UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended December 31, 2015
or
¨ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from
to
Commission File No. 001-00043
Motors
Liquidation Company GUC Trust
(Exact name of registrant as specified in its charter)
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Delaware |
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45-6194071 |
(State or other jurisdiction of
incorporation or organization) |
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(IRS Employer
Identification No.) |
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c/o Wilmington Trust Company,
as trust administrator and trustee
Attn: David A. Vanaskey, Jr., Vice President
Rodney Square North 1100
North Market Street Wilmington, Delaware |
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19890-1615 |
(Address of principal executive offices) |
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(Zip Code) |
(302) 636-6019
(Registrants telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes ¨ No x *
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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x (Do not check if a smaller reporting company) |
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Smaller Reporting Company |
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Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ¨ No x
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No x *
* |
The registrant is not required to file reports pursuant to Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934, but has filed all reports required pursuant to the no-action letter of the Securities and
Exchange Commission to the registrant dated May 23, 2012. |
MOTORS LIQUIDATION COMPANY GUC TRUST
FORM 10-Q TABLE OF CONTENTS
Motors Liquidation Company GUC Trust
CONDENSED STATEMENTS OF NET ASSETS IN LIQUIDATION (LIQUIDATION BASIS)
(Dollars in thousands)
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December 31, 2015 |
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March 31, 2015 |
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Unaudited |
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ASSETS |
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Cash and Cash Equivalents (Note 3) |
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$ |
24,444 |
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$ |
37,483 |
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Marketable Securities (Note 3) |
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643,173 |
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30,944 |
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Accrued Dividends on Holdings of New GM Common Stock (Note 3) |
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26,524 |
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Holdings of New GM Securities |
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917,977 |
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Other Assets and Deposits |
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1,890 |
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1,038 |
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TOTAL ASSETS |
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669,507 |
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1,013,966 |
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LIABILITIES |
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Accounts Payable and Other Liabilities |
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4,289 |
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4,832 |
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Liquidating Distributions Payable (Note 4) |
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4,612 |
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7,714 |
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Reserves for Residual Wind-Down Claims (Note 6) |
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19,909 |
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25,406 |
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Reserves for Expected Costs of Liquidation (Note 6) |
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27,593 |
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31,278 |
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TOTAL LIABILITIES |
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56,403 |
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69,230 |
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NET ASSETS IN LIQUIDATION (Note 3) |
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$ |
613,104 |
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$ |
944,736 |
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See Accompanying Notes to Condensed Financial Statements.
1
Motors Liquidation Company GUC Trust
CONDENSED STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION (LIQUIDATION BASIS) (UNAUDITED)
(Dollars in thousands)
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Three Months Ended December 31, |
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Nine Months Ended December 31, |
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2015 |
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2014 |
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2015 |
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2014 |
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Net Assets in Liquidation, beginning of period |
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$ |
613,298 |
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$ |
750,038 |
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$ |
944,736 |
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$ |
1,064,494 |
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Increase (decrease) in net assets in liquidation: |
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Net reductions in (additions to) reserves for Expected Costs of Liquidation (Note 6) |
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2,474 |
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(3,200 |
) |
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(7,824 |
) |
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(7,335 |
) |
Liquidating distributions (Note 4) |
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(2,717 |
) |
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2,090 |
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(127,137 |
) |
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(208,110 |
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Net change in fair value of holdings of New GM Securities |
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83,540 |
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(175,229 |
) |
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(29,371 |
) |
Dividends and interest income (net reversal) (Note 3) |
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6 |
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3,444 |
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(21,485 |
) |
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16,234 |
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Other income |
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43 |
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43 |
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Net (decrease) increase in net assets in liquidation |
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(194 |
) |
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85,874 |
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(331,632 |
) |
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(228,582 |
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Net Assets in Liquidation, end of period |
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$ |
613,104 |
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$ |
835,912 |
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$ |
613,104 |
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$ |
835,912 |
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See Accompanying Notes to Condensed Financial Statements.
2
Motors Liquidation Company GUC Trust
CONDENSED STATEMENTS OF CASH FLOWS (LIQUIDATION BASIS) (UNAUDITED)
(Dollars in thousands)
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Nine Months Ended December 31, |
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2015 |
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2014 |
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Cash flows from (used in) operating activities |
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Cash receipts from dividends and interest |
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$ |
4,386 |
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$ |
12,678 |
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Cash paid for professional fees, governance costs and other administrative costs |
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(11,039 |
) |
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(9,449 |
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Cash paid for Residual Wind-Down Claims |
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(6,022 |
) |
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(2,011 |
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Cash receipts for refunds, including amounts due others |
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204 |
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379 |
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Cash paid for distributions |
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(130,036 |
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(3,528 |
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Net cash flows used in operating activities |
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(142,507 |
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(1,931 |
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Cash flows from (used in) investing activities |
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Cash used to purchase marketable securities |
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(1,316,196 |
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(66,302 |
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Cash from maturities and sales of marketable securities |
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703,962 |
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78,597 |
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Net cash flows (used in) from investing activities |
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(612,234 |
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12,295 |
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Cash flows from financing activities |
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Cash from liquidation of New GM Securities and sale of New GM Securities for distribution |
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741,702 |
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212 |
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Net cash flows from financing activities |
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741,702 |
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212 |
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Net (decrease) increase in cash and cash equivalents |
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(13,039 |
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10,576 |
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Cash and cash equivalents, beginning of period |
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37,483 |
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14,932 |
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Cash and cash equivalents, end of period |
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$ |
24,444 |
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$ |
25,508 |
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The GUC Trust has not presented a reconciliation from net income to cash flow from operations. As an entity in liquidation, the GUC Trust
does not have continuing operations that result in the measurement of net income as that term is used by generally accepted accounting principles to measure results of operations.
See Accompanying Notes to Condensed Financial Statements.
3
Motors Liquidation Company GUC Trust
Notes to Condensed Financial Statements
December 31, 2015
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1. |
Description of Trust and Reporting Policies |
The Motors Liquidation Company GUC Trust (GUC Trust) is a successor to Motors Liquidation Company (formerly known as General
Motors Corp.) (MLC) for the purposes of Section 1145 of the United States Bankruptcy Code (Bankruptcy Code). The GUC Trust holds and directs the distribution of, and pending such distribution administers, certain assets
pursuant to the terms and conditions of the Second Amended and Restated Motors Liquidation Company GUC Trust Agreement (the GUC Trust Agreement), dated as of July 30, 2015, and as amended from time to time, and pursuant to the
Second Amended Joint Chapter 11 Plan (the Plan), dated March 18, 2011, of MLC and its debtor affiliates (collectively, along with MLC, the Debtors), for the benefit of holders of allowed general unsecured claims against
the Debtors (Allowed General Unsecured Claims).
The GUC Trust was formed on March 30, 2011, as a statutory trust under the Delaware
Statutory Trust Act, for the purposes of implementing the Plan and distributing the GUC Trusts distributable assets. Wilmington Trust Company serves as trustee and trust administrator of the GUC Trust (in such capacity, and not in its
individual capacity, the GUC Trust Administrator), and FTI Consulting, Inc. serves as trust monitor of the GUC Trust (in such capacity, and not in its individual capacity, the GUC Trust Monitor). Prior to the liquidation in
July and August 2015 of all New GM Securities (as defined below) then held by the GUC Trust (pursuant to the Liquidation Order (as defined below)), the Plan (as qualified by the Liquidation Order) generally provided for the distribution of certain
shares of common stock (New GM Common Stock) of the new General Motors Company, formerly known as NGMCO, Inc. (New GM) and any associated Dividend Cash (as defined below) and certain warrants for the purchase of shares of
such stock (the New GM Warrants, and, together with the New GM Common Stock, the New GM Securities) to holders of Allowed General Unsecured Claims pro rata by the amount of such claims. Since such liquidation of the New GM
Securities, distributions to holders of Allowed General Unsecured Claims consist entirely of cash distributions in lieu of New GM Securities. In addition, prior to the qualification by the Liquidation Order and the resulting subsequent liquidation
of New GM Securities, the Plan provided that each holder of an Allowed General Unsecured Claim would obtain, in the form of GUC Trust Units (as defined below), a contingent right to receive, on a pro rata basis, additional shares of New GM Common
Stock (and associated Dividend Cash) and New GM Warrants (if and to the extent such New GM Common Stock and New GM Warrants were not required for the satisfaction of previously Disputed General Unsecured Claims (as defined in Note 2), Term Loan
Avoidance Action Claims (as defined in Note 2) or liquidation for the payment of the expenses and liabilities of the GUC Trust), and certain cash, if any, remaining at the dissolution of the GUC Trust. Since the aforementioned liquidation of all New
GM Securities previously held by the GUC Trust, the holders of GUC Trust Units have a contingent right to receive additional cash, in lieu of New GM Securities, if any, remaining at the dissolution of the GUC Trust.
By order dated July 2, 2015 (the Liquidation Order), the Bankruptcy Court approved the conversion of the GUC Trusts holdings of New GM
Securities into cash. To effect such conversion, on July 7, 2015, the GUC Trust converted all of its holdings of New GM Warrants into New GM Common Stock in a cashless exercise. In total, the GUC Trust converted (i) 10,352,556 New GM
Series A Warrants (defined below) into 7,407,155 shares of New GM Common Stock, and (ii) 10,352,556 New GM Series B Warrants (defined below) into 4,953,635 shares of New GM Common Stock. Thereafter, the GUC Trust sold all of its holdings of New
GM Common Stock for net proceeds aggregating $741.7 million, having completed all such sales on August 5, 2015. As a result, all distributions by the GUC Trust thereafter in respect of any Allowed General Unsecured Claims (including in respect
of the GUC Trust Units) will be made solely in cash. Pursuant to the Liquidation Order, the proceeds of such liquidations (net of applicable costs, fees, and expenses paid in respect thereof) were allocated to the beneficiaries of the GUC Trust on a
pro rata basis in the following manner:
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(a) |
A GUC Trust beneficiarys entitlement to a particular number of New GM Warrants that were exercised was converted into an entitlement to receive the number of shares of New GM Common Stock into which such New GM
Warrants were exercised. Such conversions were .71549 shares of New GM Common Stock for each New GM Series A Warrant and .47849 shares of Common Stock for each New GM Series B Warrant; and |
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(b) |
A GUC Trust beneficiarys entitlement to a particular number of shares of New GM Common Stock that were liquidated (including the exercised New GM Warrants as set forth above), was converted into an entitlement to
receive an amount of cash equal to the weighted average sales price (net of any applicable costs, fees, and expenses paid in respect thereof) of all of the New GM Common Stock sold, multiplied by the number of shares of New GM Common Stock to which
such GUC Trust beneficiary would otherwise be entitled (including exercised New GM Warrants as set forth above). Such weighted average sales price for the GUC Trusts holdings of New GM Common Stock that were sold subsequent to June 30,
2015 was $31.23 per share. |
Following the liquidation described above, the GUC Trust has invested most of the proceeds in certain marketable
securities as permitted under the GUC Trust Agreement. The amount of cash and cash equivalents and marketable securities held for distribution to GUC Trust beneficiaries, including Dividend Cash, is referred to herein as Distributable
Cash.
4
The GUC Trust exists solely for the purpose of resolving claims, distributing Distributable Cash (following the
aforementioned liquidation of all New GM Securities) and winding down the affairs of MLC, all in accordance with a plan of liquidation of MLC approved by the Bankruptcy Court and the Liquidation Order. Accordingly, the GUC Trust has prepared the
accompanying financial statements on the liquidation basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Under the liquidation basis of accounting, assets are stated at their
estimated realizable value, which is the non-discounted amount of cash into which an asset is expected to be converted during the liquidation period, while liabilities continue to be recognized at the amount required by other U.S. GAAP, and are not
remeasured to reflect any anticipation that an entity will be legally released from an obligation. Additionally, under the liquidation basis of accounting, a reserve is established for estimated costs expected to be incurred during the liquidation
period. Such costs are accrued when there is a reasonable basis for estimation. Also, an accrual is made for estimated income or cash expected to be received over the liquidation period to the extent that a reasonable basis for estimation exists.
These estimates are periodically reviewed and adjusted as appropriate. The valuation of assets at realizable value, the accrual for investment income on marketable securities expected to be received over the liquidation period, reserves for residual
wind-down claims and reserves for expected liquidation costs represent estimates, are based on present facts and circumstances known to the GUC Trust Administrator, and are subject to change.
As described above, the beneficiaries of the GUC Trust are future holders and, to the extent their liquidating distributions have not yet been paid to them,
current holders of Allowed General Unsecured Claims and future and current holders of GUC Trust Units (Trust Beneficiaries). As Disputed General Unsecured Claims are resolved and allowed and thereby become Allowed General Unsecured
Claims, the holders thereof become entitled to receive liquidating distributions of Distributable Cash (including Dividend Cash) and GUC Trust Units pro rata by the amount of such claims and, upon such occurrence, the GUC Trust incurs an obligation
to distribute such cash. Accordingly, liquidating distributions payable are recorded for the amount of cash that the GUC Trust is obligated to distribute. Prior to the aforementioned liquidation of all New GM Securities previously held by the GUC
Trust, liquidating distributions payable were recorded at the fair value of New GM Securities (including Dividend Cash) as of the end of the period in which the Disputed General Unsecured Claims were resolved as Allowed General Unsecured Claims.
Similarly, unless the Proposed Settlement (as defined and described in Note 2) is reached and is approved by the Bankruptcy Court, to the extent potential Term Loan Avoidance Action Claims were to arise (and would become allowed) in the manner
described in Note 2, liquidating distributions payable would be recorded for the Distributable Cash and the related Dividend Cash that would become distributable to holders of Term Loan Avoidance Action Claims upon such occurrence. Prior to the
resolution and allowance of Disputed General Unsecured Claims (or potential Term Loan Avoidance Action Claims), liabilities are not recorded for the conditional obligations associated with Disputed General Unsecured Claims or potential Term Loan
Avoidance Action Claims. Rather, the beneficial interests of Trust Beneficiaries in the residual assets of the GUC Trust are reflected in Net Assets in Liquidation of the GUC Trust in the accompanying financial statements.
The accompanying (a) condensed statement of net assets in liquidation at March 31, 2015, which has been derived from audited financial statements,
and (b) the unaudited interim condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes required by U.S. GAAP for complete financial
statements. The GUC Trust believes all adjustments, normal and recurring in nature, considered necessary for a fair presentation have been included. The changes in net assets in liquidation for the nine months ended December 31, 2015 are not
necessarily indicative of the changes in net assets that may be expected for the full year. The GUC Trust believes that, although the disclosures contained herein are adequate to prevent the information presented from being misleading, the
accompanying interim condensed financial statements should be read in conjunction with the GUC Trusts financial statements for the year ended March 31, 2015 included in Form 10-K filed by the GUC Trust with the Securities and Exchange
Commission on May 22, 2015.
The preparation of condensed financial statements in conformity with U.S. GAAP requires the GUC Trust Administrator to
make estimates and assumptions that affect the reported amounts of assets and liabilities and are subject to change.
Changes to U.S. GAAP are made by the
FASB in the form of accounting standards updates (ASUs) to the FASBs Accounting Standards Codification. The GUC Trust considers the applicability and impact of all ASUs. ASUs not noted herein were assessed and determined to
be not applicable.
On March 31, 2011, the date the Plan became effective (the Effective Date), there were approximately $29,771 million in
Allowed General Unsecured Claims. In addition, as of the Effective Date, there were approximately $8,154 million in disputed general unsecured claims which reflects liquidated disputed claims and a Bankruptcy Court ordered distribution reserve for
unliquidated disputed claims (Disputed General Unsecured Claims), but does not reflect potential Term Loan Avoidance Action Claims. The total aggregate amount of general unsecured claims, both allowed and disputed, asserted against the
Debtors, inclusive of the potential Term Loan Avoidance Action Claims, was approximately $39,425 million as of the Effective Date.
5
Pursuant to the GUC Trust Agreement, holders of Disputed General Unsecured Claims become entitled to receive a
distribution of Distributable Cash from the GUC Trust if, and to the extent that, such Disputed General Unsecured Claims become Allowed General Unsecured Claims. Under the GUC Trust Agreement, the GUC Trust Administrator has the authority to file
objections to such Disputed General Unsecured Claims and such claims may be prosecuted through alternative dispute resolution proceedings, including mediation and arbitration (ADR Proceedings), if appropriate. As of December 31,
2015, there was one remaining Disputed General Unsecured Claim of approximately $20.0 million, which was subject to pending objections filed by the GUC Trust. In addition, as of December 31, 2015, the GUC Trust held as reserves for Disputed
General Unsecured Claims approximately $50.0 million in claim amount that is not associated with any particular claim but which has been set aside by the GUC Trust Administrator as a general claim contingency. See Allowed and Disputed
Claims below.
To the extent that all or a portion of a Disputed General Unsecured Claim is deemed invalidor disallowedby
order of the Bankruptcy Court, by order of the tribunal presiding over the ADR Proceeding (if applicable), or by settlement with the GUC Trust, such portion of the Disputed General Unsecured Claim that is disallowed is not entitled to a distribution
from the GUC Trust (subject to any appeal rights of the claimant). However, to the extent that a Disputed General Unsecured Claim is fully resolved, and such resolution results in all or a portion of the original Disputed General Unsecured Claim
being deemed validor allowedby order of the Bankruptcy Court, by order of the tribunal presiding over the ADR Proceeding (if applicable), or by settlement with the GUC Trust, such portion of the Disputed General Unsecured
Claim that is allowed will be (subject to any appeal rights of the GUC Trust) considered an Allowed General Unsecured Claim on the Effective Date (such claims, Resolved Disputed Claims).
Only one avoidance action, captioned Official Committee of Unsecured Creditors of Motors Liquidation Co. v. JPMorgan Chase Bank, N.A. et al., Adv. Pro.
No. 09-00504 (Bankr. S.D.N.Y. July 31, 2009) (the Term Loan Avoidance Action), was commenced prior to the statutory deadline for commencing such actions. The Term Loan Avoidance Action was commenced by the Official Committee of
Unsecured Creditors of Motors Liquidation Company (the Committee), and seeks the return of approximately $1.5 billion that had been transferred by the Debtors (with funds advanced after the commencement of the Debtors chapter 11
cases by the United States Treasury and Export Development Canada (together, the DIP Lenders)) to a consortium of prepetition lenders pursuant to the terms of the order of the Bankruptcy Court. On December 15, 2011, in accordance
with the Plan, upon the dissolution of MLC, the Term Loan Avoidance Action was transferred to the Avoidance Action Trust (as defined below). Pursuant to the GUC Trust Agreement, to the extent that Wilmington Trust Company, not in its individual
capacity but solely in its capacity as the trustee and trust administrator of the Avoidance Action Trust (the Avoidance Action Trust Administrator), is successful in obtaining a recovery by way of judgment or settlement from the
defendant(s) to the Term Loan Avoidance Action, such defendant(s) shall receive an Allowed General Unsecured Claim against the GUC Trust in the amount so disgorged to the Avoidance Action Trust (such general unsecured claims Term Loan
Avoidance Action Claims, and together with Resolved Disputed Claims, the Resolved Allowed Claims).
The GUC Trust has reached an
agreement in principle (the Proposed Agreement) with the Avoidance Action Trust regarding the treatment of the potential Term Loan Avoidance Action Claims, which Proposed Agreement (to the extent it becomes effective) would have the
effect of limiting the potential liability of the GUC Trust associated with the Term Loan Avoidance Action Claims to $75 million (exclusive of approximately $55,000 of Term Loan Avoidance Action Claims that were allowed in the quarter ended
December 31, 2015 as described in Note 3). The terms of the Proposed Agreement, all of which are subject to the caveats set forth below, are as follows:
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The GUC Trust shall pay $75 million in cash to the Avoidance Action Trust; |
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The GUC Trust shall be relieved of its obligations to satisfy any Term Loan Avoidance Action Claims (exclusive of approximately $55,000 of Term Loan Avoidance Action Claims that were allowed in the quarter ended
December 31, 2015 as described in Note 3); and |
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The Avoidance Action Trust shall take on the GUC Trusts former obligation to satisfy Term Loan Avoidance Action Claims via a set-off from any amount disgorged by a defendant to the Term Loan Avoidance Action
(whether pursuant to a judgment or settlement). |
The Proposed Agreement has been approved by the trust monitors of the GUC Trust and the
Avoidance Action Trust, but is subject to, and will not be binding until, the execution of definitive documentation acceptable to the parties thereto and other conditions precedent, including the approval of the Bankruptcy Court. As of the date of
this Form 10-Q, the GUC Trust and the Avoidance Action Trust continue to work towards definitive documentation and resolution of certain conditions precedent with respect to the Proposed Agreement. Whether the Proposed Agreement will, at any point,
become a binding agreement on the terms set forth above, or at all, is uncertain and subject to numerous risks. Accordingly, holders of GUC Trust Units should carefully consider such uncertainty before making any decisions with respect to such
units.
It is still unclear whether any amounts actually transferred to the Avoidance Action Trust pursuant to the Term Loan Avoidance Action would be for
the benefit of holders of Allowed General Unsecured Claims. The Committee has taken the position that, except for the reimbursement of certain costs and expenses of the Avoidance Action Trust, (a) the DIP Lenders are not entitled to any
proceeds of the Term Loan Avoidance Action and have no interests in the trust established for the action under the Plan (the Avoidance Action Trust) and (b) the holders of Allowed General Unsecured Claims have the exclusive right to
receive any and all proceeds of the Term Loan Avoidance Action, and are the exclusive beneficiaries of the Avoidance Action Trust with respect thereto.
6
As described in Part II, Item 1, Legal Proceedings, litigation with respect to these issues is
ongoing, and the rights to any recoveries on the Term Loan Avoidance Action are still disputed. Pursuant to the Plan, however, no funds reclaimed from the pre-petition lenders will be transferred to or otherwise benefit the GUC Trust or be
distributed to holders of GUC Trust Units.
GUC Trust Distributable Assets
Pursuant to the terms of the Plan, the Bankruptcy Court authorized the distribution by New GM of 150 million shares of New GM Common Stock, warrants to
acquire 136,363,635 newly issued shares of New GM Stock with an exercise price set at $10.00 per share, expiring July 10, 2016 (New GM Series A Warrants), and warrants to acquire 136,363,635 newly issued shares of New GM Stock with
an exercise price set at $18.33 per share, expiring July 10, 2019 (New GM Series B Warrants). Record ownership of the New GM Securities was held by MLC for the benefit of the GUC Trust until the dissolution of MLC on
December 15, 2011, at which time record ownership was transferred to the GUC Trust.
As described above, pursuant to the Liquidation Order, during
July and August 2015, all of the GUC Trusts holdings of New GM Securities were liquidated and, following such liquidation, the GUC Trusts Distributable Assets principally consist of Distributable Cash. Such Distributable Cash is
primarily invested in certain marketable securities as permitted under the GUC Trust Agreement and the balance is held in cash and cash equivalents.
