family home sold by the Development Entity for approximately $60 million. At this time, it is unlikely that there will be another distribution, if any, to Interestholders until the construction defect claim and its related litigation are resolved. Holders of Liquidation Trust Interests are advised that the Trust has liquidated substantially all of its real estate assets and resolved nearly all of its Causes of Action,Action; andhowever, given the pending construction defect claim, the Trust is unable to estimate the timing and amount of future distributions.distributions, if any.
The
Company has concluded that its liquidation activities will not be completed by
March 31,February 202615, 2027 due to the pending construction defect claim against the
Development Entity and related litigation. This litigation includes the
Development Entity’s claims against its primary andsecond excess insurers,layer insurer, and the
prior owner, contractors, and other professionals involved in the development
of the site and the construction of the home. The Company currently projects a
revised estimated completion date for the Company’s liquidation activities of
approximately February 15, 2027.2028. The
Company is required to file a motion with the Bankruptcy Court to extend the
termination dateOutside Termination Date of the Trust beyond MarchFebruary 31,17, 2026 by September 30, 2025.2027 On SeptemberAugust 22,3, 2025,2026, the CompanyTrust filed a motion with the
Bankruptcy Court to extend the terminationOutside dateTermination Date of the Trust to February 15,
2027. This2028, motionwhich haswas notgranted yet been ruled
on byAugust the19, Bankruptcy Court. The Company believes that the Bankruptcy Court will grant the extension.2026.
The
Company Trust may seek one or more additional extensions of the terminationOutside dateTermination Date if
it deems it necessary or appropriate to facilitate the orderly liquidation of
the Trust’s assets, the resolution of the construction defect claim against the
Development Entity, orincluding the resolution of the Development Entity’s litigation
against its insurersinsurer and other third parties in connection with the
construction defect claim.
The Liquidation Trust Interests are not suitable as a long-term investment. The Company is a liquidating trust and has substantially completed its liquidation.liquidation activities.
The Class A Interests are thinly traded. The Class A Interests are not listed on any national securities exchange but instead are traded on the OTC Markets under the symbol WBQNL. Accordingly, the Class A Interests may not be suitable for investors preferring highly liquid securities and may present challenges in profit-taking and other trading risks.
The Class A Interests are thinly traded. The Class A Interests are not listed on any national securities exchange but instead are traded on the over-the-counter market (OTC Link® ATS) under the symbol WBQNL. Accordingly, the Class A Interests may not be suitable for investors preferring highly liquid securities and may present challenges in profit-taking and other trading risks.
Developments affecting the prosecution of the unresolved Causes of Action;
Litigation and governmental or regulatory investigations;
Changes in real estate market conditions; and
Litigation and governmental or regulatory investigations; and General economic, political, and financial market conditions or events.
The Trust does not expect to generate or receive cash other than from limited sources. Currently, the Trust’s primary source of cash is from interest income. Future remittances from the Wind-Down Entity will depend on the resolution and outcome of the construction defect claim and its related litigation. In
addition, the Trust may realize additional funds from judgments, insurance and
Fair Fund recoveries.
Risks Relating to Uncertainties Relating to Remaining Causes of Action
The amount and timing of receipts, if any, from our four remaining Causes of Action is inherently speculative and risky and cannot be predicted with certainty. The Trust does not expect to receive the proceeds of the limited remaining unresolved Causes of Action unless and until it successfully obtains judgments or concludes settlements with respect to such unresolved Causes of Action and is successful in recovering on such judgments or settlements. The Trust may not be successful in litigating unresolved Causes of Action or, if it is successful, there could be a significant delay before any recovery is obtained. The outcome of litigation is inherently speculative and uncertain, and there can be no assurance that the Trust will obtain a favorable judgment or settlement with respect to any particular unresolved Cause of Action. Due to the speculative and risky nature of litigation and settlement efforts, the Company is unable to make any meaningful determination of the potential outcome or value, in the aggregate, of the unresolved Causes of Action.
