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OFFON

WOODBRIDGE LIQUIDATION TRUST

(WBQNL)
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WOODBRIDGE LIQUIDATION TRUST : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

02/16/2021 | 06:39am EDT
The following discussion and analysis should be read in conjunction with the
accompanying unaudited consolidated financial statements of Woodbridge
Liquidation Trust and the related notes thereto. The Trust, the Remaining
Debtors, the Wind-Down Entity and the Wind-Down Subsidiaries, as used herein,
are defined in Note 1 to the consolidated financial statements and are
collectively referred to herein as the Company.

Forward-Looking Statements


Certain statements included in this Quarterly Report on Form 10-Q are
forward-looking statements. Those statements include, without limitation,
financial guidance, and projections and statements with respect to expectation
of future financial condition, changes in net assets in liquidation, cash flows,
plans, targets, goals, objectives and performance of the Trust. Such
forward-looking statements also include statements that are preceded by,
followed by, or that include the words "believes", "estimates", "plans",
"expects", "intends", "is anticipated", "will continue", "project", "outlook",
"evaluate",  "may", "could", "would", "should" and similar expressions, and all
other statements that are not historical facts. All such forward-looking
statements are based on the Trust's current expectations and involve risks and
uncertainties which may cause actual results to differ materially from those set
forth in such statements. Such risks and uncertainties include the amount of
sales proceeds, timing of sales of real estate assets, timing and amount of
funds needed to complete construction of single-family homes, amount of general
and administrative costs, the number and amount of successful litigations and/or
settlements and the ability to recover thereon, the amount of funding required
to continue litigations, the continuing impact of the COVID-19 pandemic,
interest rates, adverse weather conditions in the regions in which properties to
be sold are located, economic and political conditions, changes in tax and other
governmental rules and regulations applicable to the Trust and its subsidiaries
and other risks and uncertainties identified in Item 1A. Risk Factors of the
Company's Annual Report on Form 10-K, or contained in any of the Trust's
subsequent filings with the SEC including in Part II. Other Information, Item
1A. Risk Factors of this Form 10-Q. These risks and uncertainties are beyond the
ability of the Trust to control, and in many cases, the Trust cannot predict the
risks and uncertainties, that could cause its actual results to differ
materially from those indicated by the forward-looking statements.

In connection with the "safe harbor" provisions of the Securities Act of 1933
and the Exchange Act, the Trust has identified and is disclosing important
factors, risks and uncertainties that could cause its actual results to differ
materially from those projected in forward-looking statements made by the Trust,
or on the Trust's behalf. (See "Part II. Other Information, Item 1A. Risk
Factors" of this Form 10-Q.) These cautionary statements are to be used as a
reference in connection with any forward-looking statements. The factors, risks
and uncertainties identified in these cautionary statements are in addition to
those contained in any other cautionary statements, written or oral, which may
be made or otherwise addressed in connection with a forward-looking statement or
contained in any of the Trust's subsequent filings with the SEC. Because of
these factors, risks and uncertainties, the Trust cautions against placing undue
reliance on forward-looking statements. Although the Trust believes that the
assumptions underlying forward-looking statements are currently reasonable, any
of the assumptions could be incorrect or incomplete, and there can be no
assurance that forward-looking statements will prove to be accurate.
Forward-looking statements speak only as of the date on which they are made.
Except as may be required by law, the Trust does not undertake any obligations
to modify, update or revise any forward-looking statement to take into account
or otherwise reflect subsequent events, corrections in or revisions of
underlying assumptions, or changes in circumstances arising after the date that
the forward-looking statement was made.