Prior to the liquidation of all its holdings of New GM Common Stock, the GUC Trust received dividends on such New GM Common Stock aggregating $24.7 million.
Such dividends are required to be applied to the same purpose as the New GM Common Stock to which such dividends relate. If the portion of Distributable Cash applicable to the proceeds from the liquidation of New GM Common Stock is distributed to
holders of subsequently allowed Disputed General Unsecured Claims and GUC Trust Units, then the dividends relating to such Distributable Cash will also be distributed to such holders. If, however, Distributable Cash is appropriated in accordance
with the GUC Trust Agreement to fund the costs and liabilities of the GUC Trust, then, in that case, the dividends relating to such Distributable Cash will be applied to such costs and liabilities of the GUC Trust and (just like the appropriated
Distributable Cash) will be maintained as Other Administrative Cash (as defined below). Because such dividends are applied to the same purposes as the associated Distributable Cash, any references in this Form 10-Q to Distributable Cash should be
understood to include the dividends relating to such Distributable Cash, unless expressly indicated otherwise. The amount of cash and cash equivalents and marketable securities held by the GUC Trust that relates to dividends received by the GUC
Trust on New GM Common Stock previously held by the GUC Trust is referred to as Dividend Cash and is included in the amount of cash and cash equivalents and marketable securities held for distribution to GUC Trust beneficiaries that is referred to
herein as Distributable Cash (except to the extent of dividends relating to appropriated Distributable Cash that is classified as Other Administrative Cash following such appropriation).
Funding for GUC Trust Costs of Liquidation
The
GUC Trust has incurred and will continue to incur certain costs to liquidate the trust assets and implement the Plan. On or about the Effective Date, pursuant to the Plan, MLC contributed approximately $52.7 million to the GUC Trust to be held and
maintained by the GUC Trust Administrator (the Administrative Fund) for the purpose of paying certain fees and expenses (including certain tax obligations) incurred by the GUC Trust (including fees of the GUC Trust Administrator and the
GUC Trust Monitor and the fees and expenses for professionals retained by the GUC Trust), other than the Reporting Costs, as defined below (Wind-Down Costs). As of December 31, 2015, the remaining Administrative Fund aggregated $8.2
million (consisting of cash and cash equivalents and marketable securities). As of December 31, 2015, $8.0 million of the remaining Administrative Fund has been designated for the satisfaction of certain specifically identified costs and
liabilities of the GUC Trust (a substantial majority of which will likely not be incurred and, therefore, will likely be returned to the DIP Lenders), and such amount may not be used for the payment of Trust Professionals fees and expenses or other
Wind-Down Costs. Cash or investments from the Administrative Fund, if any, which remain at the winding up and conclusion of the GUC Trust must be returned to the DIP Lenders.
The GUC Trust Agreement authorized the GUC Trust to liquidate approximately $5.7 million of New GM Securities (the Initial Reporting Cash) shortly
after the Effective Date for the purposes of funding certain fees and expenses of the GUC Trust (the Reporting Costs), including those directly or indirectly relating to (i) reports to be prepared and filed by the GUC Trust pursuant
to applicable rules, regulations and interpretations of the Securities and Exchange Commission, (ii) the transfer, registration for transfer and certification of GUC Trust Units, (iii) the application by the Committee to the Internal
Revenue Service for a private letter ruling regarding the tax treatment of the GUC Trust and the holders of Allowed General Unsecured Claims in respect to the distribution of New GM Securities, and (iv) certain legal proceedings relating to the
Term Loan Avoidance Action. The GUC Trust Agreement provides that the Administrative Fund may not be utilized to satisfy any Reporting Costs.
The GUC
Trust Agreement provides that, if the GUC Trust Administrator determines that the Administrative Fund is not sufficient to satisfy the current or projected Wind-Down Costs or the Initial Reporting Cash is not sufficient to satisfy the current or
projected Reporting Costs, the GUC Trust Administrator, with the approval of the GUC Trust Monitor, is authorized to set aside Distributable
7
Cash from distribution for these purposes. The GUC Trust Administrator may then appropriate such Distributable Cash to fund the Wind-Down Costs and/or Reporting Costs with the required approval
of the Bankruptcy Court. Distributable Cash that is set aside and/or appropriated in this manner will not be available for distribution to the beneficiaries of GUC Trust Units, and any appropriation of Distributable Cash (including related Dividend
Cash) will be classified as Other Administrative Cash under the GUC Trust Agreement. The setting aside (or appropriation) of Distributable Cash, including Dividend Cash, itself is not, and has not been, reflected in the Statement of Net
Assets in Liquidation or any of the other financial statements of the GUC Trust. Separate from this process of setting aside (or appropriating) Distributable Cash to satisfy unfunded projected costs and expenses of the GUC Trust, as a matter of
financial reporting, the GUC Trust records a reserve in its Statement of Net Assets in Liquidation (the source of funding of which is not addressed therein) for all expected costs of liquidation for which there is a reasonable basis for estimation.
For this reason, among others, there is not a direct relationship between the amount of such reserve reflected in the Statement of Net Assets in Liquidation and the amount of any Distributable Cash that is set aside (or appropriated) for current or
projected costs and expenses of the GUC Trust. Adjustments to the Reserve for Expected Costs of Liquidation as reported in the Statement of Net Assets in Liquidation are recorded only when there is a reasonable basis for estimation of the expected
incurrence of additional costs or a reduction in expected costs. For more information regarding the Reserves for Expected Costs of Liquidation reflected in the accompanying Condensed Statement of Net Assets in Liquidation, see Note 6.
Prior to the aforementioned liquidation of all New GM Securities in July and August 2015, the GUC Trust was authorized, with the approval of the GUC Trust
Monitor, to set aside from distribution New GM Securities for the funding purposes described above and to sell such set aside New GM Securities with the approval of the Bankruptcy Court. The Bankruptcy Court previously approved in March and December
2012, and again in January 2015, the sale of New GM Securities to fund the then current and projected costs and expenses of the GUC Trust. The March 2012 Bankruptcy Court order also authorized the sale of further New GM Securities aggregating $13.7
million for the purpose of funding certain fees, costs and expenses of the Avoidance Action Trust and the transfer of the sale proceeds to the Avoidance Action Trust (such sale proceeds were so transferred in May 2012). Prior to the aforementioned
liquidation of all New GM Securities, sales of New GM Securities to fund projected Reporting Costs and Wind-Down Costs through calendar year 2015 aggregated approximately $61.7 million, including Dividend Cash of $0.2 million and the Initial
Reporting Cash (which amounts comprised part of the GUC Trusts Other Administrative Cash). Such securities sold aggregated 1,043,801 shares of New GM Common Stock, 948,887 New GM Series A Warrants and 948,887 New GM Series B Warrants. In
December 2015, the Bankruptcy Court approved the appropriation of Distributable Cash aggregating approximately $12 million to fund the projected costs and expenses of the GUC Trust for calendar year 2016. Such appropriation reduced Distributable
Cash and increased Other Administrative Cash. As of December 31, 2015, Other Administrative Cash aggregated $15.8 million. To the extent that any of the Other Administrative Cash is not ultimately required and is held by the GUC Trust at the
time of its dissolution, such remaining Other Administrative Cash will be distributed by the GUC Trust to holders of the GUC Trust Units.
As of
December 31, 2015, Distributable Cash of $46.6 million was set aside for projected GUC Trust fees, costs and expenses to be incurred beyond 2016, including $2.3 million set aside for potential income taxes on dividends received on holdings of
New GM Common Stock and Investment Income as described below in Funding for Potential Tax Liabilities on Dispositions of New GM Securities, Dividends on New GM Common Stock and Investment Income. Accordingly, such Distributable Cash is
not available for distribution to the beneficiaries of the GUC Trust Units. Set aside and/or appropriated Distributable Cash is reflected in cash and cash equivalents and marketable securities in the Statement of Net Assets in Liquidation until
expended.
Funding for Potential Tax Liabilities on Dispositions of New GM Securities, Dividends on New GM Common Stock and Investment Income
The GUC Trust is subject to U.S. federal income tax on realized net gains from the distribution and sale of New GM Securities (such taxes,
Taxes on Distribution). The GUC Trust is also subject to U.S. federal income tax on dividends received on New GM Common Stock held by the GUC Trust (such taxes, Dividend Taxes) and on investment income earned on Distributable
Cash (such taxes, Investment Income Taxes). The GUC Trust Agreement provides that the Administrative Fund may not be utilized to satisfy any Taxes on Distribution, Dividend Taxes or Investment Income Taxes. As such, the GUC Trust
Administrator is authorized, with the approval of the GUC Trust Monitor, to set aside from distribution Distributable Cash in amounts that would be sufficient to satisfy any potential Taxes on Distribution, Dividend Taxes or Investment Income Taxes.
Distributable Cash that is set aside for Dividend Taxes and Investment Income Taxes is included in the set-aside for Wind-Down Costs described above in Funding for GUC Trust Costs of Liquidation. The GUC Trust Administrator may
appropriate such set aside Distributable Cash to fund the Taxes on Distribution, Dividend Taxes or Investment Income Taxes with the approval of the GUC Trust Monitor and, with respect to Dividend Taxes and Investment Income Taxes only, with the
approval of the Bankruptcy Court. Distributable Cash that is appropriated in this manner will not be available for distribution to the beneficiaries of GUC Trust Units, and the appropriation of Distributable Cash (including Dividend Cash) will be
classified as Other Administrative Cash under the GUC Trust Agreement. Set aside and/or appropriated Distributable Cash is reflected in cash and cash equivalents and marketable securities until expended to pay Taxes on Distribution,
Dividend Taxes or Investment Income Taxes. While the set-aside or appropriated Distributable Cash (including Dividend Cash) is not available for distribution, there is no corresponding liability or reserve related to such set-aside assets reflected
in the Statement of Net Assets in Liquidation or any of the other financial statements of the GUC Trust.
8
Prior to the liquidation of all New GM Securities in July and August 2015 described above, the GUC Trust was
authorized, with the approval of the GUC Trust Monitor, to set aside from distribution New GM Securities to fund potential Taxes on Distribution, Dividend Taxes and Investment Income Taxes and to sell such set aside New GM Securities to fund the
Taxes on Distribution, Dividend Taxes or Investment Income Taxes with the approval of the GUC Trust Monitor and, with respect to Dividend Taxes and Investment Income Taxes only, with the approval of the Bankruptcy Court. Such set aside New GM
Securities were included in Holdings of New GM Securities in the Statement of Net Assets in Liquidation.
During the quarter ended December 31, 2015,
the GUC Trust Administrator reviewed the current and potential Taxes on Distribution. As a result of such review, the GUC Trust Administrator determined that Distributable Cash of $109.7 million should be set aside for potential Taxes on
Distribution for realized gains that are still subject to examination by the Internal Revenue Service and that are based on the tax basis of the New GM Securities on December 15, 2011, the date of transfer of record ownership of the New GM
Securities from MLC to the GUC Trust. The GUC Trust Administrator intends to continue to reevaluate the amount of Distributable Cash set aside on a quarterly basis.
As previously disclosed, during the quarter ended September 30, 2013, the GUC Trust made a determination to file its U.S. federal income tax returns
taking the position that beneficial ownership for a substantial majority of New GM Securities was transferred from MLC to the GUC Trust on March 31, 2011, and that the tax basis of such New GM Securities should be determined with reference to
the value of such securities on such date, instead of December 15, 2011, when record ownership of the remaining New GM Securities still held by MLC was transferred from MLC to the GUC Trust. For the remaining substantial minority of New GM
Securities transferred from MLC to the GUC Trust, the GUC Trust determined that the transfer of beneficial ownership occurred on other dates for which the tax basis should be determined by reference to the value of such securities on such dates.
This new tax position resulted in an increased tax basis of the New GM Securities from the prior tax position and, therefore, reduced taxable gains and increased taxable losses on distributions and sales of New GM Securities since March 31,
2011. The new tax position has not been sustained on examination by the Internal Revenue Service as of the date hereof. However, the GUC Trust believes, based on the available evidence and consultation with GUC Trust professionals, that it is more
likely than not that the new tax position will be sustained on examination by the Internal Revenue Service based on the technical merits of the position. Accordingly, this new tax position has been recognized in any current and deferred income tax
liabilities and income tax provision in the GUC Trusts financial statements since the quarter ended September 30, 2013.
Following the GUC
Trusts determination to utilize the new tax position set forth above, the GUC Trust filed its U.S. federal income tax returns for the years ended March 31, 2015, 2014 and 2013 with the Internal Revenue Service using such new tax position.
Such tax returns were accompanied by requests for prompt determination of tax liability pursuant to Section 505(b) of the Bankruptcy Code, and the statutory notification periods set forth in Section 505(b) of the Bankruptcy Code with
respect to the GUC Trusts U.S. federal income tax returns for the year ended March 31, 2015 and prior years have expired. Accordingly, the tax liabilities set forth in the GUC Trusts U.S. federal income tax returns for the year
ended March 31, 2015 and prior years are no longer subject to examination by the Internal Revenue Service. However, remaining capital loss carryovers that were generated in those years, combined with capital gains and losses generated in the
nine months ended December 31, 2015, from the new tax position, which aggregate $182.4 million, along with net operating loss carryovers generated through December 31, 2015 aggregating $97.3 million, could be subject to examination by the
Internal Revenue Service in subsequent years when those losses, if any, are utilized.
In contrast to the GUC Trusts financial statements, as a
conservative measure, the calculation of the set aside Distributable Cash for potential Taxes on Distribution utilizes the prior tax position rather than the new tax position to the extent that the GUC Trusts liability for Taxes on
Distribution has not been finally determined in accordance with Section 505(b) of the Bankruptcy Code or the new tax position has not been sustained on examination by the Internal Revenue Service. Accordingly, the potential tax liability for
the GUC Trusts U.S. federal income tax returns for the year ending March 31, 2016 and subsequent years is calculated, for purposes of the set aside of Distributable Cash for potential Taxes on Distribution, using the prior tax
position rather than the new tax position. In addition, the set aside calculation does not recognize any reductions related to remaining net operating loss carryovers or capital loss carryovers for losses on distributions or sales of New
GM Securities that are attributable to the March 31, 2015 tax year or prior tax years, until such carryovers are utilized and such utilization is finally determined in accordance with Section 505(b) of the Bankruptcy Code or the new tax
position has been sustained on examination by the Internal Revenue Service.
For additional information regarding set aside Distributable Cash, see
Net Assets in LiquidationDistributable Cash Set Aside from Distribution in Item 2 (Managements Discussion and Analysis of Financial Condition and Results of Operations) below.
Residual Wind-Down Claims and Costs
Upon the
dissolution of the Debtors, which occurred on December 15, 2011, the GUC Trust became responsible for resolving and satisfying (to the extent allowed) all remaining disputed administrative expenses, priority tax claims, priority non-tax claims
and secured claims (the Residual Wind-Down Claims). On December 15, 2011, under the Plan, the Debtors transferred to the GUC Trust an amount of assets necessary (the Residual Wind-Down Assets) to satisfy the ultimate
allowed amount of such Residual
9
Wind-Down Claims (including certain reasonable litigation defense costs related to the Term Loan Avoidance Action (the Avoidance Action Defense Costs)), as estimated by the Debtors,
and the costs, fees and expenses relating to satisfying and resolving the Residual Wind-Down Claims (the Residual Wind-Down Costs). The Residual Wind-Down Assets initially aggregated approximately $42.8 million (which amount consisted of
approximately $40.0 million in cash, including approximately $1.4 million designated for the payment of Avoidance Action Defense Costs, and the transferred benefit of approximately $2.8 million in prepaid expenses). Should the Residual Wind-Down
Claims and the Residual Wind-Down Costs be less than the Residual Wind-Down Assets, any excess funds will be returned to the DIP Lenders. If, at any time, the GUC Trust Administrator determines that the Residual Wind-Down Assets are not adequate to
satisfy the Residual Wind-Down Claims (including the actual amount of Avoidance Action Defense Costs) and Residual Wind-Down Costs, such costs will be satisfied by Other Administrative Cash. If there is no remaining Other Administrative Cash, the
GUC Trust Administrator is authorized to, with GUC Trust Monitor approval, set aside and, with Bankruptcy Court approval, appropriate Distributable Cash to cover the shortfall. To the extent that Distributable Cash is set aside and/or appropriated
to obtain funding to complete the wind-down of the Debtors, such Distributable Cash will not be available for distribution to the beneficiaries of the GUC Trust. Therefore, the amount of Residual Wind-Down Claims and Residual Wind-Down Costs could
reduce the assets of the GUC Trust available for distribution. The setting aside or appropriation of Distributable Cash (including Dividend Cash) itself is not reflected in the Statement of Net Assets in Liquidation or any of the other financial
statements of the GUC Trust. Rather, such set aside or appropriated Distributable Cash (including Dividend Cash) is reflected in cash and cash equivalents and marketable securities in the accompanying Condensed Statement of Net Assets in Liquidation
until expended. After the GUC Trust has concluded its affairs, any funds remaining that were obtained from the sale of New GM Securities or appropriation of Distributable Cash to fund the wind-down process or the resolution and satisfaction of the
Residual Wind-Down Claims will be distributed to the holders of the GUC Trust Units.
The amount of Avoidance Action Defense Costs incurred to date
exceeds the corresponding cash of $1.4 million received by the GUC Trust from MLC on the Dissolution Date by approximately $9.5 million. As a result, new Residual Wind-Down Claims have arisen in the amount of such excess. It is expected that
additional Avoidance Action Defense Costs will be incurred for which additional Residual Wind-Down Claims will arise to be paid from the other remaining Residual Wind-Down Assets and, following the depletion of such assets, the Administrative Fund
(to the extent of any excess amounts remaining in the Administrative Fund from the funds designated for the satisfaction of certain specifically identified costs and liabilities of the GUC Trust), Other Administrative Cash or the appropriation of
Distributable Cash. As of December 31, 2015, Residual Wind-Down Assets aggregating $22.3 million were held by the GUC Trust and were recorded in cash and cash equivalents and marketable securities (aggregating approximately $22.2 million) and
other assets and deposits (approximately $0.1 million) in the accompanying Condensed Statement of Net Assets in Liquidation as of December 31, 2015. By comparison, there were approximately $0.5 million in Residual Wind-Down Claims against such
assets as of December 31, 2015, subject to increase for new Residual Wind-Down Claims that are expected to arise for Avoidance Action Defense Costs.
In addition to the Residual Wind-Down Assets, the GUC Trust also received on the Dissolution Date approximately $3.4 million in cash from MLC, which amount
included: (i) $1.4 million in respect of certain costs, fees and expenses payable under the Plan to the indenture trustees and fiscal and paying agents for the previously outstanding debt of MLC (the Indenture Trustee / Fiscal and Paying
Agent Costs), and (ii) $2.0 million in respect of Reporting Costs. The funds received were credited to the reserve for expected costs of liquidation. Any unused portion of the funds designated for the Indenture Trustee / Fiscal and Paying
Agent Costs must be returned to the DIP Lenders and will not be available for distribution to the holders of GUC Trust Units at the winding up and conclusion of the GUC Trust. As of December 31, 2015, funds designated for the Indenture Trustee
/ Fiscal and Paying Agents Costs held by the GUC Trust approximated $0.3 million and are recorded in cash and cash equivalents in the accompanying Condensed Statement of Net Assets in Liquidation.
|
3. |
Net Assets in Liquidation |
Description
Under the GUC Trust
Agreement and the Plan, as described more fully in Note 1, the beneficiaries of the GUC Trust are future and, to the extent their liquidating distributions have not yet been paid to them, current holders of Allowed General Unsecured Claims and
future and current holders of GUC Trust Units. Assets of the GUC Trust consisting primarily of Distributable Cash (including Dividend Cash) as described in Note 1 are available to be distributed to the Trust Beneficiaries (GUC Trust
Distributable Assets) in accordance with the Plan and the GUC Trust Agreement, except to the extent that they are set aside or appropriated for funding the expected costs of liquidation and potential tax liabilities of the GUC Trust. The
amounts of net assets in liquidation presented in the accompanying Condensed Statements of Net Assets in Liquidation at December 31, 2015 and March 31, 2015, correspond to the amounts of GUC Trust Distributable Assets as of
December 31, 2015, after certain adjustments including reductions for the amounts of set aside Distributable Cash and appropriated Distributable Cash. GUC Trust Distributable Assets aggregated approximately $462.7 million at December 31,
2015. For additional information, see Net Assets in LiquidationDistributable Assets in Item 2 (Managements Discussion and Analysis of Financial Condition and Results of Operations) below.
10
Cash and Cash Equivalents and Marketable Securities
As of December 31, 2015, cash and cash equivalents and marketable securities aggregated $667.6 million and are comprised of the following:
|
|
|
|
|
(in thousands) |
|
|
|
Distributable Cash (including associated Dividend Cash) |
|
$ |
620,873 |
|
Residual Wind-Down Assets |
|
|
22,167 |
|
Administrative Fund |
|
|
8,233 |
|
Other Administrative Cash |
|
|
15,790 |
|
Funds for Indenture Trustee/Fiscal Paying Agent Costs |
|
|
319 |
|
Other |
|
|
235 |
|
|
|
|
|
|
Total |
|
$ |
667,617 |
|
|
|
|
|
|
As described in Note 4, as of December 31, 2015, the GUC Trust had accrued liquidating distributions payable aggregating
$4.6 million. Such amount includes $2.7 million of Distributable Cash that was distributable to holders of GUC Trust Units in respect of Excess GUC Trust Distributable Assets as of December 31, 2015. In addition, as of December 31, 2015,
the amount of Distributable Cash reflected in the table above includes $46.6 million of amounts set aside for projected GUC Trust fees, costs and expenses to be incurred beyond 2016 (including $2.3 million for projected Dividend Taxes and Investment
Income Taxes) and Distributable Cash of $109.7 million set aside for potential Taxes on Distribution. The aggregate amount of Distributable Cash which was pending distribution or was set aside and was not available for distribution at
December 31, 2015 was $160.9 million.
Potential Recovery in New GM Shareholder Class Action Proposed Settlement
As described in Part II, Item 1, Legal Proceedings, the GUC Trust intends to file a proof of claim in connection with a proposed settlement of
a class action against New GM. The amount of potential recovery for the GUC Trust, if any, from such proposed settlement is not estimable at this time.
Accrued Dividends on Holdings of New GM Common Stock
As of March 31, 2015, the GUC Trust accrued approximately $22.4 million in estimated dividends expected to be declared by New GM in the future and
received by the GUC Trust on its holdings of New GM Common Stock over its estimated remaining liquidation period. Subsequent thereto, based on a determination that it would be in the best interests of Trust Beneficiaries, the GUC Trust made the
determination to file a motion with the Bankruptcy Court seeking authority to liquidate all or substantially all of the GUC Trusts holdings of New GM Securities. Such motion was approved by the Bankruptcy Court in the Liquidation Order
described above and all of the GUC Trusts holdings of New GM Securities were liquidated in July and August 2015. Accordingly, the GUC Trust no longer expects to receive dividends on New GM Common Stock. Accordingly, the accrued dividends as of
March 31, 2015 (net of dividends received in June 2015) were reversed and no accrual of dividends has been made since March 31, 2015.
