Accrued Liquidation Costs

3 Months Ended

Sep. 30, 2025

Accrued Liquidation Costs [Abstract]

Accrued Liquidation Costs

5)

Accrued Liquidation Costs

The following is a summary of the items included in accrued liquidation costs as of September 30, 2025 (unaudited), with comparative information as of June 30, 2025 ($ in thousands):

		September 30, 2025 (unaudited)		June 30, 2025
Development costs	$	11,245	$	11,572
General and administrative costs:
Legal and other professional fees		7,294		8,128
Directors and officers insurance		3,115		3,115
Payroll and payroll-related		2,020		2,299
Board fees and expenses		425		500
Other		486		529
Total general and administrative costs		13,340		14,571
Total accrued liquidation costs	$	24,585	$	26,143

At September 30, 2025, the Company’s accrued development costs consist of costs incurred but not yet paid, and costs to be incurred, in connection with the construction defect claim asserted against the Development Entity. These costs include the estimated costs for the initial repair phase of the subject property, as well as estimated costs for the evaluation and engineering and preliminary estimated costs of subsequent phases of repair based on an initial scope of work. Accrued development costs also include estimated legal and professional fees for coordinating the pursuit of litigation related to the construction defect and related insurance claims based on information available to date.

Additional repairs beyond the initial phase will be necessary. The scope of work for the subsequent repairs, timing and cost are based on preliminary estimates, and actual costs may vary significantly from such estimates. The costs for the subsequent phases of repair, as well as related legal and professional fees, will be reviewed quarterly, and the Company will record any significant changes. A portion of the accrued development costs relate to estimated reserves for contingent liabilities, including other potential construction defect claims, and the administration of such claims after the Company’s liquidation activities are completed. See Notes 13 and 14 for additional information.

The Company is currently unable to estimate whether all or a portion of the total costs will ultimately be borne by third parties (including the Company’s insurers). Any future insurance recoveries will be recorded when they are deemed probable and estimable. See Notes 4 and 14 for additional information. Insurance reimbursements received to date are included in cash, cash equivalents and short-term investments and have not been netted against accrued development costs in the Company's consolidated financial statements.

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 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. 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 termination date of the Trust 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 the Trust is extended beyond February 15, 2027, the Company will incur costs in addition to those that have been accrued to date.