Even if there is a recovery based on the unresolved Causes of Action, there can be no assurances that there will be sufficient funds to make any distributions to Interestholders. Even if the Trust obtains a judgment or settlement based on the unresolved Causes of Action, it may not be able to collect the amount of the judgment or settlement. If the Trust successfully recovers funds on account of such judgment or settlement, there can be no assurance that the Interestholders will receive any proceeds from such judgment or settlement. Before Interestholders receive distributions, the Liquidation Trustee must pay Trust expenses and may set aside funds for future expenses, contingent liabilities, including potential construction defect claims.
Our cash, cash equivalents, short-term investments and restricted cash may be exposed to the failure of banking institutions. While we seek to minimize our exposure to third-party losses of our cash, cash equivalents, short-term investments and restricted cash, we hold our balances in a small number of financial institutions. Notwithstanding their size and reserves, such institutions remain subject to the risk of failure. If, in the future, the financial institutions with which we maintain deposits or transact business enter into receivership or become insolvent, there can be no guarantee that the Department of the Treasury, the Federal Reserve or the FDIC will intercede to protect depositors and customers. If, at any time, our deposits with any financial institution exceed the FDIC insurance limit, the Company’s deposits may be subject to loss. The Company’s access to its cash, cash equivalents and short-term investments could also become limited, impairing the Company’s ability to fund its remaining liquidation activities. In addition, if any parties with which we conduct business are unable to access funds pursuant to lending relationships or their deposit accounts with such a financial institution, the ability of such parties to continue to perform their obligations to us could be adversely affected, which, in turn, could have a material adverse effect on our liquidation activities and changes in net assets in liquidation.
The Trust is controlled by the Liquidation Trustee and the Interestholders have no voting rights regarding decisions made on behalf of the Trust. All decisions concerning the unresolved Causes of Action and distribution of assets of the Trust are to be made by the Liquidation Trustee, in accordance with the terms of the Plan and the Trust Agreement, with approval by the Supervisory Board for certain decisions as set forth in the Trust Agreement. The Interestholders have no right to elect or remove the Liquidation Trustee. The Liquidation Trustee may be removed by Bankruptcy Court order upon the motion of the Supervisory Board and a showing of good cause; provided, however, that the proposed removal and replacement of Michael Goldberg as Liquidation Trustee will require a determination by the Bankruptcy Court that “cause” exists for such removal and replacement using the standard under Bankruptcy Code section 1104 made after notice of such proposed removal and replacement has been provided to the SEC.
The Company’s success depends on the continuing contributions of its key personnel. The Wind-Down Group has a skilled management team to oversee the resolution of construction defect claims and the accounting and financial reporting for the Trust. However, it does not have agreements with any key personnel that hindershinder such individuals’ ability to quit at will and, thus, any executive officer or key employee may terminate his or her relationship with the Wind-Down Group at any time upon relatively short notice.
The Company’s consolidated financial statements are prepared on the Liquidation Basis of Accounting, which requires the estimation of the future value of assets and the amount of projected expenses, including reserves for construction defect claims. Estimates of the future value of assets consist primarily of estimated interest earnings, which could vary based on changes in interest rates and actual cash balances. Estimates of projected expenses are based on, among other things, the estimated termination date of the Trust, the levels of general and administrative expenses (such as payroll, legal and professional fees, and other expenses), and estimates of costs for resolving construction defect claims. The length of time required to complete the liquidation activities may be longer than the time currently estimated. Actual costs to resolve construction defect claim(s) may exceed the amount accrued. The actual realized value of the Company’s assets and actual expenses are likely to differ from the estimated amounts reported in the Company’s consolidated financial statements, and such differences may be material.
The Company’s consolidated financial statements do not include any future recoveries from default, stipulated and summary judgments, insurance or Fair Fund recoveries. The Company’s consolidated financial statements are prepared using the Liquidation Basis of Accounting, under which future recoveries, other than insurance recoveries, are recorded only if the Company has executed an agreement, final court approval is received (if applicable), and collectability is reasonably assured. Because the Company is unable to reasonably estimate future recoveries, if any, from default, stipulated and summary judgments, such items have not been recognized in the Company’s consolidated financial statements. An insurance recovery is accrued when it is deemed probable and reasonably estimable under the loss recovery model in accordance with ASC 450 “Contingencies” (“ASC 450”). The portion of an insurance claim in excess of costs accrued is recognized upon approval of the claim and receipt of the related payment, under the gain contingency model in accordance with ASC 450. Fair Fund recoveries are recorded when collectability is reasonably assured. Therefore, the Company’s consolidated financial statements are not expected to provide prospective investors in the Liquidation Trust Interests with meaningful information regarding such future recoveries.