Trust Units
As described in Note 1, under the
Plan, each holder of an Allowed General Unsecured Claim retains a contingent right to receive, on a pro rata basis, additional Distributable Cash (if and to the extent not required for the satisfaction of previously Disputed General Unsecured Claims
or potential Term Loan Avoidance Action Claims, or appropriation for the payment of the expenses or tax liabilities of the GUC Trust). The GUC Trust issues units representing such contingent rights (GUC Trust Units) at the rate of one
GUC Trust Unit per $1,000 of Allowed General Unsecured Claims to each holder of an Allowed General Unsecured Claim, subject to rounding pursuant to the GUC Trust Agreement, in connection with the initial recognition of each Allowed General Unsecured
Claim.
As described in Critical Accounting Policies and EstimatesIncome Taxes in Item 2 (Managements Discussion and
Analysis of Financial Condition and Results of Operations) below, the GUC Trust is considered to be a Disputed Ownership Fund pursuant to Treasury Regulation Section 1.468B-9. Pursuant to Treasury Regulation Section 1.468B-9(c)(6),
upon the termination of the GUC Trust, certain capital losses and net operating losses may be distributable to current or previous holders of GUC Trust Units. At this time, the amount of such losses that may be distributed is not determinable, the
timing of such a distribution is dependent on a number of factors affecting the life of the GUC Trust and its termination date, and who is entitled to receive such a distribution is not currently known. The GUC Trust has initiated discussions with
the Internal Revenue Service to get clarification on some of these issues, but, at this time, it is highly uncertain whether or not the Internal Revenue Service will provide the necessary guidance.
11
The GUC Trust makes quarterly liquidating distributions to holders of GUC Trust Units to the extent that (i)(a)
certain previously Disputed General Unsecured Claims asserted against the Debtors estates or potential Term Loan Avoidance Action Claims are either disallowed or are otherwise resolved favorably to the GUC Trust (thereby reducing the amount of
GUC Trust assets reserved for distribution in respect of such asserted or potential claims) or (b) certain Excess GUC Trust Distributable Assets (as defined in the GUC Trust Agreement) that were previously set aside from distribution are
released in the manner permitted under the GUC Trust Agreement, and (ii) as a result of the foregoing, the amount of Excess GUC Trust Distributable Assets (as defined in the GUC Trust Agreement) as of the end of the relevant quarter exceeds
thresholds set forth in the GUC Trust Agreement.
The following table presents the changes during the three months ended December 31, 2015, in the
numbers of GUC Trust Units outstanding or which the GUC Trust was obligated to issue:
|
|
|
|
|
|
|
Trust Units |
|
Outstanding or issuable at September 30, 2015 |
|
|
31,853,702 |
|
Issued during the period |
|
|
|
|
Less: Issuable at beginning of period |
|
|
|
|
Add: Issuable at end of period (1) |
|
|
56 |
|
|
|
|
|
|
Outstanding or issuable at December 31, 2015 (2) |
|
|
31,853,758 |
|
|
|
|
|
|
(1) |
The number of GUC Trust Units issuable at any time represents GUC Trust Units issuable in respect of Allowed General Unsecured Claims that were newly allowed during the fiscal quarter. |
(2) |
The number of GUC Trust Units outstanding at any time represents GUC Trust Units issued in respect of Allowed General Unsecured Claims that were allowed in prior periods, including GUC Trust Units held by the GUC Trust
for the benefit of (a) holders of Allowed General Unsecured Claims who had not yet supplied information required by the GUC Trust in order to effect the initial distribution to which they are entitled and (b) governmental entities that are
precluded by applicable law from receiving distributions of GUC Trust Units. |
Allowed and Disputed Claims
The total cumulative pro rata liquidating distributions ultimately received by Trust Beneficiaries is dependent upon the current amount of Allowed General
Unsecured Claims and final resolution of outstanding Disputed General Unsecured Claims and potential Term Loan Avoidance Action Claims (as described in Note 2). Disputed General Unsecured Claims at December 31, 2015 reflect claim amounts at
their originally filed amounts, a court ordered distribution set aside for certain claims filed without a claim amount and other adjustments as ordered by the court or permitted by the Plan. The Disputed General Unsecured Claims may
settle at amounts that differ significantly from these amounts and at amounts that differ significantly from the historical pattern at which claims have been settled and allowed in proportion to claims resolved and disallowed. As described in Note
1, prior to the resolution and allowance of Disputed General Unsecured Claims (or potential Term Loan Avoidance Action Claims), liabilities are not recorded for the conditional obligations associated with Disputed General Unsecured Claims.
Liquidating distributions payable are recorded in the amount of Distributable Cash (previously the fair value of New GM Securities) to be distributed as of the end of the period in which the Disputed General Unsecured Claims are resolved as Allowed
General Unsecured Claims. Similarly, unless the Proposed Settlement (as described in Note 2) is reached and is approved by the Bankruptcy Court, to the extent potential Term Loan Avoidance Action Claims were to arise (and would become allowed) in
the manner described in Note 2, liquidating distributions payable would be recorded in the amount of Distributable Cash that would become distributable to holders of Term Loan Avoidance Action Claims upon such occurrence.
The following table presents a summary of activity with respect to the Allowed and Disputed General Unsecured Claims and potential Term Loan Avoidance Action
Claims for the three months ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Allowed General Unsecured Claims |
|
|
Disputed General Unsecured Claims |
|
|
Term Loan Avoidance Action Claims |
|
|
Maximum Amount of Unresolved Claims (1) |
|
|
Total Claim Amount (2) |
|
Total, September 30, 2015 |
|
$ |
31,853,630 |
|
|
$ |
70,000 |
|
|
$ |
1,500,000 |
|
|
$ |
1,570,000 |
|
|
$ |
33,423,630 |
|
New Allowed General Unsecured Claims, net |
|
|
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55 |
|
Term Loan Avoidance Action Claims resolved |
|
|
|
|
|
|
|
|
|
|
(55 |
) |
|
|
(55 |
) |
|
|
(55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total, December 31, 2015 |
|
$ |
31,853,685 |
|
|
$ |
70,000 |
|
|
$ |
1,499,945 |
|
|
$ |
1,569,945 |
|
|
$ |
33,423,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Maximum Amount of Unresolved Claims represents the sum of Disputed General Unsecured Claims and Term Loan Avoidance Action Claims. |
(2) |
Total Claim Amount represents the sum of Allowed General Unsecured Claims and Maximum Amount of Unresolved Claims. |
12
During the three months ended December 31, 2015, the Avoidance Action Trust reached settlements with certain
defendants to the Term Loan Avoidance Action resulting in recoveries to the Avoidance Action Trust of approximately $55,000. As a result, corresponding Term Loan Avoidance Action Claims arose and were allowed under the GUC Trust.
|
4. |
Liquidating Distributions |
Liquidating distributions in the three months ended December 31, 2015 consisted of the following:
|
|
|
|
|
(in thousands) |
|
Fair Value |
|
Distributions during the three months ended December 31, 2015 |
|
$ |
129,990 |
|
Less: Liquidating distributions payable at September 30, 2015 |
|
|
(131,885 |
) |
Add: Liquidating distributions payable at December 31, 2015 |
|
|
4,612 |
|
|
|
|
|
|
Total |
|
$ |
2,717 |
|
|
|
|
|
|
Liquidating distributions during the nine months ended December 31, 2015, consisted of the following:
|
|
|
|
|
(in thousands) |
|
Fair Value |
|
Distributions during the nine months ended December 31, 2015 |
|
$ |
130,239 |
|
Less: Liquidating distributions payable at March 31, 2015 |
|
|
(7,714 |
) |
Add: Liquidating distributions payable at December 31, 2015 |
|
|
4,612 |
|
|
|
|
|
|
Total |
|
$ |
127,137 |
|
|
|
|
|
|
The distributions during the three and nine months ended December 31, 2015 consisted of (1) distributions to holders
of GUC Trust Units for excess distributions payable and (2) distributions to holders of Allowed General Unsecured Claims who previously failed to fulfill informational requirements for distribution established in accordance with the GUC Trust
Agreement, but subsequently successfully fulfilled such information requirements.
The GUC Trust was obligated at December 31, 2015 to distribute
Distributable Cash of $4.6 million to the following: (1) holders of GUC Trust Units for excess distributions payable, (2) certain holders of Allowed General Unsecured Claims who had not then satisfied certain informational requirements
necessary to receive these securities and (3) holders of certain Term Loan Avoidance Action Claims as described in Note 3.
|
5. |
Fair Value Measurements |
Accounting standards require certain assets and liabilities be reported at fair value in the financial statements and provide a framework
for establishing that fair value. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value. The GUC Trusts Cash Equivalents, Marketable Securities,
Holdings of New GM Securities (at March 31, 2015) and Liquidating Distributions Payable are presented as provided by this hierarchy.
Level
1In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets and liabilities that the GUC Trust has the ability to access.
Level 2Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include
quoted prices for similar assets or liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity
for the related asset or liability. These Level 3 fair value measurements are based primarily on managements own estimates using pricing models, discounted cash flow methodologies, or similar techniques taking into account the characteristics
of the asset or liability. The GUC Trust had no assets or liabilities that are measured with Level 3 inputs at December 31, 2015 and March 31, 2015.
In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety
are categorized based on the lowest level input that is significant to the valuation. The GUC Trusts assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each
asset or liability.
The GUC Trust also holds other financial instruments not measured at fair value on a recurring basis, including Accounts Payable and
Other Liabilities. The fair value of these liabilities approximates the carrying amounts in the accompanying financial statements due to the short maturity of such instruments.
13
The following table presents information about the GUC Trusts assets and liabilities measured at fair value
on a recurring basis at December 31, 2015 and March 31, 2015, and the valuation techniques used by the GUC Trust to determine those fair values.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
21,136 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
21,136 |
|
Marketable Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury bills |
|
|
|
|
|
|
637,179 |
|
|
|
|
|
|
|
637,179 |
|
U.S. government agency securities |
|
|
|
|
|
|
5,994 |
|
|
|
|
|
|
|
5,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
21,136 |
|
|
$ |
643,173 |
|
|
$ |
|
|
|
$ |
664,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidating distributions payable |
|
$ |
4,612 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
4,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2015 |
|
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
19,150 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
19,150 |
|
Marketable Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal commercial paper and variable demand notes |
|
|
|
|
|
|
12,064 |
|
|
|
|
|
|
|
12,064 |
|
Corporate commercial paper |
|
|
|
|
|
|
18,880 |
|
|
|
|
|
|
|
18,880 |
|
Holdings of New GM Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New GM Common Stock |
|
|
427,151 |
|
|
|
|
|
|
|
|
|
|
|
427,151 |
|
New GM Warrants |
|
|
490,826 |
|
|
|
|
|
|
|
|
|
|
|
490,826 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
937,127 |
|
|
$ |
30,944 |
|
|
$ |
|
|
|
$ |
968,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidating distributions payable |
|
$ |
7,714 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
7,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following are descriptions of the valuation methodologies used for assets and liabilities measured at fair value:
|
|
|
Due to their short-term liquid nature, the fair value of cash equivalents approximates their carrying value. |
|
|
|
Marketable securities at December 31, 2015 consist of U.S. Treasury bills and U.S. government agency securities. Marketable securities at March 31, 2015 consist of municipal commercial paper and variable
demand notes and corporate commercial paper. Due to their short-term maturities, the fair value of U.S. Treasury bills and corporate and municipal commercial paper approximates their carrying value. The fair value of U.S. government agency
securities is based on pricing models, quoted prices of securities with similar characteristics, or broker quotes. Municipal variable demand notes trade daily at par value and, therefore, their fair value is equal to par value. |
|
|
|
Holdings of New GM Securities at March 31, 2015 were valued at closing prices reported on the active market on which the securities are traded. |
|
|
|
Liquidating distributions payable at December 31, 2015 are valued at the amount of cash that the GUC Trust is obligated to distribute. Liquidating distributions payable at March 31, 2015 are valued at closing
prices of New GM Securities reported on the active market on which the securities are traded. |
The GUC Trusts policy is to recognize
transfers between levels of the fair value hierarchy as of the actual date of the event of change in circumstances that caused the transfer. There were no such transfers during the three or nine months ended December 31, 2015 and the year ended
March 31, 2015.
14
|
6. |
Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims |
The following is a summary of the activity in the reserves for expected costs of liquidation for the three and nine months ended
December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2015 |
|
(in thousands) |
|
Reserve for Expected Wind-Down Costs |
|
|
Reserve for Expected Reporting Costs |
|
|
Reserve for Indenture Trustee/Fiscal and Paying Agent Costs |
|
|
Reserve for Residual Wind-Down Costs |
|
|
Total Reserves for Expected Costs of Liquidation |
|
Balance, September 30, 2015 |
|
$ |
22,176 |
|
|
$ |
9,178 |
|
|
$ |
329 |
|
|
$ |
1,219 |
|
|
$ |
32,902 |
|
Less reductions in reserves |
|
|
(1,555 |
) |
|
|
(919 |
) |
|
|
|
|
|
|
|
|
|
|
(2,474 |
) |
Less liquidation costs incurred: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals |
|
|
(1,093 |
) |
|
|
(358 |
) |
|
|
|
|
|
|
(1 |
) |
|
|
(1,452 |
) |
Trust Governance |
|
|
(816 |
) |
|
|
(450 |
) |
|
|
(21 |
) |
|
|
|
|
|
|
(1,287 |
) |
Other Administrative Expenses |
|
|
(13 |
) |
|
|
(83 |
) |
|
|
|
|
|
|
|
|
|
|
(96 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015 |
|
$ |
18,699 |
|
|
$ |
7,368 |
|
|
$ |
308 |
|
|
$ |
1,218 |
|
|
$ |
27,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended December 31, 2015 |
|
(in thousands) |
|
Reserve for Expected Wind-Down Costs |
|
|
Reserve for Expected Reporting Costs |
|
|
Reserve for Indenture Trustee/Fiscal and Paying Agent Costs |
|
|
Reserve for Residual Wind-Down Costs |
|
|
Total Reserves for Expected Costs of Liquidation |
|
Balance, March 31, 2015 |
|
$ |
21,089 |
|
|
$ |
8,602 |
|
|
$ |
364 |
|
|
$ |
1,223 |
|
|
$ |
31,278 |
|
Plus additions to reserves |
|
|
5,640 |
|
|
|
2,184 |
|
|
|
|
|
|
|
|
|
|
|
7,824 |
|
Less liquidation costs incurred: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals |
|
|
(4,474 |
) |
|
|
(1,852 |
) |
|
|
|
|
|
|
(5 |
) |
|
|
(6,331 |
) |
Trust Governance |
|
|
(2,675 |
) |
|
|
(1,350 |
) |
|
|
(56 |
) |
|
|
|
|
|
|
(4,081 |
) |
Other Administrative Expenses |
|
|
(881 |
) |
|
|
(216 |
) |
|
|
|
|
|
|
|
|
|
|
(1,097 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015 |
|
$ |
18,699 |
|
|
$ |
7,368 |
|
|
$ |
308 |
|
|
$ |
1,218 |
|
|
$ |
27,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2014 |
|
(in thousands) |
|
Reserve for Expected Wind-Down Costs |
|
|
Reserve for Expected Reporting Costs |
|
|
Reserve for Indenture Trustee/Fiscal and Paying Agent Costs |
|
|
Reserve for Residual Wind-Down Costs |
|
|
Total Reserves for Expected Costs of Liquidation |
|
Balance, September 30, 2014 |
|
$ |
22,042 |
|
|
$ |
9,663 |
|
|
$ |
408 |
|
|
$ |
1,234 |
|
|
$ |
33,347 |
|
Plus additions to reserves |
|
|
2,952 |
|
|
|
248 |
|
|
|
|
|
|
|
|
|
|
|
3,200 |
|
Less liquidation costs incurred: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals |
|
|
(1,997 |
) |
|
|
(431 |
) |
|
|
|
|
|
|
(4 |
) |
|
|
(2,432 |
) |
Trust Governance |
|
|
(899 |
) |
|
|
(451 |
) |
|
|
(18 |
) |
|
|
|
|
|
|
(1,368 |
) |
Other Administrative Expenses |
|
|
(12 |
) |
|
|
(103 |
) |
|
|
|
|
|
|
|
|
|
|
(115 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014 |
|
$ |
22,086 |
|
|
$ |
8,926 |
|
|
$ |
390 |
|
|
$ |
1,230 |
|
|
$ |
32,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended December 31, 2014 |
|
(in thousands) |
|
Reserve for Expected Wind-Down Costs |
|
|
Reserve for Expected Reporting Costs |
|
|
Reserve for Indenture Trustee/Fiscal and Paying Agent Costs |
|
|
Reserve for Residual Wind-Down Costs |
|
|
Total Reserves for Expected Costs of Liquidation |
|
Balance, March 31, 2014 |
|
$ |
22,529 |
|
|
$ |
12,235 |
|
|
$ |
464 |
|
|
$ |
1,258 |
|
|
$ |
36,486 |
|
Plus additions to (reductions in) reserves |
|
|
7,629 |
|
|
|
(294 |
) |
|
|
|
|
|
|
|
|
|
|
7,335 |
|
Less liquidation costs incurred: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals |
|
|
(5,324 |
) |
|
|
(1,406 |
) |
|
|
|
|
|
|
(28 |
) |
|
|
(6,758 |
) |
Trust Governance |
|
|
(2,728 |
) |
|
|
(1,354 |
) |
|
|
(74 |
) |
|
|
|
|
|
|
(4,156 |
) |
Other Administrative Expenses |
|
|
(20 |
) |
|
|
(255 |
) |
|
|
|
|
|
|
|
|
|
|
(275 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014 |
|
$ |
22,086 |
|
|
$ |
8,926 |
|
|
$ |
390 |
|
|
$ |
1,230 |
|
|
$ |
32,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the three months ended December 31, 2015, estimates of expected Wind-Down Costs and estimates of expected
Reporting Costs (for which there is a reasonable basis for estimation) decreased by $1.6 million and $0.9 million, respectively. During the nine months ended December 31, 2015, estimates of expected Wind-Down Costs and estimates of expected
Reporting Costs (for which there is a reasonable basis for estimation) increased by $5.6 million and $2.2 million, respectively. During the three months ended December 31, 2014, estimates of expected Wind-Down Costs and estimates of expected
Reporting Costs (for which there was a reasonable basis for estimation) increased by $3.0 million and $0.2 million, respectively. During the nine months ended December 31, 2014, estimates of expected Wind-Down Costs and estimates of expected
Reporting Costs (for which there was a reasonable basis for estimation) increased by $7.6 million and decreased by $0.3 million, respectively. Such revisions in the estimates were recorded as additions to (reductions in) the reserves for expected
costs of liquidation in such periods. The GUC Trust has recorded reserves for expected costs of liquidation that represent amounts expected to be incurred over the estimated remaining liquidation period of the GUC Trust for which there was a
reasonable basis for estimation as of December 31, 2015.
The amount of liquidation costs that will ultimately be incurred depends both on the time
period and on the extent of activities required for the GUC Trust to complete its functions and responsibilities under the Plan and the GUC Trust Agreement. Significant uncertainty remains both as to that time period and as to the extent of those
activities. As of December 31, 2015, the recorded reserves for expected costs of liquidation reflect estimated costs for a remaining liquidation period extending through October 2017, which has been estimated predominately on a
probability-weighted basis as permitted under U.S. GAAP and which the GUC Trust believes is the most appropriate measurement basis under the circumstances. Where an outcome is estimated to be likely, the likely outcome has been used as the best
estimate and no weight has been given to the unlikely outcome. The remaining liquidation period is dependent predominantly on the estimate of the remaining period of time for resolution of the Term Loan Avoidance Action, as well as certain
additional estimated time as necessary to wind down the GUC Trust. It is possible that future developments in the Term Loan Avoidance Action could extend the current estimate of such remaining period of time for resolution and, therefore, extend the
estimated remaining liquidation period of the GUC Trust beyond October 2017. It is also possible that future developments associated with the Proposed Agreement described in Note 2 could result in a reduction in the estimate of the remaining
liquidation period. In addition, certain liquidation costs that are expected to be prepaid by the GUC Trust upon its dissolution have also been estimated and accrued. It is reasonably possible that the GUC Trusts estimates regarding the costs
and remaining liquidation period could change in the near term.
As described in Part II, Item 1, Legal Proceedings, the GUC Trust is
participating, as an interested party, in litigation involving certain General Motors vehicle recalls. While unlikely at this time, it is possible that such litigation could extend the remaining liquidation period of the GUC Trust beyond October
2017.
The following is a summary of the activity in the reserves for Residual Wind-Down Claims for the three months ended December 31, 2015 and
2014:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2015 |
|
|
2014 |
|
Balance, beginning of period |
|
$ |
21,491 |
|
|
$ |
27,419 |
|
Less claims allowed during the period |
|
|
(1,582 |
) |
|
|
(988 |
) |
|
|
|
|
|
|
|
|
|
Balance, end of period |
|
$ |
19,909 |
|
|
$ |
26,431 |
|
|
|
|
|
|
|
|
|
|
16
The following is a summary of the activity in the reserves for Residual Wind-Down Claims for the nine months
ended December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2015 |
|
|
2014 |
|
Balance, beginning of period |
|
$ |
25,406 |
|
|
$ |
28,698 |
|
Less claims allowed during the period |
|
|
(5,497 |
) |
|
|
(2,267 |
) |
|
|
|
|
|
|
|
|
|
Balance, end of period |
|
$ |
19,909 |
|
|
$ |
26,431 |
|
|
|
|
|
|
|
|
|
|
There was no current tax benefit or provision for the three and nine months ended December 31, 2015 and 2014 due to cumulative net
operating and capital losses, and no income taxes have been paid by the GUC Trust. There also was no deferred tax benefit or provision in such periods as a result of the establishment of a full valuation allowance against net deferred tax assets at
the beginning and end of such periods.