Overview


Pursuant to the Plan, the Trust was formed on February 15, 2019 to hold, either
directly or indirectly through the Wind-Down Entity and the Wind-Down
Subsidiaries, the assets and equity interests formerly owned by the Debtors.
Each of the real properties formerly owned by the Debtors was, as of February
15, 2019, owned by one of the Wind-Down Subsidiaries. The purpose of the
Wind-Down Entity and the Wind-Down Subsidiaries is to develop (as applicable),
market and sell those properties to generate cash. Assets formerly owned by the
Debtors other than real estate assets and certain cash were transferred to the
Trust. The purpose of the Trust is to receive remittances of cash from the
Wind-Down Entity, to resolve disputed claims, to prosecute the Causes of Action,
to pay allowed unimpaired claims and, subject to the payment of Trust expenses
and the retention of various reserves, to make distributions of cash to
Interestholders in accordance with the Plan.

                                       22

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Index

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Continued)




The Trust operates pursuant to the Plan and the Trust Agreement. The Trust was
formed as a Delaware statutory trust and is administered by the liquidation
trustee under the supervision of its Supervisory Board. The Wind-Down Entity, a
wholly-owned subsidiary of the Trust, operates pursuant to the Plan and the
Wind-Down Entity LLC Agreement. The Wind-Down Entity was formed as a Delaware
limited liability company and is administered by its Board of Managers, one of
which is the chief executive officer. One member of the Board of Managers is
also a member of the Supervisory Board of the Trust.

The Bankruptcy Court has retained certain jurisdictions regarding the Trust, the
liquidation trustee, the Supervisory Board, the Wind-Down Entity, the Board of
Managers, and assets of the Trust and the Wind-Down Entity, including the
determination of all disputes arising out of or related to administration of the
Trust and the Wind-Down Entity and its subsidiaries.

As of December 31, 2020, the number of Liquidation Trust Interests outstanding in each class is as follows:


Class of Interest                      Number Outstanding

Class A Liquidation Trust Interests             11,516,044

Class B Liquidation Trust Interests                676,312



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 claims are settled
by cancelling Liquidation Trust Interests.

On December 24, 2019, the Trust's Registration Statement on Form 10 became
effective under the Exchange Act. The trading symbol for the Trust's Class A
Interests is WBQNL. The Trust's Class A Interests are quoted on OTC Link ATS,
the SEC-registered alternative trading system. The Class A Interests are
eligible for the Depository Trust Company's DRS services.

Since the Plan Effective Date through December 31, 2020, the Wind-Down
Subsidiaries have disposed of approximately 131 properties for aggregate net
sales proceeds of approximately $403.73 million.  As of December 31, 2020, the
Company owned fourteen real estate assets with a gross carrying value of
approximately $164.82 million. Therefore, it is unlikely that the amount of net
sales proceeds that the Company will receive in the future will be consistent
with the amount received from the Plan Effective Date through December 31, 2020.
During the three months ended December 31, 2020 and 2019, the Company completed
construction of zero and three single-family homes, respectively. During the six
months ended December 31, 2020, the Company sold one single-family home that was
under construction. The buyer assumed the remaining obligations to complete the
construction of the property. The Company expects to complete the liquidation of
its assets during the fiscal year ending June 30, 2023.

                                       23
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                                     Index

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Continued)

Discussion of the Company's Operations

Three months ended December 31, 2020

Consolidated Statement of Changes in Net Assets in Liquidation

                  For the three months ended December 31, 2020
                                ($ in thousands)

Net assets in liquidation, as of September 30, 2020 $ 239,723 Change in assets and liabilities: Change in carrying value of assets and liabilities, net 472 Distributions (declared) reversed, net

                      (29,719 )
Net change in assets and liabilities                        (29,247 )

Net assets in liquidation, as of December 31, 2020 $ 210,476




Net assets in liquidation decreased approximately $29.25 million during the
three month period ended December 31, 2020. This decrease was due to: (a) an
increase in the carrying value of assets and liabilities  of approximately $0.47
million and (b) net distributions of approximately $29.72 million. The
components of the approximately $0.47 million net change in the carrying value
of assets and liabilities are as follows ($ in thousands):

Settlement recoveries recognized, net                     $    530
Carrying value in excess of sales proceeds                  (1,277 )
Remeasurement of assets and liabilities, net                 1,147
Other                                                           72

Change in carrying value of assets and liabilities, net $ 472

During the three months ended December 31, 2020, the Company:

• Declared a distribution of $2.56 per Class A Liquidation Trust Interest, which

totaled approximately $29.95 million.