The Company’s consolidated financial statements are prepared on the Liquidation Basis of Accounting, which requires the estimation of the future value of assets and the amount of projected expenses. Estimates by management may be based on, among other things, the estimated termination date of the Trust, the forward yield curve and future cash balances, the levels of general and administrative expenses (such as payroll, legal and professional fees, and other expenses) and costs of potential construction defect claims. However, the actual realized value of the Company’s assets and the Company’s actual expenses are likely to differ from the estimated amounts reported in the Company’s consolidated financial statements, and such differences may be material and possibly adverse.
The Wind-Down Entity’s and the Trust’s actual operating costs, including reserves for construction defect claims that are included in accrued liquidation costs, may be more than the estimated amounts. The length of time required to complete the liquidation activities may be longer than the time currently estimated and the actual amount of costs will likely be different than the amounts included in the consolidated financial statements and may be materially more than estimated.
The Company’s consolidated financial statements do not include any future recoveries from unresolved Causes of Action, default, stipulated and summary judgments or insurance recoveries. The Company’s consolidated financial statements are prepared using the Liquidation Basis of Accounting, under which future recoveries, other than insurance recoveries, are recorded only if the Company has executed an agreement, final court approval is received (if applicable), and collectability is reasonably assured. Because the Company is unable to reasonably estimate future recoveries, if any, from unresolved Causes of Action, default, stipulated and summary judgments. such items have not been recognized in the Company’s consolidated financial statements. An insurance recovery is accrued when it is deemed probable and reasonably estimable under the loss recovery model in accordance with ASC 450 “Contingencies” (“ASC 450”). The portion of an insurance claim in excess of costs accrued is recognized upon approval of the claim and receipt of the related payment, under the gain contingency model in accordance with ASC 450. Therefore, the Company’s consolidated financial statements are not expected to provide prospective investors in the Liquidation Trust Interests with meaningful information regarding such future recoveries.
Management's Discussion & Analysis (MD&A)
New heading “For the Year ended June 30, 2026”
Removed heading “For the year ended June 30, 2024”
Largest changes
“As of September 25, 2025, the Liquidation Trustee has declared eleven distributions to the Class A Interestholders. …”see in full comparison
“Since its inception, the Company has made substantial progress toward completion of its liquidation activities and has liquidated all but one real estate asset with a net carrying value of approximately $0.24 million. Holders of Liquidation Trust Interests are advised that given the pending construction defect claim, in particular, the Trust is unable to estimate the timing and amount of future distributions. …”see in full comparison
“The Company accrued an estimate of the initial costs to be incurred relating to the construction defect claim asserted against the Development Entity of approximately $5.0 million. The costs are primarily estimated construction and related costs for an initial phase of work as well as legal and professional fees for pursuing litigation related to the construction defect and insurance claims. Following the initial repairs, additional costs will be necessary; however, the scope of work and costs are yet to be determined and will be subject to the completion of the initial scope of work.”see in full comparison
“The Company accrues expected interest earnings when it can forecast the interest rate to be paid on its cash on deposit. The Company uses a forward yield curve to estimate the interest rates to be earned and its expected future cash balances to estimate the dollar amount that will earn interest through the currently expected Trust termination date of February 15, 2027.”see in full comparison
Full comparison: every changed paragraph (73)
For each of the classes of Liquidation Trust Interests, the number of Liquidation Trust Interests outstanding will increase to the extent that the disputed claims become allowed claims. In addition, the number of Liquidation Trust Interests outstanding will decrease to the extent that disputed claims are settled by cancelling previously issued Liquidation Trust Interests.