Deferred taxes in the accompanying Condensed Statement of Net Assets in Liquidation at December 31, 2015 are
comprised of the following components:
|
|
|
|
|
Deferred tax assets: |
|
|
|
|
Reserves for expected costs of liquidation |
|
$ |
8,806 |
|
Net operating and capital loss carryovers |
|
|
110,797 |
|
|
|
|
|
|
Gross deferred tax assets |
|
|
119,603 |
|
Less: Valuation allowance |
|
|
(119,135 |
) |
|
|
|
|
|
Deferred tax asset, net of valuation allowance |
|
|
468 |
|
Deferred tax liabilities: |
|
|
|
|
Accrued investment income |
|
|
(468 |
) |
|
|
|
|
|
Gross deferred tax liabilities |
|
|
(468 |
) |
|
|
|
|
|
Net deferred taxes |
|
$ |
|
|
|
|
|
|
|
As previously disclosed, during the quarter ended September 30, 2013, the GUC Trust made a determination to file its U.S.
federal income tax returns taking the position that beneficial ownership for a substantial majority of New GM Securities was transferred from MLC to the GUC Trust on March 31, 2011, and that the tax basis of such New GM Securities should be
determined with reference to the value of such securities on such date, instead of December 15, 2011, when record ownership of the remaining New GM Securities still held by MLC was transferred from MLC to the GUC Trust. For the remaining
substantial minority of New GM Securities transferred from MLC to the GUC Trust, the GUC Trust determined that the transfer of beneficial ownership occurred on other dates for which the tax basis should be determined by reference to the value of
such securities on such dates. This new tax position resulted in an increased tax basis of the New GM Securities from the prior tax position and, therefore, reduced taxable gains and increased taxable losses on distributions and sales of New GM
Securities since March 31, 2011. The new tax position has not been sustained on examination by the Internal Revenue Service as of the date hereof. However, the GUC Trust believes, based on the available evidence and consultation with GUC Trust
professionals, that it is more likely than not that the new tax position will be sustained on examination by the Internal Revenue Service based on the technical merits of the position. Accordingly, this new tax position has been recognized in any
current and deferred income tax liabilities and income tax provision in the GUC Trusts financial statements since the quarter ended September 30, 2013.
Following the GUC Trusts determination to utilize the new tax position set forth above, the GUC Trust filed its U.S. federal income tax returns for the
years ended March 31, 2015, 2014 and 2013 with the Internal Revenue Service using such new tax position. Such tax returns were accompanied by requests for prompt determination of tax liability pursuant to Section 505(b) of the Bankruptcy
Code, and the statutory notification period set forth in Section 505(b) of the Bankruptcy Code with respect to the GUC Trusts U.S. federal income tax returns for the year ended March 31, 2015 and prior years has expired. Accordingly,
the tax liabilities set forth in the GUC Trusts U.S. federal income tax returns for the year ended March 31, 2015 and prior years are no longer subject to examination by the Internal Revenue Service. However, remaining capital loss
carryovers that were generated in those years, combined with capital gains and losses generated in the nine months ended December 31, 2015, from the new tax position, which aggregate $182.4 million, along with net operating loss carryovers
generated through December 31, 2015 aggregating $97.3 million, could be subject to examination by the Internal Revenue Service in subsequent years when those losses, if any, are utilized. The capital loss carryovers begin to expire on
March 31, 2017 and the net operating loss carryovers begin to expire on March 31, 2032. These loss carryovers in the aggregate result in a deferred tax asset of $110.8 million (reflected in the table above).
17
A full valuation allowance against net deferred tax assets aggregating $119.1 million was established as of
December 31, 2015 because the deferred tax assets are not realizable. Such valuation allowance was decreased by $0.9 million and increased $83.2 million from the full valuation allowance against net deferred tax assets established as of
September 30, 2015 and March 31, 2015, respectively.
|
8. |
Related Party Transactions |
In addition to serving as GUC Trust Administrator, Wilmington Trust Company continues to serve as trustee pursuant to the indentures for
certain series of previously outstanding debt of MLC. Wilmington Trust Company has received and will continue to receive certain customary fees in amounts consistent with Wilmington Trust Companys standard rates for such service. The
Bankruptcy Court previously approved the creation of a segregated fund for the purposes of funding such fees for Wilmington Trust Company, as well as the other indenture trustees and fiscal and paying agents for previously outstanding debt of MLC.
There were no such fees for Wilmington Trust Company in the three and nine months ended December 31, 2015 and 2014.
In addition, Wilmington Trust
Company has also entered into certain arrangements with the GUC Trust pursuant to which it or its affiliates have previously received, and may in the future receive, reasonable and customary fees and commissions for services other than services in
the capacity of GUC Trust Administrator. Such arrangements include the provision of custodial, investment advisory and brokerage services to the GUC Trust. The fees and commissions charged by Wilmington Trust Company and its affiliates pursuant to
these arrangements are consistent with the standard fees and commissions charged by Wilmington Trust Company to unrelated third parties in negotiated transactions. During the three and nine months ended December 31, 2015, the total amount of
such fees and commissions was approximately $85,000 and $150,000, respectively. During the three and nine months ended December 31, 2014, the total amount of such fees and commissions was approximately $5,000 and $17,000, respectively.
Item 2. |
Managements Discussion and Analysis |
The following
addresses material changes in the net assets in liquidation of the Motors Liquidation Company GUC Trust, or the GUC Trust, for its third fiscal quarter ended December 31, 2015. It is intended to be read in conjunction with the condensed
financial statements of the GUC Trust included in Item 1 above, which we refer to as the financial statements. For additional information about the purpose and administrative operations of the GUC Trust, see the disclosure in the notes to the
financial statements filed with this Form 10-Q and in the Form 10-K filed by the GUC Trust with the Securities and Exchange Commission on May 22, 2015. A glossary of defined terms used in this Form 10-Q is provided under the heading
Glossary below.
Overview
The GUC Trust is a successor to Motors Liquidation Company (which dissolved on December 15, 2011), or MLC, for the purposes of
Section 1145 of title 11 of the United States Code, or the Bankruptcy Code. The GUC Trust was initially formed on March 30, 2011, for the purposes of implementing the Second Amended Joint Chapter 11 Plan, or the Plan, of MLC and its
affiliated debtors-in-possession, or the Debtors, which was filed with the United States Bankruptcy Court for the Southern District of New York, or the Bankruptcy Court, on March 18, 2011. The Plan subsequently became effective on
March 31, 2011, or the Effective Date, and, on April 18, 2013, the Bankruptcy Court entered an order granting the GUC Trusts request for entry of a final decree administratively closing each of the Debtors chapter 11 cases other than
the chapter 11 case of MLC.
Functions and Responsibilities of the GUC Trust
The functions and responsibilities of the GUC Trust are governed by the Plan and the Second Amended and Restated Motors Liquidation Company GUC
Trust Agreement, dated as of July 30, 2015, or the GUC Trust Agreement. The GUC Trust is administered by Wilmington Trust Company, not in its individual capacity but solely in its capacity as trust administrator and trustee, or the GUC Trust
Administrator. As set forth in the GUC Trust Agreement, the activities of the GUC Trust Administrator are overseen by FTI Consulting, Inc., solely in its capacity as trust monitor of the GUC Trust, or the GUC Trust Monitor. Although the GUC Trust
has no officers, directors or employees, the GUC Trust Administrator is authorized by the GUC Trust Agreement to engage professionals and other service providers to assist the GUC Trust Administrator in the administration of the GUC Trust.
Accordingly, the GUC Trust and GUC Trust Administrator rely on receiving accurate information, reports and other representations from such professionals and service providers and from the GUC Trust Monitor.
Among its other duties and obligations, the GUC Trust is obligated pursuant to the Plan and the GUC Trust Agreement (i) to distribute the
assets comprising the corpus of the GUC Trust to satisfy the general unsecured claims against the Debtors that are allowed pursuant to the Plan, or the Allowed General Unsecured Claims, (ii) to prosecute and resolve objections to the general
unsecured claims against the Debtors that are disputed at a given time, or Disputed General Unsecured Claims, (iii) to take all necessary actions to administer the wind-down of the affairs of the Debtors, and (iv) to resolve and satisfy
(to the extent allowed) the Residual Wind-Down Claims (as defined below) assumed by the GUC Trust.
18
Distributions and Distributable Assets of the GUC Trust
As of December 31, 2015, the principal assets comprising the corpus of the GUC Trust are holdings of cash and cash equivalents and
marketable securities resulting from the liquidation in July and August 2015 of the GUC Trusts previously held (i) shares of common stock of General Motors Company, or the New GM Common Stock, (ii) warrants to acquire shares of New
GM Common Stock at an exercise price of $10.00 per share, expiring July 10, 2016, or the New GM Series A Warrants, and (iii) warrants to acquire shares of New GM Common Stock at an exercise price of $18.33 per share, expiring July 10,
2019, or the New GM Series B Warrants. The New GM Series A Warrants and the New GM Series B Warrants are referred to collectively as the New GM Warrants, and the New GM Common Stock and the New GM Warrants are referred to collectively as the New GM
Securities.
By order dated July 2, 2015, or the Liquidation Order, the Bankruptcy Court approved the conversion of the GUC
Trusts holdings of New GM Securities into cash. To effect such conversion, on July 7, 2015, the GUC Trust converted all of its holdings of New GM Warrants into New GM Common Stock in a cashless exercise. In total, the GUC Trust converted
(i) 10,352,556 New GM Series A Warrants into 7,407,155 shares of New GM Common Stock, and (ii) 10,352,556 New GM Series B Warrants into 4,953,635 shares of New GM Common Stock. Thereafter, the GUC Trust sold all of its holdings of New GM
Common Stock for net proceeds aggregating $741.7 million, having completed all such sales on August 5, 2015. As a result, all distributions by the GUC Trust thereafter in respect of any Allowed General Unsecured Claims (including in respect of
the GUC Trust Units) will be made solely in cash.
Pursuant to the Liquidation Order, the proceeds of such liquidations (net of applicable
costs, fees, and expenses paid in respect thereof) were allocated to the beneficiaries of the GUC Trust on a pro rata basis in the following manner:
|
(a) |
A GUC Trust beneficiarys entitlement to a particular number of New GM Warrants that were exercised was converted into an entitlement to receive the number of shares of New GM Common Stock into which such New GM
Warrants were exercised. Such conversions were .71549 shares of New GM Common Stock for each New GM Series A Warrant and .47849 shares of Common Stock for each New GM Series B Warrant; and |
|
(b) |
A GUC Trust beneficiarys entitlement to a particular number of shares of New GM Common Stock that were liquidated (including the exercised New GM Warrants as set forth above), was converted into an entitlement to
receive an amount of cash equal to the weighted average sales price (net of any applicable costs, fees, and expenses paid in respect thereof) of all of the New GM Common Stock sold, multiplied by the number shares of New GM Common Stock to which
such GUC Trust beneficiary would otherwise be entitled (including exercised New GM Warrants as set forth above). Such weighted average sales price for the GUC Trusts holdings of New GM Common Stock that were sold subsequent to June 30,
2015 was $31.23 per share. |
Following the liquidation described above, the GUC Trust has invested most of the proceeds in
certain marketable securities as permitted under the GUC Trust Agreement. The amount of cash and cash equivalents and marketable securities held for distribution to GUC Trust beneficiaries, including Dividend Cash (as defined below) is referred to
herein as Distributable Cash.
The Plan, as qualified by the Liquidation Order, generally provides for the distribution of
Distributable Cash (including Dividend Cash) to holders of Allowed General Unsecured Claims pro rata by the amount of such claims. In that regard, the Plan provides that each holder of an Allowed General Unsecured Claim will obtain, in addition to
an initial distribution of Distributable Cash (including Dividend Cash) in such amount as described below, a contingent right to receive, on a pro rata basis, additional Distributable Cash (including Dividend Cash) (only if and to the extent such
Distributable Cash is not required to satisfy new Allowed General Unsecured Claims or to fund the liquidation and administrative costs or income tax liabilities of the GUC Trust) available for distribution to the holders of such rights. Such rights
are represented by units of beneficial interests in the GUC Trust, or GUC Trust Units, distributed to holders of Allowed General Unsecured Claims in proportion to the amount of their claims, subject to certain rounding rules set forth in the Plan
and the GUC Trust Agreement.
Prior to the aforementioned liquidation of all its holdings of New GM Common Stock, the GUC Trust received
dividends on the New GM Common Stock it held as of the respective record dates aggregating approximately $24.7 million. Such dividends are required to be applied to the same purpose as the New GM Common Stock to which such dividends relate. If the
portion of Distributable Cash applicable to the proceeds from the liquidation of New GM Common Stock is distributed to holders of subsequently allowed Disputed General Unsecured Claims, allowed Term Loan Avoidance Action Claims, or GUC Trust Units,
then the dividends relating to such Distributable Cash will also be distributed to such holders. If, however, Distributable Cash is appropriated by the GUC Trust in accordance with the GUC Trust Agreement to fund the costs and liabilities of the GUC
Trust, then, in that case, the dividends relating to such Distributable Cash will be applied to such costs and liabilities of the GUC Trust and (just like the appropriated Distributable Cash) will be maintained in Other Administrative Cash (as
defined below under the heading Funding for the GUC Trusts Liquidation and Administrative Costs). Because such dividends are applied to the same purpose as the associated Distributable Cash, any references in this Form 10-Q to
Distributable Cash should be understood to include the dividends relating to such Distributable Cash, unless expressly indicated otherwise. The amount of cash and cash equivalents and marketable securities held by the GUC Trust that relates to
dividends received by the GUC Trust on New GM Common Stock previously held by the GUC Trust is referred to as Dividend Cash.
19
Pursuant to the GUC Trust Agreement, the GUC Trust is required to make quarterly distributions to
the holders of Allowed General Unsecured Claims that were allowed during the immediately preceding fiscal quarter. Under the terms of the Plan, the GUC Trust Agreement and the Liquidation Order (and subject to rounding under the Plan), and following
the liquidation of the GUC Trusts holdings of New GM Securities in July and August 2015, each $1,000 in amount of such new Allowed General Unsecured Claims is entitled to receive (upon delivery of any information required by the GUC Trust)
approximately $293 (which dollar value shifts slightly due to rounding as required by the Plan), which represents the net cash value of the New GM Securities that otherwise would have been distributed to such claimant prior to entry of the
Liquidation Order, together with associated cash in lieu of fractional shares and Dividend Cash, as well as one GUC Trust Unit. Such initial distribution includes a pro rata share of Distributable Cash associated with New GM Securities that were
distributed as Excess GUC Trust Distributable Assets (as defined below) in respect of GUC Trust Units since the Effective Date of the Plan. Quarterly distributions are made to holders of newly Allowed General Unsecured Claims as promptly as
practicable after the first day of the fiscal quarter following the periods ending each March 31, June 30, September 30 and December 31, during the life of the GUC Trust.
In addition to the foregoing, the GUC Trust is required to make quarterly distributions in respect of GUC Trust Units if Excess GUC Trust
Distributable Assets at the end of the preceding fiscal quarter exceed certain thresholds set forth in the Trust Agreement. Such distributions in respect of GUC Trust Units, if any, are made as promptly as practicable after the periods ending each
March 31, June 30, September 30 and December 31. Excess GUC Trust Distributable Assets means (i) Distributable Cash, including Dividend Cash (only if and to the extent such Distributable Cash (a) is not
required for the satisfaction of new Allowed General Unsecured Claims and (b) has not been set aside from distribution to fund potential liquidation and administrative costs or income tax liabilities of the GUC Trust (as described below under
Net Assets in LiquidationDistributable Cash Set Aside from Distribution) and (ii) Other Administrative Cash available, if any, for distribution to the holders of GUC Trust Units.
As described in Critical Accounting Policies and EstimatesIncome Taxes below, the GUC Trust is considered to be a Disputed
Ownership Fund pursuant to Treasury Regulation Section 1.468B-9. Pursuant to Treasury Regulation Section 1.468B-9(c)(6), upon the termination of the GUC Trust, certain capital losses and net operating losses may be distributable to current
or previous holders of GUC Trust Units. At this time, the amount of such losses that may be distributed is not determinable, the timing of such a distribution is dependent on a number of factors affecting the life of the GUC Trust and its
termination date, and who is entitled to receive such a distribution is not currently known. The GUC Trust has initiated discussions with the Internal Revenue Service to get clarification on some of these issues, but, at this time, it is highly
uncertain whether or not the Internal Revenue Service will provide the necessary guidance.
Funding for the GUC Trusts
Liquidation and Administrative Costs
As of the Effective Date, pursuant to the Plan, MLC funded approximately $52.7 million in cash to
the GUC Trust, or the Administrative Fund, to be held and maintained by the GUC Trust Administrator for the purpose of paying certain fees and expenses incurred by the GUC Trust (including the fees and expenses of the GUC Trust Administrator and the
GUC Trust Monitor, the fees and expenses of other professionals retained by the GUC Trust, and certain tax obligations), which are referred to as the Wind-Down Costs. The United States Department of the Treasury and the Governments of Canada and
Ontario (through Export Development Canada), which are referred to collectively as the DIP Lenders, maintain a lien on the Administrative Fund which relates to certain funds advanced at the commencement of the Debtors insolvency proceedings.
Consequently, pursuant to the GUC Trust Agreement, any cash or investments from the Administrative Fund which remain at the winding up and conclusion of the GUC Trust must be returned to the DIP Lenders. As of December 31, 2015, the remaining
Administrative Fund aggregated $8.2 million (consisting of cash and cash equivalents and marketable securities). As of December 31, 2015, $8.0 million of the remaining Administrative Fund has been designated for the satisfaction of certain
specifically identified costs and liabilities of the GUC Trust (a substantial majority of which will likely not be incurred and, therefore, will likely be returned to the DIP Lenders), and such amount may not be used for the payment of Trust
Professionals fees and expenses or other Wind-Down Costs. As described above, any cash or investments in the Administrative Fund that remain at the winding up and conclusion of the GUC Trust must be returned to the DIP Lenders.
The GUC Trust Agreement provides that the Administrative Fund may not be utilized to fund certain specified costs, fees and expenses, which
are referred to as Reporting Costs, including those directly or indirectly relating to (i) reports to be prepared and filed by the GUC Trust pursuant to applicable rules, regulations and interpretations of the Securities and Exchange
Commission, or the SEC, (ii) the transfer, registration for transfer and certification of GUC Trust Units, (iii) the application by the Committee to the Internal Revenue Service for a private letter ruling regarding the tax treatment of
the GUC Trust and the holders of Allowed General Unsecured Claims in respect to the distribution of New GM Securities, and (iv) certain legal proceedings relating to the Term Loan Avoidance Action. In addition, the Administrative Fund cannot be
used to fund any current or projected tax liabilities of the GUC Trust, other than those included in the Administrative Fund budget. However, the GUC Trust Agreement does provide the GUC Trust Administrator with the authority to set aside from
distribution and appropriate Distributable Cash to fund such Reporting Costs and projected tax liabilities (other than those included in the budget), with the approval of the Bankruptcy Court and/or the GUC Trust Monitor, in each case as described
below.
20
The GUC Trust Agreement affords the GUC Trust Administrator, with the approval of the GUC Trust
Monitor, the authority to set aside from distribution Distributable Cash (previously New GM Securities) in amounts sufficient to satisfy (i) any current or projected Wind-Down Costs of the GUC Trust that exceed the amounts budgeted or were not
budgeted in the Administrative Fund, including federal income taxes incurred in respect of dividends received by the GUC Trust on New GM Common Stock previously held by the GUC Trust, which are referred to as Dividend Taxes, and federal income taxes
incurred on investment income earned on Distributable Cash, which are referred to as Investment Income Taxes, (ii) any current or projected Reporting Costs that exceed the then currently available funds, or (iii) any current or projected
Taxes on Distribution (as defined below). This process is not related to, and is separate from, the process of recognizing any current and deferred income tax liabilities, as well as reserves for expected costs of liquidation in the Statement of Net
Assets in Liquidation as a matter of financial reporting, which is only required for expected costs of liquidation for which there is a reasonable basis for estimation under applicable accounting standards. See Critical Accounting Policies and
EstimatesReserves for Expected Costs of Liquidation and Income Taxes below.
The GUC Trust Administrator may
appropriate Distributable Cash (previously, set aside New GM Securities were sold) that has been set aside from distribution to fund (with the required approval of the Bankruptcy Court) the current or projected Wind-Down Costs (including Dividend
Taxes and Investment Income Taxes) or Reporting Costs of the GUC Trust and (with the required approval of only the GUC Trust Monitor) current and projected Taxes on Distribution of the GUC Trust. The cash and cash equivalents and marketable
securities associated with appropriated Distributable Cash (and, previously, sold set aside New GM Securities) are referred to as Other Administrative Cash. Pursuant to the GUC Trust Agreement, any cash and cash equivalents or marketable securities
constituting Other Administrative Cash that remain at the winding up and conclusion of the GUC Trust will be distributed to the holders of GUC Trust Units.
Prior to the aforementioned liquidation of all New GM Securities in July and August 2015, the GUC Trust was authorized, with the approval of
the GUC Trust Monitor, to set aside from distribution New GM Securities for the funding of Wind-Down Costs and Reporting Costs described above and to sell such set aside New GM Securities with the approval of the Bankruptcy Court. The Bankruptcy
Court previously approved in March and December 2012, and again in January 2015, the sale of New GM Securities to fund certain accrued and projected Wind-Down Costs which were in excess of the amounts budgeted in the Administrative Fund for such
costs, and certain projected Reporting Costs. Prior to the aforementioned liquidation of all the GUC Trusts holdings of New GM Securities, sales of New GM Securities to fund projected Reporting Costs and Wind-Down Costs through calendar year
2015 aggregated approximately $ 61.7 million, including Dividend Cash of $0.2 million and approximately $5.7 million expressly authorized by the GUC Trust Agreement to be liquidated shortly after the Effective Date for the purposes of funding
certain Reporting Costs, which is referred to as the Initial Reporting Cash. In December 2015, the Bankruptcy Court approved the appropriation of Distributable Cash aggregating approximately $12 million to fund the projected costs and expenses of
the GUC Trust for calendar year 2016. Such appropriation reduced Distributable Cash and increased Other Administrative Cash. As of December 31, 2015, approximately $15.8 million remained in Other Administrative Cash and was recorded in cash and
cash equivalents and marketable securities in the Condensed Statement of Net Assets in Liquidation as of December 31, 2015.
Residual Wind-Down Claims and Costs
In addition to resolving Disputed General Unsecured Claims, the GUC Trust Administrator is required to resolve and satisfy (to the extent
allowed) certain disputed administrative expenses, priority tax claims, priority non-tax claims, and secured claims against the Debtors, or the Residual Wind-Down Claims. Upon the dissolution and winding up of MLC on December 15, 2011, or the
Dissolution Date, the GUC Trust assumed responsibility for the resolution and satisfaction (to the extent allowed) of such Residual Wind-Down Claims. At that time, MLC transferred to the GUC Trust assets, or the Residual Wind-Down Assets, in an
amount sufficient, based upon the Debtors reasonable estimates, to satisfy the residual Wind-Down Claims and the costs, fees and expenses related to satisfying and resolving the Residual Wind-Down Claims, or the Residual Wind-Down Costs. The
Residual Wind-Down Assets so transferred approximated $42.8 million consisting of approximately $40.0 million in cash (including approximately $1.4 million for the payment of certain defense costs related to the Term Loan Avoidance Action, or
Avoidance Action Defense Costs) and the transferred benefit of approximately $2.8 million in prepaid expenses. As of December 31, 2015, the amount of Avoidance Action Defense Costs incurred to date exceeds the corresponding cash received by the
GUC Trust from MLC on the Dissolution Date by approximately $9.5 million. As a result, new Residual Wind-Down Claims have arisen in the amount of such excess. The Term Loan Avoidance Action is currently pending before the Bankruptcy Court, and it is
expected that additional Avoidance Action Defense Costs will be incurred for which additional Residual Wind-Down Claims will arise, to be paid from the remaining Residual Wind-Down Assets and, following any depletion of such assets, the
Administrative Fund (to the extent of any excess amounts remaining in the Administrative Fund from the funds designated for the satisfaction of certain specifically identified costs and liabilities of the GUC Trust), Other Administrative Cash or
appropriated Distributable Cash.
