Causes of Action

9 Months Ended

Mar. 31, 2023

13)	Causes of Action

One of the Trust’s liquidation activities is to litigate and/or settle Causes of Action. The main areas of litigation have involved actions against Comerica Bank, law firms and individual attorneys and avoidance actions. The Company recognizes recoveries from settlements when an agreement is executed and collectability is reasonably assured.

In December 2021, the Trust received court approval of its agreement to settle its litigation against Comerica Bank. The Trust has also pursued litigation against nine law firms and ten individual attorneys. The cases against two law firms and two individual attorneys have been settled. As of March 31, 2023, litigation against the other seven law firms and eight individual attorneys are in various stages. See Note 15.

The Trust has also filed numerous avoidance actions, most of which have been resolved, resulting in recoveries by or judgments in favor of the Trust. As of April 30, 2023, 46 legal actions remain pending. Additionally, since February 15, 2019 and as of March 31, 2023, the Trust has obtained default and stipulated judgments related to certain avoidance actions. It is unknown at this time how much, if any, will ultimately be collected on the judgments. Therefore, the Company has not recognized any recoveries from these judgments.

During the three and nine months ended March 31, 2023 and 2022, the Company recorded the following amounts from the settlement of Causes of Action ($ in thousands):

	For the Three Months Ended March 31,				For the Nine Months Ended March 31,
	2023		2022		2023		2022

Other settlement recoveries	$	-	$	468	$	231	$	1,868
Comerica Bank		-		-		-		24,815
Total	$	-	$	468	$	231	$	26,683

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.