• Sold one single-family home, two lots and two other properties for net proceeds

of approximately $87.67 million.

• Signed agreements to settle Causes of Action for payment to the Trust of

approximately $0.60 million.

• Paid construction costs of approximately $8.43 million relating to

single-family homes under development.

• Paid holding costs of approximately $2.26 million.

• Paid general and administrative costs of approximately $3.08 million, including

approximately $0.09 million of board member fees and expenses, approximately

$2.45 million of payroll and other general and administrative costs and

approximately $0.54 million of post Plan Effective Date professional fees.




                                       24
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                                     Index

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Continued)

Three months ended December 31, 2019

Consolidated Statement of Changes in Net Assets in Liquidation

                  For the three months ended December 31, 2019
                                ($ in thousands)

Net assets in liquidation, as of September 30, 2019 $ 333,582 Change in assets and liabilities:

Change in carrying value of assets and liabilities, net 960

  Distributions (declared) reversed, net                           41
   Net change in assets and liabilities                         1,001

Net assets in liquidation, as of December 31, 2019 $ 334,583




Net assets in liquidation increased approximately $1.00 million during the three
months ended December 31, 2019. This increase was due to:  (a) an increase in
the carrying value of assets and liabilities of approximately $0.96 million and
(b) distributions that were reversed for disallowed claims of approximately
$0.04 million. The components of the approximately $0.96 million net change in
the carrying value of assets and liabilities, net are as follows ($ in
thousands):

Reduction of state, local and other taxes                   $  2,890
Settlement recoveries recognized, net                          1,402
Sales proceeds in excess of carrying value                     1,424
Remeasurement of assets and liabilities, net                  (5,040 )
Other                                                            284

Change in carrying value of assets and liabilities, net $ 960

During the three months ended December 31, 2019, the Company:

• Sold four single-family homes, six lots, one other property and collected a

principal paydown on one secured loan for net proceeds of approximately $82.97

   million.



• Signed agreements to settle Causes of Action of approximately $1.48 million.

• Paid construction costs of approximately $11.45 million relating to

single-family homes under development.

• Paid holding costs of approximately $5.16 million.

• Paid general and administrative costs of approximately $6.06 million, including

approximately $0.31 million of board member fees and expenses, approximately

$1.17 million of payroll and other general and administrative costs and

approximately $4.58 million of post Plan Effective Date professional fees.

• Paid professional fee incurred before the Plan Effective Date of approximately

   $0.36 million.



                                       25
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                                     Index

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Continued)

Six months ended December 31, 2020

Consolidated Statement of Changes in Net Assets in Liquidation

                   For the six months ended December 31, 2020
                                ($ in thousands)

Net assets in liquidation, as of June 30, 2020            $ 264,517

Change in assets and liabilities: Change in carrying value of assets and liabilities, net 5,555 Distributions (declared) reversed, net

                      (59,596 )
Net change in assets and liabilities                        (54,041 )

Net assets in liquidation, as of December 31, 2020 $ 210,476




Net assets in liquidation decreased approximately $54.04 million during the six
month period ended December 31, 2020. This decrease was due to: (a) an increase
in the carrying value of assets and liabilities of approximately $5.55 million
and (b) net distributions of approximately $59.59 million. The components of the
approximately $5.55 million net change in the carrying value of assets and
liabilities are as follows ($ in thousands):

Settlement recoveries recognized, net                     $  6,687
Carrying value in excess of sales proceeds                  (1,540 )
Remeasurement of assets and liabilities, net                   302
Other                                                          106

Change in carrying value of assets and liabilities, net $ 5,555

During the six months ended December 31, 2020, the Company:

• Declared two distributions, each of $2.56 per Class A Liquidation Trust

Interest, which totaled approximately $59.92 million.

• Sold five single-family homes, two lots and eleven other properties for net

proceeds of approximately $121.16 million.