Since the Plan Effective Date through June 30, 2025,2026, the Wind-Down Subsidiaries have disposed of approximately 150 properties for aggregate net sales proceeds of approximately $576.80 million. As of June 30, 2025,2026, the Company owned one remaining real estate asset with a net carrying value of approximately $0.24 million. Going forward, the Company’s most significant activity will be overseeing the resolution of the construction defect claim asserted against the Development Entity and its related litigation. The Company’s most significant sources of cash are expected to be from interest income and potentially from litigation proceeds from insurance carriers and other responsible parties. The Company currently expects to complete its liquidation activities by February 15, 2027,2028, although the Company may require additional time to facilitate the orderly liquidation of the Trust’s assets, the resolution of the construction defect claim against the Development Entity, including the resolution of the Company’s claims against its insurersinsurer and other third parties in connection with the construction defect claim, or for other reasons.
For the Year ended June 30, 2026
The following is a summary of the Consolidated Statement of Changes in Net Assets in Liquidation for the year ended June 30, 2026 ($ in thousands):
Net assets in liquidation – Restricted for Qualifying Victims. The Trust had completed its activities related to the liquidation of Forfeited Assets.
Net assets in liquidation – All Interestholders decreased by approximately $1.48 million during the year ended June 30, 2026. This decrease was due to a decrease in the net carrying value of assets and liabilities of approximately $1.83 million, and distributions reversed, net of approximately $0.35 million.
The components of the changes in the carrying value of assets and liabilities, net, are as follows ($ in thousands):
(1) Net of 5% payable to the Liquidation Trustee of approximately $2.
(2) The components of Other are as follows:
During the year ended June 30, 2026, the Company:
Reversed distributions, net, of approximately $0.35 million.
Accrued interest earnings through February 15, 2028 of approximately $2.11 million.
Accrued additional costs to be incurred relating to the construction defect claim asserted against the Development Entity of approximately $1.45 million. The additional accrual reflects an increase in estimated costs for the initial phase and additional repair and cost estimates for the subsequent phases of repair.
Accrued approximately $3.84 million relating to changing the estimated completion date of the Company’s liquidation activities from February 15, 2027 to February 15, 2028. The additional costs are primarily legal and other professional fees and payroll and payroll-related costs.
Paid development costs of approximately $3.27 million, primarily related to the construction defect claim.
Paid general and administrative costs of approximately $4.66 million, including approximately $0.30 million of board member fees and expenses, approximately $1.87 million of payroll and other general and administrative costs, and approximately $2.49 million of professional fees.
Net assets in liquidation – Restricted for Qualifying Victims decreased by approximately $4.11 million during the year ended June 30, 2025. This decrease was due to an increase in the net carrying value of assets and liabilities of approximately $0.04 million and distributions of the proceeds of Forfeited Assets of approximately $4.15 million. As of June 30, 2025, theThe Trust has completed its activities related to the liquidation of Forfeited Assets.
(1) Net of 5% payable to the Liquidation
Trustee of approximately $270,000 and an increase in the allowance for
uncollectible settlement receivables of approximately $34,000..
settlement receeivables of approximately $34,000.
(2) The components of Other are as follows:
Item 7.
The Company accruedAccrued additional costs to be incurred relating to the construction defect claim asserted against the Development Entity of approximately $5.77 million. The additional accrual reflects an increase in estimated costs for the initial phase and additional repair and cost estimates for the subsequent phases of repair.
The Company accruedAccrued approximately $5.47 million relating to changing the estimated completion date of the Company’s liquidation activities from March 31, 2026 to February 15, 2027. The additional costs are primarily legal and other professional fees and payroll and payroll-related costs.
For the year ended June 30, 2024
The following is a summary of the Consolidated Statement of Changes in Net Assets in Liquidation for the year ended June 30, 2024 ($ in thousands):
Net assets in liquidation – Restricted for Qualifying Victims increased by approximately $0.62 million during the year ended June 30, 2024.
Net assets in liquidation – All Interestholders increased approximately $32.48 million during the year ended June 30, 2024. This decrease was due to an increase in the net carrying value of assets and liabilities of approximately $32.07 million and distributions reversed of $0.41 million for claims being disallowed.
The components of the change in the carrying value of assets and liabilities, net are as follows ($ in thousands):
Net of 5% payable to the Liquidation Trustee of approximately $2,734,000 and an increase in the allowance for uncollectible installment receivables of approximately $78,000.
