Victims of the lending scam perpetrated by the Woodbridge Group of Companies are in store for good news. The Group, along with its affiliated debtors, announced in February that it had emerged from Chapter 11 bankruptcy. The announcement was made after the United States Bankruptcy Court for the District of Delaware approved the Group’s liquidation and rehabilitation plan. Woodbridge also announced that it is expecting to make an initial cash distribution for claimants on or before March 31, 2019. While some of the case components are still tied up in state and federal courts, the initial cash distribution plans give affected parties a bit of hope.
All told, the Woodbridge lending scheme affected over 8000 people, many of them elderly investors, and raked in over $1 billion in illicit funds. The Securities and Exchange Commission (SEC) was the first to charge the Group with a lawsuit, forcing Woodbridge into Chapter 11 bankruptcy protection. Several states also followed suit; in Delaware, the state’s bankruptcy court approved rehabilitation plans, which allowed for the timely marketing and sale of certain real properties in order to generate a cash fund for reimbursing victims.
The Woodbridge Liquidation Plan
Following the announcement that initial cash distributions were to take place in the coming months, details of the plan emerged. Under the plan, two different classes of liquidation trust interests will be eligible for distribution. The first is Class A Liquidation Trusts for holders of:
- Allowed Class 3 Standard Note Claims
- Allowed Class 4 General Unsecured Claims
- Allowed Class 5 Unit Claims
The Class B Liquidation Trust Interests will be paid only to holders of the Allowed Class 5 Unit Claims, and only after all claims represented by the interests in the Class A Liquidation Trust have been fully paid off. A certain amount of litigation is sure to follow, but for victims of the Woodbridge scam, the fact that claims will begin to be paid is a sign that the case is nearing resolution.