• Signed agreements to settle Causes of Action for payment to the Trust of

approximately $7.18 million.

• Paid construction costs of approximately $16.27 million relating to

single-family homes under development.

• Paid holding costs of approximately $3.36 million.

• Paid general and administrative costs of approximately $5.00 million, including

approximately $0.18 million of board member fees and expenses, approximately

$3.66 million of payroll and other general and administrative costs and

approximately $1.16 million of post Plan Effective Date professional fees.




                                       26
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                                     Index

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Continued)

Six months ended December 31, 2019

Consolidated Statement of Changes in Net Assets in Liquidation

                   For the six months ended December 31, 2019
                                ($ in thousands)

Net assets in liquidation, as of June 30, 2019            $ 329,971

Change in assets and liabilities: Change in carrying value of assets and liabilities, net 4,535 Distributions (declared) reversed, net

                           77
Net change in assets and liabilities                          4,612

Net assets in liquidation, as of December 31, 2019 $ 334,583




Net assets in liquidation increased approximately $4.61 million during the six
months ended December 31, 2019. This increase was due to:  (a) changes in the
carrying value of assets and liabilities, net of approximately $4.53 million and
(b) distributions that were reversed for disallowed claims of approximately
$0.08 million. The components of the approximately $4.53 million net change in
the carrying value of assets and liabilities, net are as follows ($ in
thousands):

Reduction of state, local and other taxes                 $  2,890
Settlement recoveries recognized, net                        3,476
Sales proceeds in excess of carrying value                   3,291
Remeasurement of assets and liabilities, net                (5,314 )
Other                                                          192

Change in carrying value of assets and liabilities, net $ 4,535

During the six months ended December 31, 2019, the Company:

• Sold eight single-family homes, 16 lots, two other properties, settled two

secured loans and collected a principal paydown on one secured loan for net

proceeds of approximately $109.93 million.

• Signed agreements to settle Causes of Action of approximately $3.67 million.

• Paid construction costs of approximately $25.54 million relating to

single-family homes under development.

• Paid holding costs of approximately $6.58 million.

• Paid general and administrative costs of approximately $11.57 million,

including approximately $0.59 million of board member fees and expenses,

approximately $2.54 million of payroll and other general and administrative

costs and approximately $8.44 million of post Plan Effective Date professional

   fees.



• Paid professional fee incurred before the Plan Effective Date of approximately

   $0.36 million.



Liquidity and Capital Resources

Liquidity


The Company's primary sources for meeting its capital requirements are its cash,
availability under the LOC,  proceeds from the sale of its real estate assets
and recoveries from Causes of Action. The Company's primary uses of funds are
and will continue to be for distributions, development costs, holding costs and
general and administrative costs, all of which the Company expects to be able to
adequately fund over the next twelve months from its primary sources of capital.

                                       27
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                                     Index

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Continued)

Capital Resources

In addition to consolidated cash and cash equivalents at December 31, 2020 of approximately $133.22 million (of which approximately $6.62 million is restricted), the capital resources available to the Company and its uses of liquidity are as follows:

Revolving Line of Credit


On June 19, 2020, two wholly-owned subsidiaries of the Wind-Down Entity entered
into a $25,000,000 revolving LOC. The LOC may be increased to up to $30,000,000
with the pledge of one or more additional properties and lender approval. The
LOC matures on June 19, 2022, but may be extended for one additional year
thereafter. The LOC required the borrowers to establish an interest reserve of
$1,750,000, which is to be used to pay the potential monthly interest payments.
Outstanding borrowings bear interest at a fixed rate of 3.50% per annum.
Indebtedness under the LOC is secured by a deed of trust on one property, the
personal property associated therewith and the interest reserve. The Wind-Down
Entity is the guarantor of the LOC. The Company is required to keep a cash
balance of  $20,000,000 on deposit with the lender in order to avoid a
non-compliance fee of 2% of the shortfall in the required deposit and is
required to comply with various covenants.