During the year ended June 30, 2024, the Company:
Received additional Forfeited Assets of approximately $0.56 million from the DOJ.
Received net proceeds from the sale of Forfeited Assets of approximately $0.29 million.
Reversed distributions of approximately $0.41 million from claims being disallowed.
Received net proceeds of approximately $0.50 million from the sale of the Hawaii property.
Recorded approximately $35.10 million from the settlement of other Causes of Action, net of 5% payable to the Liquidation Trustee and an increase in the allowance for uncollectible settlement installment receivables.
Accrued interest earnings for the period from July 1, 2024 through March 31, 2026 of approximately $2.26 million of which approximately $0.12 million relates to Forfeited Assets’ restricted cash and approximately $2.14 million relates to the Company’s remaining cash, cash equivalents, restricted cash and short-term investments.
The Company accrued an estimate of the initial costs to be incurred relating to the construction defect claim asserted against the Development Entity of approximately $5.0 million. The costs are primarily estimated construction and related costs for an initial phase of work as well as legal and professional fees for pursuing litigation related to the construction defect and insurance claims. Following the initial repairs, additional costs will be necessary; however, the scope of work and costs are yet to be determined and will be subject to the completion of the initial scope of work.
Paid development costs of approximately $0.70 million, for costs primarily related to the construction defect claim.
Paid general and administrative costs of approximately $9.90 million, including approximately $0.27 million of board member fees and expenses, approximately $1.92 million of payroll and other general and administrative costs, approximately $4.96 million of professional fees and approximately $2.75 million paid to the Liquidation Trustee.
The Company’s primary sources for meeting its capital requirements are its cash, cash equivalents and short-term investments, receipt of interest earned, and proceeds from Fair Fund recoveries and liquidating its other remaining assets. The Company’s primary uses of funds are and will continue to be for distributions, if any, and costs relating to the resolution of the construction defect claim and its related litigation and other costs. The Company expects to be able to adequately fund its liquidation activities over the next twelve months from its primary sources of capital; however, no assurance can be made in that regard. At this time, the amount of the liability exposure for the construction defect claim cannot be determined and may be in excess of the estimated liquidation costs accrued as of June 30, 2025.2026.
Fair Fund Recoveries: During the period from July 1, 2026 through September 25, 2026, the Trust received approximately $269,000 of Fair Fund recoveries from the SEC. It is our understanding that the SEC is in the process of obtaining approval to disburse additional Fair Fund recoveries to the Trust.
Proceeds from Real Estate Transactions: As of June 30, 2025,2026, the Company owned one remaining real estate asset with an estimated net carrying value of approximately $0.24 million. Based on the remaining real estate asset of the Company, future net proceeds from the sale of real estate assets will be negligible as compared to the proceeds the Company has realized in prior periods.
Causes of Action Recoveries: During the year ended June 30, 2025, the Company recognized approximately $3.74 million from the settlement of Causes of Action. Based on the limited remaining Causes of Action, future recoveries will be negligible as compared to the proceeds the Company has realized in prior periods.
The primary uses of the Company’s liquidity are to pay distributions payable, operating costs, and costs related to construction defect claim(s).claims, and distributions payable. As of June 30, 2025,2026, the Company’s total liabilities were approximately $26.82$23.91 million. The total liabilities recorded as of June 30, 20252026 may not be indicative of the costs paid in future periods, which may vary materially from the current estimate.
Distributions will be made at the sole discretion of the Liquidation Trustee in accordance with the provisions of the Plan and the Trust Agreement. On August 3, 2023, the Supervisory Board, at the recommendation of the Liquidation Trustee, suspended the making of additional Trust distributions to Interestholders, pending the result of the investigation of a construction defect claim asserted against the Development Entity by the buyer of a single-family home sold by the Development Entity for approximately $60 million. At this time, it is unlikely that there will be another distribution, if any, to Interestholders until the construction defect claim and its related litigation are resolved. Holders of Liquidation Trust Interests are advised that the Trust has liquidated substantially all of its real estate assets and resolved nearly all of its Causes of Action,Action; andhowever, given the pending construction defect claim, the Trust is unable to estimate the timing and amount of future distributions.distributions, if any.