21
Pursuant to the GUC Trust Agreement and the Plan, the Residual Wind-Down Assets are to be
administered in accordance with the GUC Trust Agreement and Plan and are to be used to satisfy and resolve the Residual Wind-Down Claims (including Avoidance Action Defense Costs) and to fund the Residual Wind-Down Costs. Any unused portions of the
Residual Wind-Down Assets must be returned to the DIP Lenders and will not be available for distribution to the holders of GUC Trust Units at the winding up and conclusion of the GUC Trust. If, collectively, the actual amounts of Residual Wind-Down
Claims allowed (including Avoidance Action Defense Costs in excess of the corresponding cash of $1.4 million received by the GUC Trust from MLC on the Dissolution Date) and the Residual Wind-Down Costs exceed the Residual Wind-Down Assets, the GUC
Trust Administrator may be required to set aside from distribution and appropriate Distributable Cash to fund the shortfall. Any such appropriation would reduce the amount of Distributable Cash available for distribution to holders of GUC Trust
Units.
As of December 31, 2015, Residual Wind-Down Assets aggregating $22.3 million were held by the GUC Trust and were recorded in
cash and cash equivalents and marketable securities (aggregating approximately $22.2 million) and other assets and deposits (approximately $0.1 million) in the accompanying Condensed Statement of Net Assets in Liquidation as of December 31,
2015. A corresponding amount in the aggregate is recorded in the reserve for Residual Wind-Down Claims, reserves for expected costs of liquidation and accounts payable and accrued liabilities in the accompanying Condensed Statement of Net Assets in
Liquidation as of December 31, 2015. By comparison, there were approximately $0.5 million in Residual Wind-Down Claims against such assets as of December 31, 2015, subject to increase for new Residual Wind-Down Claims that are expected to
arise with respect to Avoidance Action Defense Costs.
Other Assets Received from MLC on the Dissolution Date
In addition to the Residual Wind-Down Assets, the GUC Trust also received on the Dissolution Date approximately $3.4 million in cash from MLC,
which amount included: (i) approximately $2.0 million designated for Reporting Costs and (ii) approximately $1.4 million designated for reimbursements to indenture trustees and fiscal and paying agents under the Debtors prepetition debt
issuances for costs associated with, among other things, administering distributions to registered holders of the debtors prepetition debt issuances, or Indenture Trustee / Fiscal and Paying Agents Costs. Any unused portion of such funds
designated for Indenture Trustee / Fiscal and Paying Agents Costs must be returned to the DIP Lenders and will not be available for distribution to the holders of GUC Trust Units at the winding up and conclusion of the GUC Trust. As of
December 31, 2015, funds designated for the Indenture Trustee / Fiscal and Paying Agents Costs of $0.3 million were held by the GUC Trust and are recorded in cash and cash equivalents in the accompanying Condensed Statement of Net Assets
in Liquidation as of December 31, 2015. A corresponding amount is recorded in the reserves for expected costs of liquidation in the accompanying Condensed Statement of Net Assets in Liquidation as of December 31, 2015. None of the
approximately $2.0 million in funds designated for Reporting Costs remained as of December 31, 2015.
Income Tax Liabilities for
Certain Capital Gains and Dividends on New GM Common Stock
Upon the dissolution and winding up of MLC on the Dissolution Date, record
ownership of all undistributed New GM Securities was transferred to the GUC Trust. Using the value of the New GM Securities as of that date, the tax basis per share or warrant of the New GM Securities on the Dissolution Date was $19.87 for the New
GM Common Stock, $11.38 for the New GM Series A Warrants and $7.88 for the New GM Series B Warrants. Prior to the year ended March 31, 2013, such tax basis was used in the GUC Trusts U.S. federal income tax return to determine the taxable
gain or loss on the disposition of New GM Securities since their transfer. Since the year ended March 31, 2013, the GUC Trust has filed its U.S. federal income tax returns taking the position that beneficial ownership for a substantial majority
of New GM Securities transferred from MLC to the GUC Trust on March 31, 2011, and that the tax basis of such New GM Securities should be determined with reference to the value of such securities on such date instead of December 15, 2011,
when record ownership of the remaining New GM Securities still held by MLC was transferred from MLC to the GUC Trust. For the remaining substantial minority of New GM Securities transferred from MLC to the GUC Trust, the GUC Trust determined that
transfer of beneficial ownership occurred on other dates for which the tax basis should be determined by reference to the value of such securities on such dates. This new tax position resulted in an increased tax basis of the New GM Securities from
the prior tax position and, therefore, reduced taxable gains and increased taxable losses on distributions and sales of New GM Securities since March 31, 2011. The GUC Trust believes, based on the available evidence and consultation with GUC
Trust professionals, that it is more likely than not that the new tax position in the amounts reflected in the GUC Trusts income tax returns will be sustained on examination by the Internal Revenue Service, based on the technical merits of the
position. Although the GUC Trusts federal income tax returns for the year ended March 31, 2015 and prior years are no longer subject to examination by the Internal Revenue Service as a result of the application of Section 505(b) of
the Bankruptcy Code, this new tax position, as of the date hereof, has not been sustained on examination by the Internal Revenue Service. Accordingly, remaining capital loss carryovers of $182.4 million as of December 31, 2015, from the new tax
position, along with net operating loss carryovers of $97.3 million as of December 31, 2015, could be subject to examination by the Internal Revenue Service in subsequent years when those losses, if any, are utilized.
The GUC Trust incurs U.S. federal income tax liabilities on any net capital gains realized upon the distribution of New GM Securities to
holders of Allowed General Unsecured Claims or GUC Trust Units or by sale of New GM Securities (unless such net capital gains are offset by deductible expenses and accumulated net operating losses), which are referred to as Taxes on Distribution.
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The GUC Trust also incurs income tax liabilities on investment income and dividends received on New GM Common Stock previously held by the GUC Trust (such income tax liabilities on dividends
received on New GM Common Stock and investment income are referred to as Dividend Taxes and Investment Income Taxes, respectively). The GUC Trust records any current taxes payable from such realized net gains and interest and dividends (net of
deductible operating losses and expenses) and, prior to the liquidation of all of the GUC Trusts holdings of New GM Securities in July and August 2015, described above under the heading Distributions and Distributable Assets,
recorded a deferred tax liability at the end of each quarter for all of the New GM Securities that it then held, where the market prices of such New GM Securities exceeded their tax basis. Where the market prices of the New GM Securities held at any
quarter end was less than their tax basis, a deferred tax asset with a corresponding valuation allowance was recorded, resulting in no net deferred tax asset at such quarter end. A full valuation allowance was recorded under such circumstances,
because realization of the deferred tax asset was uncertain (in that it was dependent upon the generation of taxable gains upon the sale or distribution of New GM Securities in the future, which was not determinable prior to occurrence). See
Critical Accounting Policies and EstimatesIncome Taxes below. A full valuation allowance was recorded against the GUC Trusts deferred tax assets at December 31, 2015 and March 31, 2015. As a result of the
liquidation of all of the GUC Trusts holdings of New GM Securities, it has been determined that such deferred tax assets are not realizable. See Note 7 (Income Tax Provision) to the financial statements.
Term Loan Avoidance Action
On July 31, 2009, the Committee commenced a legal action against certain prepetition lenders of the Debtors, styled as Official Committee
of Unsecured Creditors of Motors Liquidation Co. v. JPMorgan Chase Bank, N.A. et al. (Adv. Pro. No. 09-00504 (Bankr. S.D.N.Y. July 31, 2009)), which is referred to as the Term Loan Avoidance Action. The Term Loan Avoidance Action seeks the
return of approximately $1.5 billion that had been transferred to a consortium of prepetition lenders of the Debtors, pursuant to the court order approving the debtor-in-possession loans made by the DIP Lenders to MLC. On the Dissolution Date, the
Term Loan Avoidance Action was transferred to a trust established for the purpose of holding and prosecuting the Term Loan Avoidance Action, or the Avoidance Action Trust. As described in Part II, Item 1, Legal Proceedings,
litigation with respect to the Term Loan Avoidance Action is ongoing, and certain defendants have filed motions to dismiss the action. The rights to substantially all of the recoveries on the Term Loan Avoidance Action through the Avoidance Action
Trust are currently under dispute, with both the DIP Lenders and the Committee, on behalf of the holders of Allowed General Unsecured Claims, claiming to be the proper beneficiaries of such proceeds. If the DIP Lenders are deemed to be proper
beneficiaries of the proceeds of the Term Loan Avoidance Action, then the bulk of any amounts reclaimed from prepetition lenders will be distributed to the DIP Lenders; and, if the Committee, on behalf of the holders of Allowed General Unsecured
Claims, is deemed to be the proper beneficiary of the proceeds of the Term Loan Avoidance Action, then the bulk of any amounts reclaimed from prepetition lenders will be distributed directly to the holders of Allowed General Unsecured Claims.
Accordingly, regardless of the outcome of such proceedings, pursuant to the Plan, no amounts reclaimed from the prepetition lenders will be transferred to the GUC Trust, and no such amounts will be distributed to holders of GUC Trust Units in
respect of such GUC Trust Units.
If Wilmington Trust Company, not in its individual capacity but solely in its capacity as the trustee
and trust administrator of the Avoidance Action Trust, which is referred to as the Avoidance Action Trust Administrator, is successful in its prosecution of the Term Loan Avoidance Action, any amounts recovered by the Avoidance Action Trust will,
pursuant to the Plan, give rise to Allowed General Unsecured Claims on behalf of the prepetition lenders from which such amounts were recovered (as beneficiaries of the GUC Trust), which we also refer to as Term Loan Avoidance Action Claims. (As
used in this Form 10-Q, the amounts of Disputed General Unsecured Claims do not include any potential Term Loan Avoidance Action Claims.) Unless and until Term Loan Avoidance Action Claims arise, the potential holders of such claims will
not be entitled to receive a distribution from the GUC Trust. However, if and to the extent that such Term Loan Avoidance Action Claims do arise, the holders of such claims will be entitled to receive a distribution from the GUC Trust (unless the
Proposed Settlement described in Note 2 (Plan of Liquidation) to the financial statements and below is reached and is approved by the Bankruptcy Court). As noted above, pursuant to the Plan, no funds reclaimed from the prepetition
lenders will be transferred to the GUC Trust or be distributed to holders of GUC Trust Units in respect of such GUC Trust Units. Accordingly, in the event of the successful prosecution of the Term Loan Avoidance Action by the Avoidance Action Trust,
a holder of a GUC Trust Unit that does not hold a corresponding Allowed General Unsecured Claim (because such holder received the GUC Trust Unit as a subsequent transferee and not in a direct distribution from the GUC Trust in satisfaction of an
Allowed General Unsecured Claim) will potentially have its recovery diluted through the incurrence of Term Loan Avoidance Action Claims by the GUC Trust, without receiving the benefit of any cash recovered pursuant to the Term Loan Avoidance Action.
Moreover, because the ownership of the beneficial interests in the Avoidance Action Trust is currently under dispute, even a holder of a GUC Trust Unit that also holds a corresponding Allowed General Unsecured Claim may not benefit from any funds
recovered under the Term Loan Avoidance Action.
The GUC Trust has reached an agreement in principle, or the Proposed Agreement, with the
Avoidance Action Trust regarding the treatment of the potential Term Loan Avoidance Action Claims, which Proposed Agreement (to the extent it becomes effective) would have the effect of limiting the potential liability of the GUC Trust associated
with the Term Loan Avoidance Action Claims to $75 million (exclusive of approximately $55,000 of Term Loan Avoidance Action Claims that were allowed in the quarter ended December 31, 2015 as described in Note 3 (Net Assets in
Liquidation) to the financial statements). The terms of the Proposed Agreement, all of which are subject to the caveats set forth below, are as follows:
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The GUC Trust shall pay $75 million in cash to the Avoidance Action Trust; |
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The GUC Trust shall be relieved of its obligations to satisfy any Term Loan Avoidance Action Claims (exclusive of approximately $55,000 of Term Loan Avoidance Action Claims that were allowed in the quarter ended
December 31, 2015 as described in Note 3 (Net Assets in Liquidation) to the financial statements); and |
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The Avoidance Action Trust shall take on the GUC Trusts former obligation to satisfy Term Loan Avoidance Action Claims via a set-off from any amount disgorged by a defendant to the Term Loan Avoidance Action
(whether pursuant to a judgment or settlement). |
The Proposed Agreement has been approved by the trust monitors of the GUC
Trust and the Avoidance Action Trust, but is subject to, and will not be binding unless and until, the execution of definitive documentation acceptable to the parties thereto and other conditions precedent, including the approval of the Bankruptcy
Court, are satisfied. As of the date of this Form 10-Q, the GUC Trust and the Avoidance Action Trust continue to work towards definitive documentation and resolution of certain conditions precedent with respect to the Proposed Agreement. Whether the
Proposed Agreement will, at any point, become a binding agreement on the terms set forth above, or at all, is uncertain and subject to numerous risks. Accordingly, holders of GUC Trust Units should carefully consider such uncertainty before making
any decisions with respect to such units.
Pursuant to the Plan, the GUC Trust is obligated to satisfy reasonable Avoidance Action Defense
Costs, subject to the right of the GUC Trust to seek disgorgement in accordance with the terms of the Plan. As described under the heading Residual Wind-Down Claims above, the amount of Avoidance Action Defense Costs
incurred to date exceeds the amount of Residual Wind-Down Assets received from MLC which was designated for this purpose by approximately $9.5 million. As a result, new Residual Wind-Down Claims have arisen in the amount of such excess. As described
in Part II, Item 1, Legal Proceedings, litigation with respect to the Term Loan Avoidance Action is ongoing, and it is expected that additional Avoidance Action Defense Costs will be incurred for which additional Residual Wind-Down
Claims will arise, to be paid from the other remaining Residual Wind-Down Assets and, following the depletion of such assets, the Administrative Fund (to the extent of any excess amounts remaining in the Administrative Fund from the funds designated
for the satisfaction of certain specifically identified costs and liabilities of the GUC Trust), Other Administrative Cash or appropriated Distributable Cash.
Critical Accounting Policies and Estimates
Liquidation Basis of Accounting
The GUC Trust was created for the purposes described in Note 1 (Description of Trust and Reporting Policies) to the financial
statements and has a finite life. As a result, the GUC Trust has prepared its financial statements on the liquidation basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Under
the liquidation basis of accounting, assets are stated at their estimated realizable value, which is the non-discounted amount of cash into which an asset is expected to be converted during liquidation, while liabilities continue to be recognized at
the amount required by other U.S. GAAP, and are not remeasured to reflect any anticipation that an entity will be legally released from an obligation. Additionally, under the liquidation basis of accounting, a reserve is established for estimated
costs expected to be incurred during liquidation. Such costs are accrued when there is a reasonable basis for estimation. An accrual is also made for estimated income or cash expected to be received over the liquidation period to the extent that a
reasonable basis for estimation exists. These estimates are periodically reviewed and adjusted as appropriate. As described below under the heading Reserves for Expected Costs of Liquidation, it is reasonably possible that estimates for
expected costs of liquidation could change in the near term.
The valuation of assets at realizable value, reserves for Residual Wind-Down
Claims, reserves for expected liquidation costs and the accrual for investment income from marketable securities represent estimates, based on present facts and circumstances known to the GUC Trust Administrator, and are subject to change.
As described in Note 1 (Description of Trust and Reporting Policies) to the financial statements, the GUC Trust beneficiaries are
future and, to the extent their liquidating distributions have not yet been paid to them, current holders of Allowed General Unsecured Claims and future and current holders of GUC Trust Units. As Disputed General Unsecured Claims are resolved and
allowed and thereby become Allowed General Unsecured Claims, the holders thereof become entitled to receive liquidating distributions of Distributable Cash (including Dividend Cash) and GUC Trust Units pro rata by the amount of such claims and, upon
such occurrence, the GUC Trust incurs an obligation to distribute Distributable Cash. Accordingly, liquidating distributions payable are recorded in the amount of Distributable Cash (previously the fair value of New GM Securities) that the GUC trust
is obligated to distribute as of the end of the period in which the Disputed General Unsecured Claims are resolved as Allowed General Unsecured Claims. Similarly, unless the Proposed Settlement as described in Note 2 (Plan of
Liquidation) to the financial statements and above under the heading Functions and Responsibilities of the GUC Trust Term Loan Avoidance Action, is reached and is approved by the Bankruptcy Court, to the extent potential
Term Loan Avoidance Action Claims were to arise (and would become allowed) in the manner described in Note 2 (Plan of Liquidation) to the financial statements, liquidating distributions payable would be recorded for the Distributable
Cash (including the related Dividend Cash), that would become distributable to holders of Term Loan Avoidance Action Claims upon such occurrence. Prior to the resolution and allowance of Disputed General Unsecured Claims (or potential Term Loan
Avoidance Action Claims), liabilities are not recorded for the conditional obligations associated with Disputed General Unsecured Claims (or potential Term Loan Avoidance Action Claims). Rather, the beneficial interests of GUC Trust beneficiaries in
the residual assets of the GUC Trust are reflected in Net Assets in Liquidation of the GUC Trust in the financial statements.
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Under the liquidation basis of accounting, the GUC Trust presents two principal financial
statements: a Statement of Net Assets in Liquidation and a Statement of Changes in Net Assets in Liquidation. In addition, although not required under the liquidation basis of accounting, the GUC Trust also presents a Statement of Cash Flows, in
accordance with the requirements of the GUC Trust Agreement.
Holdings of New GM Securities and Dividends on New GM Common Stock
Holdings of New GM Securities at March 31, 2015 represent the GUC Trusts holdings of New GM Securities that were previously
held for future distribution in respect of Allowed General Unsecured Claims and the GUC Trust Units, and include amounts that were previously set aside from distribution to fund potential administrative costs and income tax liabilities (including
Taxes on Distribution, Dividend Taxes and Investment Income Taxes). The securities held consisted of shares of New GM Common Stock and New GM Warrants. As described above under Functions and Responsibilities of the GUC Trust
Distributions and Distributable Assets of the GUC Trust, pursuant to the Liquidation Order, the GUC Trust liquidated all of its holdings of New GM Securities during July and August 2015. The GUC Trust valued its holdings in the securities at
their fair value based on quoted closing market prices as of the last trading day of the fiscal period.
Beginning in the quarter ended
June 30, 2014 and through the quarter ended March 31, 2015, estimated dividends expected to be received on holdings of New GM Common Stock were accrued under the liquidation basis of accounting to the extent that a reasonable basis for
estimation existed. During the quarter ended June 30, 2015, based on a determination that it would be in the best interests of Trust Beneficiaries, the GUC Trust made a determination to file a motion with the Bankruptcy Court seeking authority
to liquidate all or substantially all of the GUC Trusts holdings of New GM Securities. Such motion was approved by the Bankruptcy Court in the Liquidation Order described above under the heading Functions and Responsibilities of the GUC
Trust Distributions and Distributable Assets of the GUC Trust, and all of the GUC Trusts holdings of New GM Securities were liquidated in July and August 2015. As a result, the GUC Trust no longer expected to receive dividends on
New GM Common Stock and previously accrued estimated future dividends (net of dividends received in June 2015) were reversed in the quarter ended June 30, 2015.
Dividends received on New GM Common Stock are required to be applied to the same purpose as the New GM Common Stock to which such dividends
relate. If the portion of Distributable Cash applicable to the liquidated New GM Common Stock is distributed to holders of subsequently Resolved Allowed Claims and GUC Trust Units, then the dividends relating to such Distributable Cash will also be
distributed to such holders. If, however, Distributable Cash is appropriated by the GUC Trust in accordance with the GUC Trust Agreement to fund the costs and liabilities of the GUC Trust, then, in that case, the dividends relating to such
appropriated Distributable Cash will be applied to such costs and liabilities of the GUC Trust and (just like the appropriated Distributable Cash) will be maintained in Other Administrative Cash. Because such dividends are applied to the same
purpose as the associated Distributable Cash, any references to Distributable Cash should be understood to include the dividends relating to such Distributable Cash, unless expressly indicated otherwise. The amount of cash and cash equivalents and
marketable securities held by the GUC Trust that relates to dividends received by the GUC Trust on New GM Common Stock previously held by the GUC Trust is referred to as Dividend Cash and is included in the amount of cash and cash equivalents and
marketable securities held for distribution to GUC Trust beneficiaries that is referred to as Distributable Cash (except to the extent of dividends relating to appropriated Distributable Cash that is classified as Other Administrative Cash following
such appropriation).
Marketable Securities and Accrued Investment Income on Marketable Securities
Marketable securities at December 31, 2015 consist of short-term investments in U.S. Treasury bills and U.S. government agency securities.
Marketable securities at March 31, 2015 consist of short-term investments in corporate commercial paper and municipal government commercial paper and variable demand notes. The GUC Trust has valued these securities at fair value based on
carrying value for U.S. Treasury bills and municipal and corporate commercial paper where carrying value approximates fair value, par value for variable demand notes where par value equals fair value, and based on pricing models, quoted market
prices of securities with similar characteristics or broker quotes for U.S. government agency securities. Beginning in the quarter ended June 30, 2014, estimated investment income expected to be received on short-term investments in marketable
securities is accrued under the liquidation basis of accounting to the extent that a reasonable basis for estimation exists.
Reserves
for Residual Wind-Down Claims and Residual Wind-Down Costs
Upon the dissolution of MLC, which occurred on December 15, 2011, the
GUC Trust became responsible for resolving and satisfying (to the extent allowed) all remaining Residual Wind-Down Claims. On the date of dissolution of the Debtors, the Debtors transferred to the GUC Trust Residual Wind-Down Assets in an amount
necessary to satisfy the ultimate allowed amount of such Residual Wind-Down Claims (including certain Avoidance Action Defense Costs) and the Residual Wind-Down Costs, as estimated
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by the Debtors. Should the Residual Wind-Down Costs and the Residual Wind-Down Claims be less than the Residual Wind-Down Assets, any excess funds will be returned to the DIP Lenders. If,
collectively, the actual amounts of Residual Wind-Down Claims (including certain Avoidance Action Defense Costs) allowed and the Residual Wind-Down Costs exceed the Residual Wind-Down Assets, the GUC Trust Administrator may be required to set aside
from distribution and appropriate Distributable Cash to fund the shortfall. Any such appropriation would reduce the amount of Distributable Cash (including Dividend Cash) available for distribution to holders of GUC Trust Units.