The property that was collateral for the LOC was sold in December 2020. The LOC
agreement provides that the borrower has 60 days after the sale of the property
that was collateral to add an additional borrower(s) and additional
property(ies) as collateral. During the 60-day period, the available borrowings
under the LOC were reduced to $100,000.

On February 11, 2021, the LOC was amended.  Two additional wholly owned
subsidiaries of the Wind-Down Entity were joined to the LOC as co-borrowers and
two properties were added as replacement collateral as allowed for in the
original agreement.  As a result of this amendment, the available borrowing
commitment was adjusted back up to $25,000,000.  The maturity of the LOC was
amended to January 31, 2023 with an option to extend for one additional year.
There were no other significant changes to the LOC.

No amounts were outstanding under the LOC as of December 31, 2020 and February 12, 2021.


Sales of Real Estate Assets

The Wind-Down Entity and the Wind-Down Subsidiaries are in the process of
developing, marketing and selling their real estate assets, all of which are
held for sale, with the exception of seven single-family homes which were under
development as of December 31, 2020. There can be no assurance as to the amount
of net proceeds that the Company will receive from the sale of real estate
assets or when the net sales proceeds will be received. As of December 31, 2020,
the Company owned fourteen real estate assets with a gross carrying value of
approximately $164.82 million. Therefore, it is unlikely that the net proceeds
for the three and six months ended December 31, 2020 will be indicative of
future net proceeds, which may be significantly lower. In addition, it may take
longer to sell the properties than the Company has estimated.

Recoveries


During the three and six months ended December 31, 2020, the Company recognized
approximately $0.58 and $6.74 million, net, respectively, from the settlement of
Causes of Action. There can be no assurance that the amounts the Company
recovers from settling Causes of Action, Fair Funds recoveries and Forfeited
Assets' recoveries in the future will be consistent with the amount recovered
during the three and six months ended December 31, 2020.

                                       28
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                                     Index

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Continued)

Forfeited Assets


The Trust is in the process of transferring the Forfeited Assets. The assets
consist of cash and other assets. The Trust is required to distribute the net
sale proceeds from liquidating the Forfeited Assets to the Qualifying Victims.
Qualifying Victims are the former holders of Class 3 and Class 5 Claims and
their permitted assigns. Former holders of Class 4 claims are not Qualifying
Victims. Because of the requirement to distribute the net sale proceeds of the
Forfeited Assets to the Qualifying Victims, the net sales proceeds will be
presented in the consolidated statement of net assets as restricted net assets
in liquidation. At December 31, 2020, approximately 11,444,832 of the 11,516,044
Class A Interests were held by Qualifying Victims.

Uses of Liquidity


The primary uses of the Company's liquidity are to pay (a) distributions
payable, (b) development costs, (c) holding costs, and (d) general and
administrative costs. As of December 31, 2020, the Company's total liabilities
were approximately $80.35 million. The total liabilities recorded as of December
31, 2020 may not be indicative of the costs paid in future periods, which may be
significantly higher.

Given current cash and cash equivalent balances, projected sales of real estate
assets, availability under the LOC, Causes of Action recoveries, distributions
declared and expected cash needs, the Company does not expect a deficiency in
liquidity in the next twelve months. Due to the uncertain nature of future net
sales proceeds, recoveries and costs to be incurred, it is not possible to be
certain that the current liquidity will be adequate to cover all future
financial needs of the Company.  Creating contingent obligation agreements
and/or seeking methods to reduce professional costs, including legal fees, and
administrative costs are strategies that could be undertaken to address
liquidity issues should they arise. These strategies could impact the Company's
ability to maximize recoveries from the settlement of Causes of Action.

Distributions


Distributions will be made at the sole discretion of the Liquidation Trustee in
accordance with the provisions of the Plan and the Trust Agreement. As of
February 12, 2021, the Liquidation Trustee has declared six distributions to the
Class A Interestholders. The distributions are paid on account of the
then-allowed claims and a deposit is made into a restricted cash account for
amounts (a) payable for Class A Interests that may be issued in the future upon
the allowance of unresolved claims, (b) in respect of Class A Interest on
account of recently allowed claims, (c) to holders of Class A Interests who
failed to cash distribution checks mailed in respect of prior distributions, (d)
that were withheld due to pending avoidance actions and (e) in respect of which
the Trust is waiting for further beneficiary information.