As of September 25, 2025, the Liquidation Trustee has declared eleven distributions to the Class A Interestholders. The distributions include a cash distribution on account of the then-allowed claims and a deposit is made into a restricted cash account for amounts that are or may become payable (a) in respect of Class A Interests that may be issued in the future upon the allowance of unresolved bankruptcy claims, (b) in respect of Class A Interests on account of recently allowed claims, (c) for holders of Class A Interests who failed to cash distribution checks mailed in respect of prior distributions, (d) for distributions that were withheld due to pending avoidance actions and (e) for holders of Class A Interests for which the Trust is waiting for further beneficiary information.
See “Part 1, Item 1. Business, D. Plan Provisions Regarding the Company, 4. Liquidation Trust Interests under the Plan” for additional information about distributions.
As claims are resolved, additional Class A Interests may be issued or cancelled (see “Part 1, Item 1. Business, D. Plan Provisions Regarding the Company, 2. Treatment under the Plan of holders of claims against and equity interests in the Debtors and 3. Assets and liabilities of the Company”). Therefore, the total amount of a distribution declared may change. In addition, distributions may change if Interestholders that were previously deemed to have forfeited their rights to receive Class A Interest distributions subsequently respond, and if distributions are returned.
Sections 7.6 and 7.18 of the Plan provide that distributions that have not been cashed within 180 calendar days of their issuance shall be null and void and the holder of the associated Liquidation Trust Interests “shall be deemed to have forfeited its rights to any reserved and future Distributions under the Plan,” with such amounts to become “Available Cash” of the Trust for all purposes. On February 1, 2022, the Trust sent letters to the holders of the Class A Interests who had failed to cash distribution checks in respect of prior distributions, which checks were issued more than 180 days prior to the date of the letter. The letter informed each recipient that, unless the Trust was contacted on or before February 28, 2022, such recipient’s reserved and future distributions would be deemed forfeited in accordance with the Plan. The Trust provided this final notice simply as a one-time courtesy and reserves its rights to strictly enforce the Plan’s forfeiture provisions, and any other provision of the Plan, against any person (including any recipient of the final notice) at any time in the future, without further notice.
The following tables summarize the distributions declared Interestholders3, distributions paid and the activity in the restricted cash account for the periods from February 15, 2019 (inception) through June 30, 2025 and from February 15, 2019 (inception) through September 25, 2025:
(a)
The seventh distribution included the cash the Trust received from recoveries of Fair Funds.
As a result of claims being disallowed or Class A Interests cancelled.
(c)
Distribution checks returned or not cashed.
(d)
Distributions forfeited as Interestholders did not cash checks that were over 180 days old.
(e)
Paid as claims are allowed or resolved.
3 This table does not include a distribution of net proceeds of Forfeited Assets of approximately $4.15 million to the Qualifying Victims on December 17, 2024. Qualifying Victims consisted of the former holders of allowed Class 3 and 5 claims as of the Plan Effective Date and their permitted assigns but does not include former holders of Class 4 claims.
What changed in the latest 10-Q
Risk Factors
Please see the applicable risks in Item 1A of our Annual Report on Form 10-K filed with the SEC on September 25, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “For the three months ended March 31, 2025”
New heading “For the nine months ended March 31, 2026”
New heading “For the nine months ended March 31, 2025”
Removed heading “For the three months ended December 31, 2024”
Removed heading “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)”
Removed heading “For the six months ended December 31, 2025”
Removed heading “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)”
Removed heading “For the six months ended December 31, 2024”
Removed heading “PART I. FINANCIAL INFORMATION (CONTINUED)”
Largest changes
“Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)”see in full comparison
“Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)”see in full comparison
Full comparison: every changed paragraph (84)
As of DecemberMarch 31, 2025,2026, the number
of Liquidation Trust Interests outstanding in each class is as follows:
Since the Plan Effective Date
through DecemberMarch 31, 2025,2026, the Wind-Down Subsidiaries have disposed of
approximately 150 properties for aggregate net sales proceeds of approximately
$576.80 million. As of DecemberMarch 31, 2025,2026, the Company owned one real estate
asset with a net carrying value of approximately $0.24 million. Going forward,
the Company’s most significant activity will be overseeing the resolution of
the construction defect claim asserted against the Development Entity and its
related litigation. The Company’s most significant sources of cash are expected
to be from interest income and potentially from litigation proceeds from
insurance carriers and other responsible parties. The Company currently expects
to complete its liquidation activities by February 15, 2027,2028, although the
Company may require additional time to facilitate the orderly liquidation of
the Trust’s assets, the resolution of the construction defect claim against the
Development Entity, the resolution of the Company’s claims against its insurers
and other third parties in connection with the construction defect claim, or
for other reasons.
