|
Dear Victims, Trust Beneficiaries and Interested Parties: As we move closer to being able to make the Wave III distribution payments, we thought it a good time to give an overall update on the status of matters affecting the 1031 Debtors Liquidation Trust.
As previously reported, settlement agreements providing for the Wave III distributions have been reached with Foley & Lardner, Kutak Rock, Jordan Burt, Citibank and Boulder Group/MacDowell. Attached is a chart setting out those settlements as well as a calculation of the anticipated Wave III distribution. The settlement payments are allocated 50% to the Trust and 50% to the class action. The settlement payments are not due until the class action court’s settlement hearing decisions are non-appealable. The settlement with Citibank also requires Bankruptcy Court approval, and that motion is scheduled to be heard by the Bankruptcy Court on June 23, 2011. The final approval hearing for all of the Wave III settlement agreements in the class suit is set to be heard by the class action court on June 27, 2011. The appeal period then runs for 30 days after an order is entered. Payments from the settling parties will be received as scheduled in the agreement; these payment times generally are within 30 days of the appeal period passing. Exceptions are Boulder Capital, which provides for $2,000,000 split evenly between the Liquidation Trust and the Class, and payments on that settlement are to be made over a number of years, subject to the MacDowell entities achieving certain financial goals. Additionally, payments for the settlement with Foley and Lardner are scheduled to be made $850,000, split evenly between the Liquidation Trust and the Class, within seven business days of the receipt of the non-appealable order and the $850,000 balance, split evenly between the Liquidation Trust and the Class, in early 2012.
In addition to the Wave III settlement, the Liquidation Trust was also able to recover $240,000, the full amount of which was paid to the Trust, in a preference matter for a payment made outside the ordinary course of business and within the 90 days prior to the bankruptcy filing. Based on all of the foregoing, and subject to obtaining the required court approvals, it would appear that a Wave III distribution payment from the Liquidation Trust in an amount of approximately 5% will go out during the latter half of September. The Wave III distribution from the Class should occur at approximately the same time. You will note that we are holding back $2,500,000 so that we have adequate funding for the Silicon Valley Law Group litigation and the expenses of the Liquidation Trust. This matter continues in discovery, with an anticipated trial date to be early next year.
Certainly one of the most complex areas for discussion is the Haynesville Shale situation in Shreveport, Louisiana, where the Liquidation Trust owns the sub-surface mineral rights, subject to a Court-approved contractual revenue sharing arrangement with Cordell Funding. Our particular property falls within the boundaries of four separate sections within the Caddo Parrish. Of these sections, three have been drilled by Chesapeake Energy, and the Liquidation Trust is asserting that it is entitled to a share of revenues from those wells.
We have been in contact with Chesapeake and are working to negotiate favorable terms. We will keep you updated as continued progress is made.
Best Regards, THE 1031 DEBTORS LIQUIDATION TRUST Gerard A. McHale, Jr. Gerard A. McHale, Jr., P.A. Trustee
|