                                       29
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                                     Index

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Continued)




The following tables summarize the distributions declared, distributions paid
and the activity in the restricted cash account for the periods from February
15, 2019 (inception) through December 31, 2020 and from February 15, 2019
(inception) through February 12, 2021:

                                                                                       During the Period from February 15, 2019                                       During the Period From February 15, 2019
                                                                                        (inception) through December 31, 2020                                          (inception) through February 12, 2021
                                                                                                   ($ in Millions)                                                                ($ in Millions)
                                                     $ per                                                                 Distribution Reserve                                                           Distribution Reserve
                                     Date       Class A Interest        Total Declared                 Paid                      Account               Total Declared                 Paid                      Account

    Distributions Declared
    First                         3/15/2019    $             3.75     $             44.70       $             42.32       $                 2.38     $             44.70       $             42.32                         2.38
    Second                         1/2/2020                  4.50                   53.43                     51.19                         2.24                   53.43                     51.19                         2.24
    Third                         3/31/2020                  2.12                   25.00                     24.19                         0.81                   25.00                     24.19                         0.81
    Fourth                        7/13/2020                  2.56                   29.97                     29.24                         0.73                   29.97                     29.24                         0.73
    Fifth                         10/19/2020                 2.56                   29.95                     29.20                         0.75                   29.95                     29.20                         0.75
    Sixth                          1/7/2021                  4.28                       -                         -                            -                   50.01                     48.67                         1.34
    Subtotal                                   $            19.77     $            183.05       $            176.14       $                 6.91     $            233.06       $            224.81       $                 8.25

    Distributions Reversed
(a) Disallowed                                                                                                                             (1.97 )                                                                        (2.00 )
(b) Returned                                                                                                                                0.38                                                                           0.58
    Subtotal                                                                                                                               (1.59 )                                                                        (1.42 )

(c) Distributions Paid from Reserve Account                                                                                                (1.68 )                                                                        (1.84 )

    Distributions Payable, Net                                                                    as of 12/31/2020:       $                 3.64                                  as of 2/12/2021:       $                 4.99



(a)  As a result of claims being disallowed.
(b) Distribution checks returned or not cashed.
(c)  Paid as claims are allowed or resolved.

The liquidation trustee will continue to assess the adequacy of funds held and
expects to make additional cash distributions on account of Class A Interests,
but does not currently know the timing or amount of any such distribution(s).

Contractual Obligations


As of December 31, 2020, the Company has contractual commitments related to
construction contracts totaling approximately $17.70 million. The Company
expects to complete the construction of these single-family homes during the
fiscal year ending June 30, 2022. The Company has an office lease that expires
in August 2021. The Company expects that it will continue to lease office space
until the liquidation process is completed.

Off-Balance Sheet Arrangements


As of December 31, 2020, the Company did not have any off-balance sheet
arrangements, other than those disclosed under "Contractual Obligations" above,
that have or are reasonably likely to have a material effect on its consolidated
financial statements, liquidity or capital resources.

Quantitative Disclosures about Market Risk

As of December 31, 2020, the Company does not have any market risk exposure as defined by Securities and Exchange Commission Regulation 229.305.

Inflation


Until the Company completes the liquidation of its assets, it may be exposed to
inflation risks relating to increases in the costs of construction and other
accrued liquidation costs.