For the three months ended DecemberMarch 31, 20252026
The following is a summary of the Consolidated
Statement of Changes in Net Assets in Liquidation for the three months ended
December March 31, 20252026 ($ in thousands):
Net assets in liquidation – Restricted for
Qualifying Victims: As of DecemberMarch 31, 2025,2026, the Trust has completed its
activities related to the liquidation of Forfeited Assets.
Net assets in liquidation – All Interestholders increaseddecreased by approximately $0.53$2.62 million during the three months ended DecemberMarch 31, 2025. This increase was2026 due to ana increasedecrease in the net carrying value of assets and liabilities of approximately $0.18 million and distributions (declared) reversed, net of approximately $0.35 million.liabilities.
During the three months ended DecemberMarch 31, 2025,2026, the Company:
Accrued interest earnings through February 15, 2028 of approximately $1.98 million.
Accrued additional costs to be incurred relating to the construction defect claim asserted against the Development Entity of approximately $1.10 million. The additional accrual is primarily related to timing delays, unanticipated repairs and updated cost estimates.
Accrued approximately $3.51 million relating to changing the estimated completion date of the Company’s liquidation activities from February 15, 2027 to February 15, 2028. The additional costs are primarily legal and other professional fees and payroll and payroll-related costs.
Paid development costs of approximately $0.89 million.
Paid general and administrative costs of approximately $1.32 million, including approximately $0.08 million of board member fees and expenses, approximately $0.78 million of payroll and other general and administrative costs, and approximately $0.46 million of professional fees.
For the three months ended March 31, 2025
The following is a summary of the Consolidated Statement of Changes in Net Assets in Liquidation for the three months ended March 31, 2025 ($ in thousands):
Consolidated Statement of Changes in Net Assets in Liquidation For the Three Months Ended March 31, 2025
Net assets in liquidation – Restricted for Qualifying Victims: As of March 31, 2025, the Trust has completed its activities related to the liquidation of Forfeited Assets.
Net assets in liquidation – All Interestholders decreased approximately $0.39 million during the three months ended March 31, 2025. This decrease was due to a decrease in the net carrying value of assets and liabilities of approximately $0.44 million and an increase from distributions (declared) reversed net of approximately of $0.05 million.
(1) Net of 5% payable to the Liquidation Trustee.
During the three months ended March 31, 2025, the Company:
Reversed distributions payable of approximately $0.05 million relating to disallowed claims.
Recorded approximately $0.10 million from the settlement of Causes of Action, net of 5% payable to the Liquidation Trustee.
Paid development costs of approximately $0.42 million.
Paid general and administrative costs of approximately $1.35 million, including approximately $0.07 million of board member fees and expenses, approximately $0.76 million of payroll and other general and administrative costs and approximately $0.52 million of professional fees.
For the nine months ended March 31, 2026
The following is a summary of the Consolidated Statement of Changes in Net Assets in Liquidation for the nine months ended March 31, 2026 ($ in thousands):
Net assets in liquidation – Restricted for Qualifying Victims: As of March 31, 2026, the Trust has completed its activities related to the liquidation of Forfeited Assets.
Net assets in liquidation – All Interestholders decreased by approximately $1.39 million during the nine months ended March 31, 2026. This decrease was due to a decrease in the net carrying value of assets and liabilities of approximately $1.74 million and distribution (declared) reversed, net of approximately $0.35 million.
During the nine months ended March 31, 2026, the Company:
Accrued interest earnings through February 15, 2028 of approximately $1.94 million.