Reserves for Expected Costs of Liquidation
Under the liquidation basis of accounting, the GUC Trust is required to estimate and accrue the costs associated with implementing the Plan and
distributing the GUC Trusts distributable assets. These costs, described as Wind-Down Costs and Reporting Costs in Note 2 (Plan of Liquidation) to the financial statements, consist principally of professional fees, costs of
governance, and other administrative expenses. These amounts may vary significantly due to, among other things, the time and effort required to complete all distributions under the Plan. The GUC Trust has recorded reserves for expected costs of
liquidation that represent estimated costs to be incurred over the remaining liquidation period of the GUC Trust for which there is a reasonable basis for estimation. The amount of liquidation costs that will ultimately be incurred depends both on
the period of time and on the extent of activities required for the GUC Trust to complete its functions and responsibilities under the Plan and the GUC Trust Agreement. Significant uncertainty remains both as to that time period and as to the extent
of those activities. As of December 31, 2015, such remaining liquidation period extends through October 2017 and has been estimated predominantly on a probability-weighted basis, which the GUC Trust believes is the most appropriate measurement
basis under the circumstances. Where an outcome is estimated to be likely, the likely outcome has been used as the best estimate and no weight has been given to the unlikely outcome. The remaining liquidation period is dependent predominantly on the
estimate of the remaining period of time for resolution of the Term Loan Avoidance Action, as well as certain additional estimated time as necessary to wind down the GUC Trust. It is possible that future developments in the Term Loan Avoidance
Action could extend the current estimate of such remaining period of time for resolution and, therefore, extend the estimated remaining liquidation period of the GUC Trust beyond October 2017. It is also possible that future developments associated
with the Proposed Agreement as described in Note 2 (Plan of Liquidation) to the financial statements and above under the heading Functions and Responsibilities of the GUC Trust Term Loan Avoidance Action, could reduce
the estimate of the remaining liquidation period.
As described in Part II, Item 1, Legal Proceedings, the GUC Trust is
participating, as an interested party, in litigation involving certain General Motors vehicle recalls. While unlikely at this time, it is possible that such litigation could extend the remaining liquidation period of the GUC Trust beyond October
2017. It is reasonably possible that the GUC Trusts estimates regarding the costs and remaining liquidation period could change in the near term.
As the GUC Trust incurs liquidation costs, the reserves are released to offset the costs incurred and a liability to the service provider is
recognized as an accounts payable or accrued expense until paid. In addition, because the GUC Trust only records reserves for expected costs for which there is a reasonable basis for estimation under applicable U.S. GAAP, additional costs may be
identified from time to time for which additional reserves must be recorded. As such costs are identified, the GUC Trust records an increase to its reserves and charges such increase as an addition to such reserves in the Statement of Changes in Net
Assets in Liquidation.
The process of recording reserves for expected costs of liquidation as a matter of financial reporting is separate
and distinct from the process by which Distributable Cash is set aside from distribution for the purposes of funding projected costs of liquidation. Such projected costs are generally estimated on a more conservative (i.e., more inclusive) basis and
include contingencies that are not permitted to be accrued in reserves for expected costs of liquidation under applicable U.S. GAAP. For a more complete description of the process of setting aside Distributable Cash to fund projected costs and
potential liabilities of the GUC Trust, see Functions and Responsibilities of the GUC TrustFunding for the GUC Trusts Liquidation and Administrative Costs above and Net Assets in LiquidationDistributable Cash Set
Aside from Distribution below.
Income Taxes
The GUC Trust is considered to be a Disputed Ownership Fund pursuant to Treasury Regulation Section 1.468B-9. Because all of the assets
that have been transferred to the GUC Trust are passive investments, the GUC Trust will be taxed as a Qualified Settlement Fund (or QSF) pursuant to Treasury Regulation Section 1.468B-9(c)(1)(ii). The QSF tax status of the GUC Trust has been
approved by the Internal Revenue Service in a private letter ruling issued on March 2, 2011. In general, a QSF is considered to be a C Corporation but pays Federal income tax using trust income tax rates on its modified gross income. Modified
gross income includes gross income pursuant to Internal Revenue Code Section 61 less administrative expenses, certain losses from the sale, exchange or worthlessness of property, and net operating losses. In general, a Disputed Ownership Fund
taxed as a QSF does not recognize gross income on assets transferred to it; therefore, the GUC Trust has not recognized gross income on the transfer of assets from MLC.
The GUC Trust generates gross income in the form of interest and dividend income (including dividends received on its previous holdings of New
GM Common Stock) and recognizes gains and/or losses upon its disposition of shares of New GM Common Stock and New GM Warrants, which are reduced by administrative expenses and accumulated net operating and capital
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losses, to compute modified gross income. As the GUC Trust is taxable for Federal income tax purposes, a current income tax liability or asset, if any, is recognized for estimated taxes payable
or receivable for the year. Deferred tax liabilities and assets are recognized for the estimated future tax effects of temporary differences between financial reporting and tax accounting. Deferred tax assets are reviewed for recoverability and
valuation allowances are provided as necessary.
The GUC Trust is not subject to state income taxes under current law. Accordingly, no
current or deferred state income tax liabilities and assets are recorded.
The GUC Trust recognizes the tax benefit from an uncertain tax
position only if it is more likely than not that the tax position will be sustained on examination by the taxing authority, based on the technical merits of the position, review of available evidence and consultation with GUC Trust professionals.
The GUC Trusts tax liability with respect to its federal income tax returns for the year ended March 31, 2015, and all prior years, are no longer subject to examination as a result of the application of Section 505(b) of the
Bankruptcy Code. However, remaining capital loss carryovers that were generated in those years, combined with capital gains and losses generated in the nine months ended December 31, 2015, from the new tax position, which aggregate $182.4
million, along with net operating loss carryovers generated through December 31, 2015 aggregating $97.3 million, could be subject to examination by the Internal Revenue Service in subsequent years when those losses, if any, are utilized. As of
December 31, 2015, there are no known items which would result in a significant accrual for uncertain tax positions.
The process of
recognizing deferred tax assets and liabilities and any current income taxes payable as a matter of financial reporting is separate and distinct from the process by which Distributable Cash is set aside from distribution for the purposes of funding
potential income tax liabilities. Such potential income tax liabilities are generally estimated on a more conservative (i.e., more inclusive) basis and include amounts of potential income tax liabilities beyond the amounts that are permitted to be
recorded under applicable accounting standards. For a more complete description of the process of setting aside Distributable Cash to fund projected costs and potential income tax liabilities of the GUC Trust, see Functions and
Responsibilities of the GUC TrustFunding for the GUC Trusts Liquidation and Administrative Costs above and Net Assets in LiquidationDistributable Cash Set Aside from Distribution below.
Use of Estimates
The
preparation of financial statements on a liquidation basis in conformity with U.S. GAAP requires the use of estimates and assumptions that affect reported amounts of assets and liabilities. These estimates are subject to known and unknown risks,
uncertainties and other factors that could materially impact the amounts reported and disclosed in the financial statements and related footnotes. Significant estimates include the anticipated amounts and timing of future cash flows for expected
dividends to be received on holdings of New GM Common Stock (as of March 31, 2015 only), estimated investment income expected to be received, expected liquidation costs, Residual Wind-Down Claims and Costs, and fair value of marketable
securities. Actual results could differ from those estimates.
Statement of Changes in Net Assets in Liquidation
During the three months ended December 31, 2015, net assets in liquidation decreased by approximately $0.2 million, from approximately
$613.3 million to approximately $613.1 million, principally as a result of liquidating distributions of $2.7 million, largely offset by reductions of $2.5 million to the reserves for expected costs of liquidation. As described below in more detail
in Liquidation and Administrative Costs, the reduction in the reserves for expected costs of liquidation for the three months ended December 31, 2015 is primarily associated with estimated fee reductions for ongoing costs of
services provided by the GUC Trust Administrator and GUC Trust professionals.
During the nine months ended December 31, 2015, net
assets in liquidation decreased by approximately $331.6 million, from approximately $944.7 million to approximately $613.1 million, principally as a result of a decrease in the fair value of holdings of New GM Securities from March 31, 2015 to
the dates of liquidation of such New GM Securities of $175.2 million and liquidating distributions of $127.1 million. The changes in net assets in liquidation for the nine months ended December 31, 2015 also reflect the impact of an addition of
approximately $7.8 million to the reserves for expected costs of liquidation. As described below in more detail in Liquidation and Administrative Costs, the addition to the reserves for expected costs of liquidation for the nine months
ended December 31, 2015 resulted primarily from increases in expected costs resulting from an increase in the estimated length of the remaining liquidation period during the quarter ended September 30, 2015.
The changes in net assets in liquidation for the nine months ended December 31, 2015 also reflect a decrease of $21.5 million in dividend
and interest income. Such decrease is primarily a result of the reversal of accrued dividends of $22.4 million during the quarter ended June 30, 2015. As described in Note 1 (Description of Trust and Reporting Polices) to the
financial statements, during the quarter ended June 30, 2015, based on a determination that it would be on the best interests of Trust Beneficiaries, the GUC Trust made a determination to file a motion with the Bankruptcy Court seeking
authority to liquidate some or all of the GUC Trusts holdings of New GM Securities. Such motion was approved by the Bankruptcy Court in the Liquidation Order described in Note 3 (Net Assets in Liquidation) to the financial
statements and all of the GUC Trusts holdings of New GM Securities were liquidated in July and August 2015. Accordingly, the GUC Trust no longer expects to receive dividends on New GM Common Stock. Accordingly, the previous accrual for
estimated future dividends (net of dividends received in
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June 2015) was reversed in the quarter ended June 30, 2015 and no accrual of dividends was made subsequent to March 31, 2015. The decrease due to the reversal of accrued dividends on
the New GM Common Stock is offset in part by a $0.9 million increase during the nine months ended December 31, 2015 in investment income from marketable securities, primarily resulting from additional accruals of investment income during the
period.
There was no income tax provision or benefit during the three and nine months ended December 31, 2015 as a result of
cumulative net operating and capital losses and the establishment of a full valuation allowance against net deferred tax assets at the beginning and end of such periods. As a result of the liquidation of all of the GUC Trusts holdings of New
GM Securities, it has been determined that the deferred tax assets are not realizable. See Functions and Responsibilities of the GUC TrustIncome Tax Liabilities for Certain Capital Gains and Dividends on New GM Common Stock above
and Note 7 (Income Tax Provision), to the financial statements.
Liquidation and Administrative Costs
As discussed above under Critical Accounting Policies and Estimates, under the liquidation basis of accounting, the GUC Trust was
required upon its establishment to record reserves in respect of its expected costs associated with implementing the Plan and distributing the GUC Trusts distributable assets. These costs consist principally of professional fees, governance
costs and other liquidation and administrative costs.
Under U.S. GAAP, these reserves may be established only to the extent there is a
reasonable basis for their estimation. From time to time, as additional costs are identified and for which there is reasonable basis for estimation, the GUC Trust records an increase to its reserves for expected costs of liquidation and charges such
increase as an addition to reserves for expected costs of liquidation in the Statement of Changes in Net Assets in Liquidation. As costs are actually incurred by the GUC Trust, such costs reduce the previously recorded reserves for expected costs of
liquidation by the amount of such incurred costs, with no further effect on the Statement of Changes in Net Assets in Liquidation.
The
GUC Trusts reserves for liquidation and administrative costs (recorded in conformity with U.S. GAAP) are allocable into the following categories:
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reserve for expected Wind-Down Costs, corresponding to expenditures to be made out of the Administrative Fund and, following the depletion of the Administrative Fund, Other Administrative Cash (see Functions and
Responsibilities of the GUC TrustFunding for the GUC Trusts Liquidation and Administrative Costs); |
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reserve for expected Reporting Costs, corresponding to expenditures to be made out of Other Administrative Cash (see Functions and Responsibilities of the GUC TrustFunding for the GUC Trusts
Liquidation and Administrative Costs); |
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reserve for Indenture Trustee / Fiscal and Paying Agent Costs, corresponding to expenditures to be made out of the cash received by the GUC Trust from MLC on the Dissolution Date (see Functions and
Responsibilities of the GUC TrustOther Assets Received from MLC on the Dissolution Date); |
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reserve for Avoidance Action Defense Costs, corresponding to expenditures to be made out of Residual Wind-Down Assets and, following the depletion of such assets, the Administrative Fund with respect to any excess
amounts remaining from the funds designated for the satisfaction of certain specifically identified costs and liabilities of the GUC Trust, or Other Administrative Cash (see Functions and Responsibilities of the GUC TrustResidual
Wind-Down Claims and Functions and Responsibilities of the GUC TrustTerm Loan Avoidance Action); and |
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reserve for Residual Wind-Down Costs, corresponding (in addition to expenditures to satisfy and resolve Residual Wind-Down Claims) to expenditures to be made out of Residual Wind-Down Assets and, following the depletion
of the Residual Wind-Down Assets, Other Administrative Cash (see Functions and Responsibilities of the GUC TrustResidual Wind-Down Claims). |
As described in greater detail under Functions and Responsibilities of the GUC Trust above and Liquidity and Capital
Resources below, unused portions of certain of the assets associated with the foregoing reserves are required to be returned to the DIP Lenders upon the winding up and dissolution of the GUC Trust. Therefore, such assets are not available to
fund costs of liquidation and administration or income tax liabilities of the GUC Trust, and are also not available for distribution to the holders of Allowed General Unsecured Claims or GUC Trust Units. See Functions and Responsibilities of
the GUC TrustFunding for the GUC Trusts Liquidation and Administrative Costs, Functions and Responsibilities of the GUC TrustResidual Wind-Down Claims and Functions and Responsibilities of the GUC
TrustOther Assets Received from MLC on the Dissolution Date.
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As of December 31, 2015, the GUC Trust had approximately $27.6 million in reserves for
liquidation and administrative costs that are estimated to be incurred through the winding up and conclusion of the GUC Trust, compared to approximately $32.9 million in reserves as of September 30, 2015. The following table summarizes in
greater detail the changes in such reserves during the three months ended December 31, 2015:
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Three months ended December 31, 2015 |
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(in thousands) |
|
Reserve for Expected Wind-Down Costs |
|
|
Reserve for Expected Reporting Costs |
|
|
Reserve for Indenture Trustee/Fiscal and Paying Agent Costs |
|
|
Reserve for Residual Wind-Down Costs |
|
|
Total Reserves for Expected Costs of Liquidation |
|
Balance, September 30, 2015 |
|
$ |
22,176 |
|
|
$ |
9,178 |
|
|
$ |
329 |
|
|
$ |
1,219 |
|
|
$ |
32,902 |
|
Less reductions in reserves |
|
|
(1,555 |
) |
|
|
(919 |
) |
|
|
|
|
|
|
|
|
|
|
(2,474 |
) |
Less liquidation costs incurred: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals |
|
|
(1,093 |
) |
|
|
(358 |
) |
|
|
|
|
|
|
(1 |
) |
|
|
(1,452 |
) |
Trust Governance |
|
|
(816 |
) |
|
|
(450 |
) |
|
|
(21 |
) |
|
|
|
|
|
|
(1,287 |
) |
Other Administrative Expenses |
|
|
(13 |
) |
|
|
(83 |
) |
|
|
|
|
|
|
|
|
|
|
(96 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015 |
|
$ |
18,699 |
|
|
$ |
7,368 |
|
|
$ |
308 |
|
|
$ |
1,218 |
|
|
$ |
27,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserves were decreased approximately $2.5 million during the three months ended December 31, 2015, in
order to reflect a decrease in expected Wind-Down Costs of $1.6 million and a decrease in expected Reporting Costs of $0.9 million. The decreases in expected Wind-Down Costs and expected Reporting Costs during the three months ended
December 31, 2015, are primarily associated with estimated fee reductions for ongoing costs of services provided by the GUC Trust Administrator and GUC Trust professionals. In comparison, reserves were increased approximately $3.2 million
during the three months ended December 31, 2014, in order to reflect an increase in expected Wind-Down Costs of $3.0 million and an increase in expected Reporting Costs of $0.2 million. The increase in expected Wind-Down Costs during the three
months ended December 31, 2014 was primarily associated with increased expected legal costs resulting from the GUC Trusts participation as an interested party in legal proceedings related to New GM vehicle recalls, as well as an increase
in expected costs associated with an increase in the expected remaining life of the GUC Trust during the quarter ended December 31, 2014. The increase in expected Reporting Costs during the three months ended December 31, 2014 was
primarily associated with an increase in expected costs resulting from the increase in the expected remaining life of the GUC Trust, partly offset by a decrease in revised estimates of ongoing costs of services provided by GUC Trust professionals.
Reserves were increased approximately $7.8 million during the nine months ended December 31, 2015, in order to reflect an increase
in expected Wind-Down Costs of $5.6 million and an increase in expected Reporting Costs of $2.2 million. The increases in expected Wind-Down Costs and expected Reporting Costs during the nine months ended December 31, 2015, are primarily
associated with an increase in the estimated length of the remaining liquidation period during the quarter ended September 30, 2015. In addition, expected Wind-Down Costs increased during the nine months ended December 31, 2015 as a result
of additional expenses of GUC Trust professionals with respect to liquidation of the New GM Securities and amendment of the GUC Trust Agreement and commissions on the sale of New GM Common Stock. Expected Reporting Costs also increased during the
nine months ended December 31, 2015 as a result of additional expenses of GUC Trust professionals with respect to liquidation of the New GM Securities and increased insurance costs. In comparison, reserves were increased approximately $7.3
million during the nine months ended December 31, 2014, in order to reflect an increase in expected Wind-Down Costs of $7.6 million and a decrease in expected Reporting Costs of $0.3 million. The increase in expected Wind-Down Costs during the
nine months ended December 31, 2014 was primarily associated with increased expected legal costs resulting from the GUC Trusts participation as an interested party in legal proceedings related to New GM vehicle recalls, as well as
increases in revised estimates of ongoing costs necessary to conduct the wind-down activities of the GUC Trust and increases in expected costs resulting from the increase in the expected remaining life of the GUC Trust during the quarter ended
December 31, 2014. The decrease in expected Reporting Costs during the nine months ended December 31, 2014, was primarily associated with a reduction in revised estimates of ongoing costs of services provided by GUC Trust professionals,
largely offset by an increase in expected costs resulting from the increase in the expected remaining life of the GUC Trust.
Total
reserves were reduced by the amount of liquidation and administrative costs incurred during the three and nine months ended December 31, 2015. Trust professional costs incurred during the three and nine months ended December 31, 2015 were
approximately $1.5 million and $6.3 million, respectively, as compared to approximately $2.4 million and $6.8 million, respectively, for the three and nine months ended December 31, 2014. The decrease of $0.9 million from three-month period to
period is due primarily to a decrease in Wind-Down Costs charged to the reserve. The decrease of $0.5 million from nine-month period to period is due to a decrease of $0.9 million in Wind-Down Costs charged to the reserve, partly offset by an
increase of $0.4 million in Reporting Costs charged to the reserve. Trust Governance Costs incurred during the three and nine months ended December 31, 2015 were approximately $1.3 million and $4.1 million, respectively, as compared to $1.4
million and $4.2 million, respectively, for the three and nine months ended December 31, 2014. Other administrative costs during the three and nine months ended December 31, 2015 were approximately $0.1 million and $1.1 million,
respectively, as compared to approximately $0.1 million and $0.3 million, respectively, for the three and nine months ended December 31, 2014. The increase of $0.8 million for the comparable nine-month periods is primarily due to commissions on
the sale of
29
New GM Common Stock during the three months ended September 30, 2015. For additional information regarding the components of each category of costs, see Functions and Responsibilities
of the GUC TrustFunding for the GUC Trusts Liquidation and Administrative Costs, Functions and Responsibilities of the GUC TrustResidual Wind-Down Claims and Functions and Responsibilities of the GUC
TrustOther Assets Received from MLC Trust on the Dissolution Date.
The foregoing reserves represent future costs of the GUC
Trust for which there is a reasonable basis for estimation as of December 31, 2015 and, therefore, are recorded under the liquidation basis of accounting in accordance with U.S. GAAP. It is reasonably possible, however, that additional costs
will be incurred, for which there was not a reasonable basis for estimation as of December 31, 2015. In particular, as of December 31, 2015, the recorded reserves for expected costs of liquidation reflect estimated costs for a remaining
liquidation period extending through October 2017, which date is predominantly the result of the estimate of the period of time required for resolution of the Term Loan Avoidance Action, as well as certain additional estimated time as necessary to
wind down the GUC Trust, and assumes an extension of the current scheduled dissolution date of the GUC Trust. This end date of the remaining liquidation period has been estimated predominantly on a probability-weighted basis as permitted under U.S.
GAAP and which the GUC Trust believes is the most appropriate measurement basis under the circumstances. Where an outcome is estimated to be likely, the likely outcome has been used as the best estimate and no weight has been given to the unlikely
outcome. In addition, certain liquidation costs that are expected to be prepaid by the GUC Trust upon its dissolution have also been estimated and accrued. It is possible that future developments in the Term Loan Avoidance Action could extend the
current estimate of the remaining period of time required for resolution and, therefore, extend the estimated remaining liquidation period of the GUC Trust beyond October 2017. It is also possible that future developments associated with the
Proposed Agreement described in Note 2 (Plan if Liquidation) to the financial statements and above under the heading Functions and Responsibilities of the GUC Trust Term Loan Avoidance Action, could reduce the estimate
of the remaining liquidation period.
As described in Part 2, Item 1, Legal Proceedings, the GUC Trust is participating,
as an interested party, in litigation involving certain General Motors vehicle recalls. While unlikely at this time, it is possible that such litigation could extend the remaining liquidation period of the GUC Trust beyond October 2017.
The amount of liquidation costs that will ultimately be incurred depends both on the length of the remaining liquidation period and on the
extent of activities required for the GUC Trust to complete its functions and responsibilities under the Plan and the GUC Trust Agreement. Significant uncertainty remains both as to that time period and as to the extent of those activities. It is
reasonably possible that the GUC Trusts estimates regarding the remaining liquidation period and the expected costs of liquidation will change in the near term.
If the funds available for each of the foregoing categories of costs are not sufficient to satisfy any of the costs in that category, the GUC
Trust will be required to appropriate a portion of Distributable Cash in order to meet its additional obligations for those costs. Any such appropriation will result in a lesser amount of Distributable Cash available for distribution to holders of
GUC Trust Units.
The process of recognizing reserves for expected costs of liquidation as a matter of financial reporting is separate and
distinct from the process by which Distributable Cash is set aside from distribution for the purposes of funding projected costs of liquidation, which are generally estimated on a more conservative (i.e., more inclusive) basis and include
contingencies that are not permitted to be recognized under applicable accounting standards. As described in further detail below, certain amounts of Distributable Cash have already been set aside from distribution for the purposes of meeting such
additional obligations. However, the amounts set aside from distribution are neither reflected in nor a part of the financial statements included elsewhere in this Form 10-Q because the process of setting aside such assets is not related to the
process of recording, as a matter of financial reporting in the Statement of Net Assets in Liquidation, reserves for expected costs of liquidation or any current and deferred income tax liabilities. See Critical Accounting Policies and
EstimatesIncome Taxes and Critical Accounting Policies and EstimatesReserves for Expected Costs of Liquidation above and Net Assets in LiquidationDistributable Cash Set Aside from Distribution below.
