Formation, Organization and Description of Business

3 Months Ended

Sep. 30, 2025

Formation, Organization and Description of Business [Abstract]

Formation, Organization and Description of Business

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Formation, Organization and Description of Business

Formation

Woodbridge Liquidation Trust (the “Trust”) was established (i) for the purpose of collecting, administering, distributing and liquidating the Trust assets for the benefit of the Trust beneficiaries in accordance with the Liquidation Trust Agreement and the First Amended Joint Chapter 11 Plan of Liquidation of Woodbridge Group of Companies, LLC and its chapter 11 affiliated debtors each a “Debtor” (and collectively, the “Debtors”) dated August 22, 2018 (as amended, modified, supplemented or restated from time to time, the “Plan”); (ii) to resolve disputed claims asserted against the Debtors; (iii) to litigate and/or settle causes of action (“Causes of Action”); and (iv) to pay certain allowed claims and statutory fees, as required by the Plan. The Trust was formed on February 15, 2019 (the “Plan Effective Date”) as a statutory trust under Delaware law.

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

As further discussed in Note 8, the Trust has two classes of liquidation trust interests: Class A Liquidation Trust Interests (the “Class A Interests”) and Class B Liquidation Trust Interests (the “Class B Interests”). The holders of Class A Interests and Class B Interests are collectively referred to as “All Interestholders” or “Interestholders”. Class A Interests and Class B Interests are collectively referred to as “Liquidation Trust Interests”.

On December 24, 2019, the Trust’s Registration Statement on Form 10 became effective under the Securities Exchange Act of 1934 (the “Exchange Act”). The trading symbol for the Trust’s Class A Interests is WBQNL. Bid and asked prices for the Trust’s Class A Interests are quoted on the OTC Link® ATS, the Securities and Exchange Commission ( the “SEC”) registered alternative trading system. The Class A Interests are eligible for the Depository Trust Company’s Direct Registration System services. The Class B Interests are not registered with the SEC.

Organization

The Trust does not have directors, executive officers, or employees. All of the management and executive authority of the Trust resides with the Liquidation Trustee, subject to the supervision of a five-member supervisory board (the “Supervisory Board”). The Wind-Down Entity is separately managed by its board of managers.

The Liquidation Trust Interests are non-voting. The holders of the Class A Interests and the Class B Interests have the same rights, except with respect to certification, transferability and payment of distributions. See Note 9 regarding the priority and manner of distribution of available cash to Interestholders.

The Wind-Down Entity, from time to time, makes distributions to the Trust, as available. The Trust in turn makes distributions, from time to time, to the Trust beneficiaries, as available.

As of September 30, 2025, the Trust was to be terminated upon the first to occur of (i) the making of all distributions required to be made and a determination by the Liquidation Trustee that the pursuit of additional Causes of Action held by the Trust is not justified or (ii) March 31, 2026, subject to the extension of such date by the Bankruptcy Court. The Bankruptcy Court may approve an extension of the term if deemed necessary to facilitate or complete the recovery on, and liquidation of the, Trust assets.

During the year ended June 30, 2025, the Company concluded that its liquidation activities would not be completed by March 31, 2026 due to the pending construction defect claim against one of the Wind-Down Subsidiaries (the “Development Entity”) and related litigation. This litigation includes the Development Entity’s claims against its primary and excess insurers, and the prior owner, contractors, and other professionals involved in the development of the site and the construction of the home. See Notes 5, 13 and 14 for additional information. The Company currently projects a revised estimated completion date for the Company’s liquidation activities of approximately February 15, 2027.

On September 22, 2025, the Trust filed a motion with the Bankruptcy Court to extend the Trust termination date from March 31, 2026 to February 15, 2027. The Company expects that the Bankruptcy Court will grant the motion, as the extension is needed to resolve the construction defect claim and the related litigation. See Note 14 for additional information.

If it deems it necessary, or appropriate, the Company may seek one or more additional extensions of the termination date. If the Trust is extended beyond February 15, 2027, the Company will incur costs in addition to those that have been accrued to date.

Pursuant to the Wind-Down Entity’s Limited Liability Company Agreement, the Wind-Down Entity shall dissolve upon the first to occur of the following: (i) the written consent of the Trust, (ii) the entry of a decree of judicial dissolution under Section 18-802 of the Delaware LLC Act and (iii) the sale or other disposition of all of the Wind-Down Entity’s assets.

Description of Business

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. With the exception of the activities described below, the Company’s operations are substantially complete.

As of September 30, 2025, the Trust is prosecuting four remaining Causes of Action acquired by the Trust pursuant to the Plan (see Notes 11 and 14 for additional information) and pursuing the collection of settlement receivables and judgments. As of September 30, 2025, the Trust owns one single-family home subject to a life estate (see Note 4 for additional information).

As of September 30, 2025, the Wind-Down Entity’s primary activity is addressing the resolution of a construction defect claim and the related litigation (see Note 5, 13 and 14 for additional information). The Wind-Down Entity has sold all of its real estate assets.

As more fully discussed in Note 2, the Company uses the Liquidation Basis of Accounting. Net assets in liquidation represent the remaining estimated aggregate value available to Interestholders upon liquidation, with no discount for the timing of proceeds (undiscounted). Actual net liquidation proceeds, other recoveries and liquidation costs may differ materially from the estimated amounts due to the uncertainty in the timing and cost of completing the liquidation activities.

No assurance can be given that total distributions will equal or exceed the estimate of net assets in liquidation presented in the consolidated statements of net assets in liquidation. Furthermore, it is not possible to predict the timing of any additional distributions to Interestholders, if any. See Note 9 for additional information relating to the suspension of distributions to Interestholders.