Accrued additional costs to be incurred relating to the construction defect claim asserted against the Development Entity of approximately $1.10 million. The additional accrual reflects an increase in estimated costs for the initial phase and additional repair and cost estimates for the subsequent phases of repair.
Accrued approximately $3.51 million relating to changing the estimated completion date of the Company’s liquidation activities from February15, 2027 to February 15, 2028. The additional costs are primarily legal and other professional fees and payroll and payroll-related costs.
For the nine months ended March 31, 2025
The following is a summary of the Consolidated Statement of Changes in Net Assets in Liquidation for the nine months ended March 31, 2025 ($ in thousands):
Net assets in liquidation – Restricted for Qualifying Victims decreased by approximately $4.11 million during the nine months ended March 31, 2025. This decrease was due to an increase in the net carrying value of assets and liabilities of approximately $0.04 million and distributions declared of approximately $4.15 million. As of March 31, 2025, the Trust has completed its activities related to the liquidation of the Forfeited Assets.
Net assets in liquidation – All Interestholders increased approximately $7.46 million during the nine months ended March 31, 2025. This increase was due to an increase in the net carrying value of assets and liabilities of approximately $7.39 million and an increase from distributions (declared) reversed, net of approximately $0.07 million from claims being disallowed or Class A Interests being cancelled.
For the three months ended December 31, 2024
The following is a summary of the Consolidated Statement of Changes in Net Assets in Liquidation for the three months ended December 31, 2024 ($ in thousands):
Net assets in liquidation – Restricted for Qualifying Victims decreased by approximately $4.12 million during the three months ended December 31, 2024. This decrease was due to an increase in the net carrying value of assets and liabilities of approximately $0.03 million and distributions declared of approximately $4.15 million.
Net assets in liquidation – All Interestholders increased approximately $4.19 million during the three months ended December 31, 2024. This increase was due to an increase in the net carrying value of assets and liabilities of approximately $4.19 million.
(2)
(2) Net
of 5% payable to the Liquidation Trustee of approximately $5,000.$267,000.
During the threenine months ended DecemberMarch 31, 2024,2025, the Company:
Received net proceeds from the sale of Forfeited Assets of approximately $1,000.$0.02 million.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Recognized an insurance receivable of approximately $4.32 million relating to the initial repair of the construction defect.
Recorded approximately $0.10 million for the settlement of Causes of Action, net of 5% payable to the Liquidation Trustee.
Paid development costs of approximately $0.55 million.
Paid general and administrative costs of approximately $1.92 million, including approximately $0.07 million of board member fees and expenses, approximately $0.28 million of payroll and other general and administrative costs, approximately $1.31 million of professional fees and approximately $0.26 million paid to the Liquidation Trustee.
For the six months ended December 31, 2025
The following is a summary of the Consolidated Statement of Changes in Net Assets in Liquidation for the six months ended December 31, 2025 ($ in thousands):
Net assets in liquidation – Restricted for Qualifying Victims: As of December 31, 2025, the Trust has completed its activities related to the liquidation of Forfeited Assets.
Net assets in liquidation – All Interestholders increased by approximately $1.23 million during the six months ended December 31, 2025. This increase was due to an increase in the net carrying value of assets and liabilities of approximately $0.88 million and distribution (declared) reversed, net of approximately $0.35 million.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)
During the six months ended December 31, 2025, the Company:
Reversed distributions, net of approximately $0.35 million.
Paid development costs of approximately $1.02 million.
Paid general and administrative costs of approximately $2.37 million, including approximately $0.15 million of board member fees and expenses, approximately $0.73 million of payroll and other general and administrative costs, and approximately $1.49 million of professional fees.
For the six months ended December 31, 2024
The following is a summary of the Consolidated Statement of Changes in Net Assets in Liquidation for the six months ended December 31, 2024 ($ in thousands):
Net assets in liquidation – Restricted for Qualifying Victims decreased by approximately $4.11 million during the six months ended December 31, 2024. This decrease was due to an increase in the net carrying value of assets and liabilities of approximately $0.04 million and distributions declared of approximately $4.15 million.
WBQNL insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding WBQNL (13F)
None of the 59 investors we track reported a position in their latest 13F.