For additional information regarding the reserves described above, see Note 2 (Plan of Liquidation) and Note 6
(Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims) to the financial statements.
30
Net Assets in Liquidation
Disputed Claims
The
following table presents a summary of the activity in Allowed and Disputed General Unsecured Claims and potential Term Loan Avoidance Action Claims for the three months ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Allowed General Unsecured Claims |
|
|
Disputed General Unsecured Claims |
|
|
Term Loan Avoidance Action Claims |
|
|
Maximum Amount of Unresolved Claims (1) |
|
|
Total Claim Amount (2) |
|
Total, September 30, 2015 |
|
$ |
31,853,630 |
|
|
$ |
70,000 |
|
|
$ |
1,500,000 |
|
|
$ |
1,570,000 |
|
|
$ |
33,423,630 |
|
New Allowed General Unsecured Claims, net |
|
|
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55 |
|
Term Loan Avoidance Action Claims resolved |
|
|
|
|
|
|
|
|
|
|
(55 |
) |
|
|
(55 |
) |
|
|
(55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total, December 31, 2015 |
|
$ |
31,853,685 |
|
|
$ |
70,000 |
|
|
$ |
1,499,945 |
|
|
$ |
1,569,945 |
|
|
$ |
33,423,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Maximum Amount of Unresolved Claims represents the sum of Disputed General Unsecured Claims and Term Loan Avoidance Action Claims. |
(2) |
Total Claim Amount represents the sum of Allowed General Unsecured Claims and Maximum Amount of Unresolved Claims. |
Distributable Assets
The table below
summarizes the activity in New GM Securities prior to their liquidation and Distributable Cash that comprises the GUC Trusts distributable assets, including the numbers of New GM Securities previously distributed, and the amount of
Distributable Cash distributable as of December 31, 2015, as well as the amount of Distributable Cash available for distribution to holders of GUC Trust Units as of December 31, 2015 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New GM Common Stock |
|
|
New GM Series A Warrants |
|
|
New GM Series B Warrants |
|
|
Distributable Cash (including Dividend Cash) |
|
Distributable Assets as of Effective Date (March 31, 2011) |
|
|
150,000 |
|
|
|
136,364 |
|
|
|
136,364 |
|
|
$ |
|
|
Dividends received on New GM Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,746 |
|
Prior distributions (1) |
|
|
(137,299 |
) |
|
|
(124,817 |
) |
|
|
(124,817 |
) |
|
|
(133,358 |
) |
Prior sales to fund GUC Trust costs and Avoidance Action Trust funding obligation |
|
|
(1,313 |
) |
|
|
(1,194 |
) |
|
|
(1,194 |
) |
|
|
(170 |
) |
Liquidation of New GM Securities (2) |
|
|
(11,388 |
) |
|
|
(10,353 |
) |
|
|
(10,353 |
) |
|
|
741,701 |
|
Appropriation of Distributable Cash to fund GUC Trust liquidation and administrative costs (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,046 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holdings as of December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
620,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Distributions payable at December 31, 2015 (1), (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,612 |
) |
Add: Distributions payable to holders of GUC Trust Units as of December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,702 |
|
Less: Amounts set aside from distribution to fund projected GUC Trust costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(44,324 |
) |
Less: Amounts set aside from distribution to fund projected Dividend Taxes and Investment Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,259 |
) |
Less: Amounts set aside from distribution to fund potential Taxes on Distribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(109,720 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributable Assets as of December 31, 2015 (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
462,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The numbers of New GM Securities shown as distributed or the amount of Distributable Cash shown as distributions payable include sales for (a) cash distributions to governmental entities to the extent such
governmental entities have requested such sales and demonstrated to the satisfaction of the GUC Trust Administrator that such governmental entities are precluded by applicable law from receiving distributions of New GM Securities and
(b) fractional amounts of New GM Securities, in lieu of which the GUC Trust is required pursuant to the GUC Trust Agreement to distribute cash, subject to certain minimum thresholds. |
31
(2) |
As described above under Functions and Responsibilities of the GUC Trust Distributions and Distributable Assets of the GUC Trust and in Note 1 (Description of Trust and Reporting Policies)
to the financial statements, the GUC Trusts holdings of New GM Securities were liquidated during July and August 2015. |
(3) |
During December 2015, the Bankruptcy Court approved the appropriation of approximately $12 million of Distributable Cash to fund liquidation and administrative costs of the GUC Trust for calendar year 2016.
|
(4) |
Distributions Payable includes both (i) Distributions Payable to holders of GUC Trust Units, in respect of Excess GUC Trust Distributable Assets that have not exceeded the minimum thresholds for distribution under
the GUC Trust Agreement and (ii) Distributions Payable in respect of new Allowed General Unsecured Claims (including both (a) Allowed General Unsecured Claims that were newly allowed during the quarter ended December 31, 2015, and
(b) Allowed General Unsecured Claims that were allowed in prior fiscal periods, but for which the holders of such claims had not yet supplied information required by the GUC Trust in order to effect the distribution to which they are entitled.
|
(5) |
Distributable Assets reflects the amounts of Distributable Cash and Dividend Cash shown as GUC Trust Distributable Assets on the report included as Exhibit 99.1 to the Form 8-K filed by the GUC Trust with
the SEC on January 27, 2016. Such Distributable Cash and associated Dividend Cash have been set aside for potential distribution in respect of current Disputed General Unsecured Claims and Term Loan Avoidance Action Claims as of
December 31, 2015. To the extent that such claims are resolved in favor of the GUC Trust, Distributable Cash and associated Dividend Cash may become available for distribution to holders of GUC Trust Units in future periods. The amount of
Distributable Cash and associated Dividend Cash set out above as Distributable Assets does not directly relate to Net Assets in Liquidation or any other number appearing in the GUC Trusts financial statements prepared in accordance
with U.S. GAAP. |
As described above under the heading Disputed Claims, as of December 31, 2015, there
were approximately $31.9 billion in Allowed General Unsecured Claims. In respect of such claims, the GUC Trust had previously distributed in the aggregate 137,298,736 shares of New GM Common Stock, 124,817,263 New GM Series A Warrants and
124,817,263 New GM Series B Warrants and $133.4 million of Distributable Cash. In addition, the GUC Trust was obligated to distribute as of December 31, 2015, $4.6 million of Distributable Cash. Such amount includes $2.7 million of
Distributable Cash that was distributable to holders of GUC Trust Units in respect of Excess GUC Trust Distributable Assets as of December 31, 2015.
Distributable Cash Set Aside from Distribution
Overview of Distributable Cash Set Aside from Distribution
In addition to distributions of Distributable Cash, which are reflected as reductions to the GUC Trust net assets in its financial statements,
the GUC Trust also, from time to time, sets aside Distributable Cash for potential future appropriation to fund projected liquidation and administrative costs, as well as potential income tax liabilities, including Dividend Taxes, Investment Income
Taxes and Taxes on Distribution. Distributable Cash that is set aside from distribution by the GUC Trust is not deducted from the net assets in liquidation of the GUC Trust in its financial statements unless and until such set aside Distributable
Cash is appropriated and expended. Distributable Cash set aside from distribution is segregated by the GUC Trust for such specific purposes and is not available for distribution to holders of GUC Trust Units or other claimants unless and to the
extent that the GUC Trust later determines that the set aside Distributable Cash is no longer needed to fund those specific purposes.
This process is not related to, and is separate from, the process of recording any current and deferred income tax liabilities and reserves
for expected costs of liquidation in the Statement of Net Assets in Liquidation, as a matter of financial reporting. As a matter of financial reporting, income tax liabilities and reserves for expected costs of liquidation must be determined in
accordance with generally accepted accounting principles applicable to the GUC Trust. By contrast, the estimates of projected costs and potential liabilities for which the GUC Trust may set aside Distributable Cash are generally made on a more
conservative (i.e., more inclusive) basis and include contingencies and amounts of potential income tax liabilities that are not permitted to be recognized under applicable accounting standards. See Critical Accounting
PoliciesIncome Taxes and Critical Accounting Policies and EstimatesReserves for Expected Costs of Liquidation above.
As of December 31, 2015, the distributable assets of the GUC Trust consisted of Distributable Cash of approximately $462.7 million
(including Dividend Cash), after deducting the amounts of Distributable Cash (including Dividend Cash) (i) set aside from distribution to fund additional projected liquidation and administrative costs and potential income tax liabilities of the
GUC Trust (as described below under the headings Set Aside Calculations Relating to Projected Liquidation and Administrative Costs, Including Dividend Taxes and Set Aside Calculations Relating to Potential Taxes on
Distribution) and (ii) set aside for distributions payable in respect of New Allowed General Unsecured Claims and Allowed General Unsecured Claims that were allowed in prior fiscal periods, but for which the holders of such claims had not
yet supplied information required by the GUC Trust in order to effect the distributions to which they are entitled. Such Distributable Cash has been set aside for potential distribution in respect of current Disputed General Unsecured Claims and
Term Loan Avoidance Action Claims. To the extent such claims are resolved in favor of the GUC Trust, Distributable Cash (including
32
Dividend Cash) may become available for distribution to holders of GUC Trust Units in future periods. As described in Note 2 (Plan of Liquidation) to the financial statements and
above under the heading Functions and Responsibilities of the GUC Trust Term Loan Avoidance Action, the Proposed Agreement (to the extent it becomes effective) would have the effect of limiting the potential liability of the GUC
Trust associated with the Term Loan Avoidance Action Claims to $75 million.
Prior to the liquidation of all the GUC Trusts
holdings of New GM Securities in July and August 2015, New GM Securities were set aside to fund projected liquidation and administrative costs and potential income tax liabilities as described below.
Set Aside Calculations Relating to Projected Liquidation and Administrative Costs, Including Dividend Taxes and Investment Income Taxes
The GUC Trust Administrator reevaluates, on a quarterly basis, the amount of Distributable Cash (including Dividend Cash) needed to be set
aside from distribution for purposes of funding projected liquidation and administrative costs, including Dividend Taxes and Investment Income Taxes. This determination is made on a basis different than that used to calculate reserves for financial
statement purposes. Under the current methodology, the amount to be set aside is equal to the estimates of projected liquidation and administrative costs (including Dividend Taxes and Investment Income Taxes). Prior to the liquidation of all of the
GUC Trusts holdings of New GM Securities, estimates of projected liquidation and administrative costs (including Dividend Taxes and Investment Income Taxes) were converted into the number of New GM Securities to be set aside from distribution
by dividing such estimates by the trailing twelve-month average closing prices for the New GM Securities. A corresponding amount of Dividend Cash associated with the set-aside New GM Securities was also set aside from distribution.
For the quarter ended December 31, 2015, as a result of the standard quarterly reevaluations described above, the estimate of unfunded
projected liquidation and administrative costs (including Dividend Taxes and Investment Income Taxes) was decreased by $15.9 million, which resulted in a corresponding decrease of $15.9 million in the needed set aside of Distributable Cash as
compared with the Distributable Cash previously set aside from distribution. Such decrease in unfunded projected Wind-Down and Reporting and Transfer Costs was primarily related to the appropriation of Distributable Cash of $12 million in December
2015 described above under the heading Functions and Responsibilities of the GUC Trust Funding for the GUC Trusts Liquidation and Administrative Costs, as well as a decrease in expected costs of the GUC Trust Administrator
and GUC Trust professionals described under the heading Liquidation and Administrative Costs above. Accordingly, as of December 31, 2015, the GUC Trust had set aside from distribution Distributable Cash of $46.6 million for the
purposes of funding future projected liquidation and administrative costs of the GUC Trust, including Dividend Taxes and Investment Income Taxes of $2.3 million. Such amount was sufficient to fully fund projected liquidation and administrative costs
of the GUC Trust, as estimated by the GUC Trust Administrator at December 31, 2015.
Set Aside Calculations Relating to Potential
Taxes on Distribution
In addition to reevaluating the amount of Distributable Cash (including Dividend Cash) to be set aside from
distribution to fund projected liquidation and administrative costs, including Dividend Taxes and Investment Income Taxes, the GUC Trust Administrator also reevaluates, on a quarterly basis, the amount of Distributable Cash needed to be set aside
from distribution to fund potential income tax liabilities on realized gains from the disposition of New GM Securities, which are referred to as Taxes on Distribution. The current methodology for calculating such set aside estimates potential Taxes
on Distribution by applying the applicable U.S. federal income tax rate to realized capital gains that are still subject to examination by the Internal Revenue Service, less current period tax deductible expenses and future tax deductible expenses.
Such realized capital gains are computed using a tax basis for the New GM Securities based on the date of transfer of record ownership of the New GM Securities to the GUC Trust from MLC on December 15, 2011 and the tax basis of the New GM
Common Stock received for the exercise of the New GM Warrants pursuant to the Liquidation Order.
Prior to the liquidation of all of the
GUC Trusts holdings of New GM Securities, estimates of potential Taxes on Distribution were arrived at by applying the applicable U.S. federal income tax rate to estimates of potential capital gains, including (a) realized capital gains
that were still subject to adjustment by the Internal Revenue Service, less current period deductible expenses and future tax deductible expenses, and (b) potential future capital gains on holdings of New GM Securities at the date of
measurement. Such potential future capital gains were determined by comparing the highest closing price for the New GM Securities since December 15, 2011, against the tax basis of the New GM Securities. For realized capital gains and potential
future capital gains, such tax basis was determined based on the date of transfer of record ownership of the New GM Securities on December 15, 2011. Potential Taxes on Distribution were then converted into the number of New GM Securities to be
set aside from distribution by dividing such estimates by the trailing twelve-month average closing prices for the New GM Securities. Dividend Cash associated with the set aside New GM Securities was also set aside from distribution.
The GUC Trusts calculation of the amount of Distributable Cash needed to be set aside from distribution to fund such potential Taxes on
Distribution is made using a different methodology than that used to calculate any current and deferred taxes for financial statement purposes. As described above, in estimating potential Taxes on Distribution, the current set aside methodology
calculates realized capital gains using the tax basis of the New GM Securities on December 15, 2011. By contrast, in calculating any current and
33
deferred taxes for purposes of financial reporting under applicable U.S. GAAP, the GUC Trust calculates realized capital gains using the tax basis of the New GM Securities for financial reporting
purposes, which is based on the date of transfer of beneficial ownership of the New GM Securities to the GUC Trust from MLC.
For the
quarter ended December 31, 2015, as a result of the standard quarterly reevaluations described above, estimates of Taxes on Distribution were increased by $1.0 million, which resulted in a corresponding increase in the amount of Distributable
Cash set aside from distribution to fund projected Taxes on Distribution of the GUC Trust of $1.0 million as compared with the Distributable Cash previously set aside from distribution. The increase in Taxes on Distributions primarily resulted from
an increase in expected taxable income resulting from a decrease in the expected costs of liquidation during the quarter. Accordingly, as of December 31, 2015, the GUC Trust had set aside from distribution Distributable Cash of $109.7 million,
for the purposes of funding potential Taxes on Distribution of the GUC Trust. Such amounts were sufficient to fully fund potential Taxes on Distribution of the GUC Trust, as estimated by the GUC Trust Administrator at December 31, 2015.
The set aside calculation for potential Taxes on Distribution as of December 31, 2015 is set forth below:
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
New GM Common Stock |
|
|
New GM Series A Warrants |
|
|
New GM Series B Warrants |
|
|
Total |
|
Number of New GM Securities liquidated by the GUC Trust during the quarter ended September 30, 2015 |
|
|
11,388,041 |
|
|
|
10,352,556 |
|
|
|
10,352,556 |
|
|
|
|
|
Average net cash proceeds derived per share/warrant |
|
$ |
31.23 |
|
|
$ |
22.35 |
|
|
$ |
14.94 |
|
|
|
|
|
Tax basis of New GM Securities (1) |
|
|
19.87 |
|
|
|
11.38 |
|
|
|
7.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential taxable gain per share/warrant |
|
$ |
11.36 |
|
|
$ |
10.97 |
|
|
$ |
7.06 |
|
|
|
|
|
Potential taxable gain from liquidation of New GM Securities (in thousands) |
|
$ |
129,381 |
|
|
$ |
113,521 |
|
|
$ |
73,129 |
|
|
$ |
316,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net capital gains and operating losses since March 31, 2015, exclusive of capital gains from liquidation of New GM
Securities (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,723 |
) |
Additional expected tax deductible costs of liquidation (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22,237 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated potential taxable income (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
277,071 |
|
Tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Distributable Cash, including Dividend Cash set aside (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
109,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Using the date of transfer of record ownership of the New GM Securities to the GUC Trust from MLC on December 15, 2011, for purposes of determining the tax basis thereof. |
(2) |
The net capital gains and net operating losses since March 31, 2015 reflect taxable capital gains on distributions of New GM Securities using the tax basis of the New GM Securities described in (1) above.
Operating income excludes dividends received on New GM Common Stock held by the GUC Trust and investment income for which potential Dividend Taxes and Investment Income Taxes are reflected in the set aside for purposes of funding projected
liquidation and administrative costs. Remaining capital and net operating loss carryovers through March 31, 2015 are subject to examination by the Internal Revenue Service and, therefore, are excluded. |
It is the view of the GUC Trust Administrator, after consultation with the GUC Trust Monitor and other professionals retained by the GUC
Trust, that the calculation methodologies described above, on the basis of which Distributable Cash (including Dividend Cash) is set aside from distribution, generally estimate the projected liquidation and administrative costs and potential tax
liabilities of the GUC Trust on a conservative basis. Accordingly, it is the view of the GUC Trust Administrator and the GUC Trust Monitor that the Distributable Cash currently set aside from distribution to fund such costs and liabilities would be
sufficient to satisfy such obligations of the GUC Trust as of the date of this Form 10-Q. However, there can be no assurance that the amount of Distributable Cash set aside will be sufficient to fund such costs and liabilities as they are actually
incurred. In addition, there can be no assurance that, as a result of future evaluations, additional Distributable Cash will not need to be set aside or appropriated to fund additional costs and liabilities, beyond those that are currently included
in the GUC Trusts estimates, in particular as a result of changes in the GUC Trusts estimates of projected costs and potential liabilities. See Liquidity and Capital Resources below.
34
GUC Trust Units
The following table presents the changes during the three months ended December 31, 2015, in the numbers of GUC Trust Units outstanding or which the GUC
Trust was obligated to issue:
|
|
|
|
|
|
|
Trust Units |
|
Outstanding or issuable at September 30, 2015 |
|
|
31,853,702 |
|
Issued during the period |
|
|
|
|
Less: Issuable at beginning of period |
|
|
|
|
Add: Issuable at end of period (1) |
|
|
56 |
|
|
|
|
|
|
Outstanding or issuable at December 31, 2015 (2) |
|
|
31,853,758 |
|
|
|
|
|
|
(1) |
The number of GUC Trust Units issuable at any time represents GUC Trust Units issuable in respect of Allowed General Unsecured Claims that were newly allowed during the fiscal quarter. |
(2) |
The number of GUC Trust Units outstanding at any time represents GUC Trust Units issued in respect of Allowed General Unsecured Claims that were allowed in prior periods, including GUC Trust Units held by the GUC Trust
for the benefit of (a) holders of Allowed General Unsecured Claims who had not yet supplied information required by the GUC Trust in order to effect the initial distribution to which they are entitled and (b) governmental entities that are
precluded by applicable law from receiving distributions of GUC Trust Units. |
Liquidity and Capital Resources
The GUC Trusts sources of liquidity are principally the funds it holds for the payment of liquidation and administrative costs, and to a
significantly lesser degree, the earnings on such funds invested by it. In addition, as a result of the liquidation of all the GUC Trusts holdings of New GM Securities during the quarter ended September 30, 2015, the GUC Trust holds
Distributable Cash for distribution to GUC Trust beneficiaries. The GUC Trust holds such funds as cash and cash equivalents and also invests such funds in certain marketable securities, primarily U.S. Treasury bills, as permitted by the Plan and the
GUC Trust Agreement.
During the nine months ended December 31, 2015, the GUC Trusts holdings of cash and cash equivalents
decreased approximately $13.0 million from approximately $37.5 million to approximately $24.5 million. The decrease was primarily due to cash paid for liquidation and administrative costs of $11.0 million and cash paid for Residual Wind-Down Claims
of $6.0 million, offset in part by receipts of cash dividends on holdings of New GM Common Stock of $4.1 million. Cash distributions of approximately $130.0 million during the nine months ended December 31, 2015 were funded from the proceeds of
the liquidation of New GM Securities of $741.7 million, with the balance of such proceeds remaining largely invested in Marketable Securities.
During the nine months ended December 31, 2015, the funds invested by the GUC Trust in marketable securities increased approximately
$612.3 million, from approximately $30.9 million to approximately $643.2 million. The increase was due primarily to the liquidation of all the GUC Trusts holdings of New GM Securities during the quarter ended September 30, 2015. The GUC
Trust earned approximately $0.4 million in interest income on such investments during the period.
As of December 31, 2015, the GUC
Trust held approximately $667.6 million in cash and cash equivalents and marketable securities. Of such amount, approximately $620.9 million relates to Distributable Cash (including Dividend Cash), a portion of which the GUC Trust Administrator is
permitted to set aside from distribution and to appropriate with the approval of the Bankruptcy Court or Trust Monitor, as applicable, in order to fund additional costs and income tax liabilities (including Dividend Taxes, Investment Income Taxes
and Taxes on Distribution) as they become due. Included in Distributable Cash at December 31, 2015, is approximately $17.3 million of Dividend Cash. As described above, Dividend Cash will be distributed to holders of subsequently Resolved
Allowed Claims and GUC Trust Units in respect of Distributable Cash that they receive, unless such dividends are in respect of Distributable Cash that is appropriated by the GUC Trust in accordance with the GUC Trust Agreement to fund the GUC
Trusts liquidation and administrative costs, income tax liabilities or shortfalls in Residual Wind-Down Assets.
As of
December 31, 2015, Distributable Cash (including Dividend Cash) held by the GUC Trust was set aside as follows: (a) $4.6 million for liquidating distributions payable as of that date, (b) $46.6 million to fund projected liquidation
and administrative costs, including Dividend Taxes and Investment Income Taxes, and (c) $109.7 million to fund potential Taxes on Distribution. See Net Assets in LiquidationDistributable Assets above.