                                       30
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                                     Index

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Continued)

Critical Accounting Policies and Practices


The Company's consolidated financial statements are prepared in accordance with
U.S. GAAP. The accounting policies and practices that the Company believes are
the most critical are discussed below. These accounting policies and practices
require management to make decisions on subjective and/or complex matters that
may inherently be uncertain. Estimates are required to prepare the consolidated
financial statements in conformity with U.S. GAAP. Significant estimates,
judgments and assumptions are required in a number of areas, including, but not
limited to, the sales price of real estate assets, selling costs, development
costs, holding costs and general and administrative costs to be incurred until
the completion of the liquidation of the Company. In many instances, changes in
the accounting estimates are likely to occur from period to period. Actual
results may differ from the estimates. The Company believes the current
assumptions and other considerations used in preparing the consolidated
financial statements are appropriate. However, if actual experience differs from
the assumptions and other considerations used in estimating amounts reflected in
the Company's consolidated financial statements, the resulting changes could
have a material adverse effect on the Company's net assets in liquidation.

Liquidation Basis of Accounting


Under the liquidation basis of accounting, all assets are recorded at their
estimated net realizable value or liquidation value, which represents the
estimated amount of net cash that may be received upon the disposition of the
assets (on an undiscounted basis). Liabilities are measured in accordance with
U.S. GAAP that otherwise applies to those liabilities. The Company has not
recorded any amount for future recoveries from unsettled Causes of Action, Fair
Funds or Forfeited Asset recoveries in the accompanying consolidated financial
statements because they cannot be reasonably estimated.

Valuation of Real Estate


The measurement of real estate assets held for sale is based on current
contracts (if any), estimates and other indications of sales value, net of
estimated selling costs. To determine the value of real estate assets held for
sale, the Company considers the three traditional approaches to value (cost,
income and sales comparison) commonly used by the real estate appraisal
community. The applicability and relevancy of each valuation approach as applied
may differ by asset. In most cases, the sales comparison approach was accorded
the greatest weight. This approach compares a property to other properties with
similar characteristics that have recently sold. To validate management's
estimate, the Company also considers opinions from qualified real estate
professionals and local real estate brokers and, in some cases, obtained third
party appraisals.

Accrued Liquidation Costs

The estimated costs associated with implementing and completing the Company's
plan of liquidation are recorded as accrued liquidation costs. The Company has
also recorded the estimated development costs to be incurred to prepare the
assets for sale as well as the estimated holding costs to be incurred until the
projected sale date and the estimated general and administrative costs to be
incurred until the completion of the liquidation of the Company.

Changes in Carrying Value


On a quarterly basis, the Company will review the estimated net realizable
values and liquidation costs and record any significant variances. The Company
will also evaluate an asset when it is under contract for sale and the buyer's
contingencies have been removed. During the period that this occurs, the
carrying value of the asset and the estimated closing and other costs will be
adjusted, if necessary. If the Company has a change in its plan for the
disposition of an asset, the carrying value will be adjusted to reflect this
change in the period that the change is approved. The change in value may also
include a change to the accrued liquidation costs related to the asset.

All changes in the estimated liquidation value of the Company's assets, real
estate held for sale, or other assets and liabilities are reflected as a change
to the Company's net assets in liquidation.

                                       31
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                                     Index

PART I. FINANCIAL INFORMATION (CONTINUED)

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08/12WOODBRIDGE LIQUIDATION TRUST : Other Events (form 8-K)
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05/17WOODBRIDGE LIQUIDATION TRUST : Management's Discussion and Analysis of Financial..
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05/14WOODBRIDGE LIQUIDATION TRUST : Other Events, Financial Statements and Exhibits (..
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05/14Woodbridge Liquidation Trust Announces Cash Distribution, Payable on or About..
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02/16WOODBRIDGE LIQUIDATION TRUST : Management's Discussion and Analysis of Financial..
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01/07WOODBRIDGE LIQUIDATION TRUST : Other Events, Financial Statements and Exhibits (..
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01/07Woodbridge Liquidation Trust Declares an Aggregate Cash Distribution on the T..
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2020WOODBRIDGE LIQUIDATION TRUST : Completion of Acquisition or Disposition of Asset..
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2020WOODBRIDGE LIQUIDATION TRUST : Management's Discussion and Analysis of Financial..
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2020WOODBRIDGE LIQUIDATION TRUST : Changes in Registrant's Certifying Accountant, Fi..
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