In addition to Distributable Cash (including Dividend Cash), the GUC Trust held $46.7 million in cash and cash equivalents and marketable
securities at December 31, 2015, representing funds held for payment of costs of liquidation and administration. Of that amount, approximately $30.7 million (comprising approximately $22.2 million of the remaining Residual Wind-Down
Assets, approximately $8.2 million of the remaining Administrative Fund and approximately $0.3 million in remaining funds designated for the Indenture Trustee / Fiscal and Paying Agent Costs), is required by the GUC Trust Agreement to be returned,
upon the winding-up
35
of the GUC Trust, to the DIP Lenders to the extent such funds are not utilized to satisfy designated Wind-Down Costs, Residual Wind-Down Claims, Residual Wind-Down Costs, Avoidance Action Defense
Costs and Indenture Trustee/Fiscal Paying Agent Costs. Cash and cash equivalents and marketable securities of $8.0 million remaining in the Administrative Fund have been designated for the satisfaction of certain specifically identified costs
and liabilities of the GUC Trust (a substantial majority of which will likely not be incurred and, therefore, will likely be returned to the DIP Lenders), and such amounts may not be used for the payment of GUC Trust professionals fees and
expenses or other Wind-Down Costs. Such amounts will not at any time be available for distribution to the holders of the GUC Trust Units. The balance of cash and cash equivalents and marketable securities of approximately $16.0 million is
available for the payment of certain reporting and administrative costs of the GUC Trust, and would be available in the future for distribution to the holders of the GUC Trust Units, if not otherwise used to satisfy those GUC Trust
obligations. See Functions and Responsibilities of the GUC Trust above.
There is no assurance that additional amounts of
Distributable Cash will not be required to be set aside from distribution and appropriated to fund additional costs and income tax liabilities, beyond what the GUC Trust Administrator has already set aside. Any appropriation of Distributable Cash
that occurs to fund such obligations will result in a lesser amount of Distributable Cash available for distribution to holders of GUC Trust Units. In addition, as described above under the headings Functions and Responsibilities of the GUC
TrustResidual Wind-Down Claims and Functions and Responsibilities of the GUC TrustOther Assets Received from MLC on the Dissolution Date, a portion of the GUC Trusts assets are currently segregated pursuant to the
GUC Trust Agreement for the satisfaction of Residual Wind-Down Claims and certain other specified costs. If such assets are insufficient to satisfy the Residual Wind-Down Claims or fund such other specified costs for any reason, the GUC Trust
Administrator will similarly be required to set aside from distribution and appropriate additional amounts of Distributable Cash in order to fund such shortfall.
Forward-Looking Statements
This Form
10-Q contains forward-looking statements about the assets, financial condition and prospects of the GUC Trust. Actual results could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties,
including, without limitation, the resolution of the Disputed General Unsecured Claims, the outcome of and the ultimate recovery on the Term Loan Avoidance Action, any related incurrence of Allowed General Unsecured Claims, the GUC Trusts
incurrence of professional fees, tax liabilities and other expenses in connection with administration of the GUC Trust, economic conditions, changes in tax and other governmental rules and regulations applicable to the GUC Trust, and other risks.
Some of these risks and uncertainties are beyond the ability of the GUC Trust to control, and in many cases, risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements cannot
be predicted. When used in this Form 10-Q, the words believes, estimates, plans, expects, intends, and anticipates and similar expressions are intended to identify
forward-looking statements.
Glossary
The capitalized terms used in this Form 10-Q but not otherwise defined shall have the respective meanings set forth below. For additional
information on any of the matters relating to such terms, see the disclosure in the notes to the financial statements filed with this Form 10-Q and in the Form 8-K filed by the GUC Trust with the Securities and Exchange Commission on June 12,
2012.
Administrative Agent means JPMorgan Chase Bank, N.A. in its capacity as administrative agent for various lenders party
to the Term Loan.
Administrative Fund means the cash contributed to the GUC Trust to be held and maintained by the GUC Trust
Administrator for the purpose of paying the Wind-Down Costs.
ADR Proceedings means alternative dispute resolution
proceedings, including mediation and arbitration.
Allowed General Unsecured Claims means the general unsecured claims against
the Debtors that are allowed at any given time.
Avoidance Action Defense Costs means certain reasonable costs, fees and
expenses which the GUC Trust is obligated to satisfy relating to defending the Term Loan Avoidance Action, subject to the right of the GUC Trust to seek disgorgement in accordance with the terms of the Plan.
Avoidance Action Trust means the trust established under the Plan for the purpose of holding and prosecuting the Term Loan
Avoidance Action.
Avoidance Action Trust Administrator means Wilmington Trust Company, not in its individual capacity but
solely in its capacity as the trustee and trust administrator of the Avoidance Action Trust.
36
Bankruptcy Code means title 11 of the United States Code.
Bankruptcy Court means the United States Bankruptcy Court for the Southern District of New York.
Closing Date means July 10, 2009, the date on which the sale of substantially all of the assets of Old GM pursuant to the
MSPA was completed.
Committee means the Official Committee of Unsecured Creditors of the Debtors appointed by the Office of
the United States Trustee in the chapter 11 cases of the Debtors.
Committee Summary Judgment Motion means the Motion of
Official Committee of Unsecured Creditors for Partial Summary Judgment (Docket No. 24) filed by the Committee on July 1, 2010, seeking a ruling in favor of the Committee with respect to the perfection of the UCC Collateral.
Cross-Motions for Summary Judgment means the Committee Summary Judgment Motion and the JPMorgan Summary Judgment Motion.
Debtors means MLC and its affiliated debtors and debtors-in-possession.
DIP Credit Agreement means the Debtor-In-Possession Credit Agreement, dated as of July 10, 2009, by and among MLC, as
borrower, the guarantors named therein, the U.S. Treasury, as lender, and the Governments of Canada and Ontario, through Export Development Canada, as lenders.
DIP Lenders means the United States Department of Treasury and the Governments of Canada and Ontario, through Export Development
Canada.
Disputed General Unsecured Claims means the general unsecured claims against the Debtors that are disputed at a given
time and does not include any potential Term Loan Avoidance Action Claims.
Dissolution Date means December 15, 2011, the
date that MLC filed a Certificate of Dissolution with the Secretary of State of Delaware and was dissolved.
Distributable
Cash means the amount of cash and cash equivalents and marketable securities held for distribution to GUC Trust beneficiaries and includes Dividend Cash.
Dividend Cash means the amount of cash and cash equivalents and marketable securities held by the GUC Trust that relates to
dividends received by the GUC Trust on New GM Common Stock then held, or previously held, by the GUC Trust.
Dividend Taxes
means federal income taxes incurred in respect of dividends received by the GUC Trust on New GM Common Stock then held, or previously held, by the GUC Trust.
Effective Date means March 31, 2011, the date that the Plan became effective.
Equitable Mootness Finding means the holding of the Bankruptcy Court in the Threshold Issues Decision and the Threshold Issues
Judgment that the plaintiffs in the Ignition Switch Economic Loss Actions and the Ignition Switch Personal Injury Actions may seek authorization to file late claims in the bankruptcy cases of Old GM, but that any such claims as against the GUC Trust
are equitably moot (that is, fashioning relief for the plaintiffs against the GUC Trust would be impractical, imprudent and therefore inequitable), and thus the assets of the GUC Trust cannot be used to satisfy such claims.
Excess GUC Trust Distributable Assets means (i) New GM Securities (or Distributable Cash) and Dividend Cash associated
with such New GM Securities (only if and to the extent such New GM Securities (or Distributable Cash) and Dividend Cash (a) are not required for the satisfaction of new Allowed General Unsecured Claims and (b) have not been set aside from
distribution to fund projected liquidation and administrative costs, Dividend Taxes or Taxes on Distribution of the GUC Trust) and (ii) Other Administrative Cash available, if any, for distribution to the holders of GUC Trust Units.
GUC Trust means the Motors Liquidation Company GUC Trust.
GUC Trust Administrator means Wilmington Trust Company, not in its individual capacity but solely in its capacity as trust
administrator and trustee of the GUC Trust.
37
GUC Trust Agreement means the Second Amended and Restated Motors Liquidation Company
GUC Trust Agreement, dated as of July 30, 2015.
GUC Trust Monitor means FTI Consulting, Inc., solely in its capacity as
trust monitor of the GUC Trust.
GUC Trust Units means the units of beneficial interests in the GUC Trust distributed to
holders of Allowed General Unsecured Claims in proportion to the amount of their claims subject to certain rounding rules set forth in the Plan and the GUC Trust Agreement. Each GUC Trust Unit represents the contingent right to receive a pro rata
share of the Excess GUC Trust Distributable Assets.
Ignition Switch Economic Loss Actions means the various actions
(including putative class actions) filed by various plaintiffs against New GM seeking compensatory and other damages for economic losses allegedly resulting from the Ignition Switch Recall, or the underlying condition of the subject vehicles.
Ignition Switch Personal Injury Actions means the various actions (including putative class actions) filed by various plaintiffs
against New GM seeking compensatory and other damages for personal injury and other claims allegedly arising from accidents that occurred as a result of the underlying condition of the vehicles subject to the Ignition Switch Recall.
Ignition Switch Recall means the ignition switch-related recalls initiated by New GM.
Indenture Trustee / Fiscal and Paying Agent Costs means certain costs, fees and expenses payable under the Plan to the indenture
trustees and fiscal and paying agents for the previously outstanding debt of MLC.
Initial Reporting Cash means the proceeds
of approximately $5.7 million from the sale by the GUC Trust of New GM Securities shortly after the Effective Date, expressly authorized by the GUC Trust Agreement for the purposes of funding Reporting Costs.
Investment Income Taxes means federal income taxes incurred in respect of investment income earned by the GUC Trust on
Distributable Cash held, or previously held, by the GUC Trust.
JPMorgan Summary Judgment Motion means the Motion of JPMorgan
Chase Bank, N.A. for Summary Judgment (Docket No. 28) filed by JPMorgan Chase Bank, N.A. on July 1, 2010, seeking a ruling in favor of JPMorgan Chase Bank, N.A. with respect to the perfection of the UCC Collateral.
Judgment means the Bankruptcy Courts Judgment (Docket No. 73) dated March 1, 2013 in respect of the
Cross-Motions for Summary Judgment.
Liquidation Order means the Bankruptcy Courts order dated July 2, 2015
pursuant to which the Bankruptcy Court approved the conversion of the GUC Trusts holdings of New GM Securities into cash.
MDL
Court means, with respect to case number 14-MD-2543 (JMF), the United States District Court for the Southern District of New York.
MDL Proceeding means the actions that have been transferred to and consolidated under the case number 14-MD-2543 (JMF) and are
pending before the MDL Court, including certain Subject Recall-Related Actions.
MLC means Motors Liquidation Company, which
dissolved on December 15, 2011.
Motions to Enforce means the series of motions filed by New GM with the Bankruptcy Court
seeking to enjoin the Subject Recall-Related Actions and to enforce the Sale Order.
MSPA means the Master Sale and Purchase
Agreement dated as of July 10, 2009, by and among Old GM, certain of its debtor subsidiaries and NGMCO, Inc., as amended.
New
GM means General Motors Company, together with its consolidated subsidiaries.
New GM Common Stock means the common
stock of General Motors Company, including with respect to New GM Common Stock that has been set aside from distribution or sold and any Dividend Cash related to such New GM Common Stock.
38
New GM Securities means the New GM Common Stock (including with respect to New GM
Common Stock that has been set aside from distribution or sold, any Dividend Cash related to such New GM Common Stock) and the New GM Warrants.
New GM Series A Warrants means the warrants to acquire shares of New GM Common Stock at an exercise price of $10.00 per share,
expiring July 10, 2016.
New GM Series B Warrants means the warrants to acquire shares of New GM Common Stock at an
exercise price of $18.33 per share, expiring July 10, 2019.
New GM Warrants means the New GM Series A Warrants and the
New GM Series B Warrants.
Order means the Bankruptcy Courts Order on Cross-Motions for Summary Judgment (Docket
No. 72) dated March 1, 2013 in respect of the Cross-Motions for Summary Judgment.
Other Administrative Cash means
the cash proceeds from the sale of any New GM Securities (or appropriation of any Distributable Cash) that have been set aside from distribution to fund the current or projected liquidation and other administrative costs or income tax liabilities of
the GUC Trust, plus any Dividend Cash related to any New GM Common Stock (or Distributable Cash) so sold (or appropriated).
Other
Economic Loss Actions means the various actions (including putative class actions) filed by various plaintiffs against New GM seeking compensatory and other damages for economic losses allegedly resulting from recalls of vehicles initiated by
New GM (other than the Ignition Switch Recall), or the underlying condition of those vehicles.
Other Personal Injury Actions
means the various actions (including putative class actions) filed by various plaintiffs against New GM seeking compensatory and other damages for personal injury and other claims allegedly arising from accidents that occurred as a result of the
underlying condition of the vehicles subject to the recalls initiated by New GM other than the Ignition Switch Recall.
Personal
Injury Actions means the various actions (including putative class actions) filed by various plaintiffs against New GM seeking compensatory and other damages for personal injury and other claims allegedly arising from accidents that occurred
as a result of the underlying condition of the vehicles subject to the recalls initiated by New GM.
Proposed Agreement means
the agreement in principle reached between the GUC Trust and the Avoidance Action Trust regarding the treatment of the Term Loan Avoidance Action Claims, which (to the extent it becomes effective) would result in the relief of the GUC Trusts
obligations to satisfy Term Loan Avoidance Action Claims in exchange for a cash payment to the Avoidance Action Trust of $75 million.
Plan means the Debtors Second Amended Joint Chapter 11 Plan, filed with the Bankruptcy Court on March 18, 2011.
QSF means Qualified Settlement Fund under applicable regulations of the United States Department of Treasury.
Recall-Related Actions means, collectively, the Ignition Switch Economic Loss Actions, the Other Economic Loss Actions and the
Personal Injury Actions.
Reporting Costs means fees, costs and expenses of the GUC Trust directly or indirectly relating to
(i) reports to be prepared and filed by the GUC Trust pursuant to applicable rules, regulations and interpretations of the SEC, (ii) the transfer, registration for transfer and certification of GUC Trust Units, (iii) the application
by the Committee to the Internal Revenue Service for a private letter ruling regarding the tax treatment of the GUC Trust and the holders of Allowed General Unsecured Claims in respect of the distribution of New GM Securities and (iv) certain
legal proceedings relating to the Term Loan Avoidance Action.
Residual Wind-Down Assets means the funds remaining of the
approximately $42.8 million in cash and prepaid expenses transferred by MLC to the GUC Trust on the Dissolution Date to satisfy the Residual Wind-Down Claims and Residual Wind-Down Costs (which amount consisted of approximately $40.0 million in
cash, including approximately $1.4 million for Avoidance Action Defense Costs, and the transferred benefit of approximately $2.8 million in prepaid expenses).
Residual Wind-Down Claims means all disputed administrative expenses, priority tax claims, priority non-tax claims, and secured
claims against the Debtors that were remaining as of the Dissolution Date.
Residual Wind-Down Costs means certain costs, fees
and expenses relating to satisfying and resolving the Residual Wind-Down Claims.
39
Resolved Disputed Claims means previously Disputed General Unsecured Claims that are
subsequently allowed.
Sale Order means the Sale Order and Injunction entered by the Bankruptcy Court on July 5, 2009,
approving the sale of substantially all of the assets of Old GM to New GM pursuant to Section 363(b) of the Bankruptcy Code.
SEC means the Securities and Exchange Commission.
Second Circuit means the United States Court of Appeals for the Second Circuit.
Stare Decisis Order means the decision and order of the Bankruptcy Court dated September 3, 2015, which had the effect
of making the Equitable Mootness Finding set forth in the Threshold Issues Decision and the Threshold Issues Judgment binding on plaintiffs in the Other Economic Loss Actions and Other Personal Injury Actions.
Stay Decision means the Bankruptcy Courts Decision and Order on Request for Stay (Docket No. 13503) dated
October 14, 2015, conditionally granting the Stay Motion.
Subject Recall-Related Actions means the Recall-Related
Actions that concern vehicles designed, manufactured or sold prior to the Closing Date, except for Personal Injury Actions related to accidents that occurred after the Closing Date.
Term Loan means the syndicated loan facility evidenced by that certain Term Loan Agreement, dated as of November 29, 2006,
among General Motors Corporation, Saturn Corporation and JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto from time to time (as amended, restated, supplemented or otherwise revised from time to time).
Term Loan Avoidance Action means the legal action styled as Official Committee of Unsecured Creditors of Motors Liquidation Co. v.
JPMorgan Chase Bank, N.A., et al., Adv. Pro. No. 09-00504 (Bankr. S.D.N.Y. July 31, 2009).
Term Loan Avoidance Action
Claims means the Allowed General Unsecured Claims that arise in the amount of any recovery of proceeds if the Avoidance Action Trust Administrator is successful in its prosecution of the Term Loan Avoidance Action. For the avoidance of doubt,
as used in this Form 10-Q, the amounts of Disputed General Unsecured Claims do not include any potential Term Loan Avoidance Action Claims.
Threshold Issues Decision means the Bankruptcy Courts Decision on Motion to Enforce Sale Order (Docket
No. 13109) dated April 15, 2015.
Threshold Issues Judgment means the Bankruptcy Courts Judgment
(Docket No. 13177) dated June 1, 2015 with respect to the Threshold Issues Decision.
Trust Beneficiaries means the
beneficiaries of the GUC Trust, who are future holders and, to the extent their liquidating distributions have not yet been paid to them, current holders of Allowed General Unsecured Claims and future and current holders of GUC Trust Units.
UCC-3 means the UCC-3 termination statement filed prior to the date of the Debtors bankruptcy filings which related to
certain collateral owned by the Debtors on which the Administrative Agent asserted a lien in respect of the Term Loan.
UCC
Collateral means the collateral owned by the Debtors on the date of their bankruptcy filings, which collateral was the subject of the UCC-3.
Wind-Down Costs means certain fees and expenses incurred by the GUC Trust, including fees of the GUC Trust Administrator and the
GUC Trust Monitor and the fees and expenses for other professionals retained by the GUC Trust, other than Reporting Costs.
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk. |
Disclosure under this item is not required, pursuant to the no-action letter of the Securities and Exchange Commission to the GUC Trust dated
May 23, 2012.
Item 4. |
Disclosure Controls and Procedures. |
During the fiscal period
covered by this report, the management of the GUC Trust, with the participation of the Vice President of the GUC Trust Administrator, completed an evaluation of the effectiveness of the design and operation of the GUC Trusts disclosure
controls and procedures (as defined in Rule 13a-15(e) of the Securities and Exchange Act of 1934, as amended). Based on
40
this evaluation, the GUC Trusts management, including that Vice President of the GUC Trust Administrator, has concluded that, as of the end of the fiscal period covered by this report, the
GUC Trusts disclosure controls and procedures were effective. There were no material changes in the GUC Trusts internal control over financial reporting during the fiscal period covered by this report.
PART IIOTHER INFORMATION
Item 1. |
Legal Proceedings. |
Term Loan Avoidance Action.
On July 31, 2009, the Committee, on behalf of the Debtors, commenced the Term Loan Avoidance Action (Official Committee of Unsecured
Creditors of Motors Liquidation Co. v. JPMorgan Chase Bank, N.A. et al., Adv. Pro. No. 09-00504 (Bankr. S.D.N.Y. July 31, 2009)). Among other things, the Term Loan Avoidance Action seeks the return of approximately $1.5 billion that
had been transferred to a consortium of prepetition lenders pursuant to the terms of the order approving the DIP Credit Agreement on the theory that the pre-petition filing of a particular UCC-3 termination statement, or the UCC-3, had the effect of
rendering such lenders previously perfected security interest in certain assets of the Debtors, or the UCC Collateral, unperfected on the date of the Debtors bankruptcy filings.
On July 1, 2010, the Committee filed a Motion of Official Committee of Unsecured Creditors for Partial Summary Judgment (Docket
No. 24), or the Committee Summary Judgment Motion, seeking a ruling in favor of the Committee with respect to the perfection of the lenders security interest in the UCC Collateral. Also on July 1, 2010, JPMorgan Chase Bank, N.A.
filed a Motion for Summary Judgment of Defendant JPMorgan Chase Bank, N.A. (Docket No. 28), or the JPMorgan Summary Judgment Motion (and, together with the Committee Summary Judgment Motion, the Cross-Motions for Summary Judgment),
seeking a ruling in favor of JPMorgan Chase Bank, N.A., with respect to the perfection of the lenders security interest in the UCC Collateral. On the Dissolution Date, while the Cross-Motions for Summary Judgment were still pending, the right
to prosecute the Term Loan Avoidance Action was transferred to the Avoidance Action Trust. To the extent that the Avoidance Action Trust Administrator is successful in obtaining and collecting a judgment against the defendant(s) therein, Term Loan
Avoidance Action Claims will arise in the amount actually collected from the defendant(s), and in the name of such defendant(s).
The
Avoidance Action Trust was established under the Plan and is independent of the GUC Trust. The proper beneficiaries of the proceeds of the Term Loan Avoidance Action, if any, is a matter that is currently in dispute, with both the DIP Lenders and
the Committee, on behalf of the holders of Allowed General Unsecured Claims, claiming sole rights to such proceeds. On June 6, 2011, the Committee commenced an adversary proceeding seeking a declaratory judgment that (i) the DIP Lenders
are not entitled to any proceeds of the Term Loan Avoidance Action and have no interests in the Avoidance Action Trust, and (ii) the holders of Allowed General Unsecured Claims have the exclusive right to receive any and all proceeds of the
Term Loan Avoidance Action, and are the exclusive beneficiaries of the Avoidance Action Trust. On December 2, 2011, the Bankruptcy Court entered an order in favor of the Committee, denying the DIP Lenders motions to dismiss and for
summary judgment. On December 16, 2011, the DIP Lenders appealed this and other related rulings and decisions of the Bankruptcy Court. On July 3, 2012, the district court for the Southern District of New York vacated the Bankruptcy
Courts judgment and remanded the case to the Bankruptcy Court, with instructions for the Bankruptcy Court judge to dismiss the Committees complaint without prejudice for want of subject matter jurisdiction.
On March 1, 2013, the Bankruptcy Court rendered a Decision on Cross-Motions for Summary Judgment (Docket No. 71), holding
that JPMorgan Chase Bank, N.A., or the Administrative Agent, had not authorized the filing of the UCC-3, and thus the lenders security interest in the UCC Collateral remained properly perfected on the date of the Debtors bankruptcy
filings. The Bankruptcy Court subsequently entered an Order on Cross-Motions for Summary Judgment (Docket No. 72), or the Order, and Judgment (Docket No. 73) or the Judgment, which distilled the Decision on Cross-Motions
for Summary Judgment into an order denying the Committee Summary Judgment Motion and granting the JPMorgan Summary Judgment Motion. On March 7, 2013, the Avoidance Action Trust appealed the Judgment and Order, which appeal was heard
directly by the Second Circuit.
On January 21, 2015, the Second Circuit reversed the Bankruptcy Courts grant of summary
judgment for the Administrative Agent, holding that the Administrative Agent had authorized the filing of the UCC-3 and thereby extinguished the lenders perfected security interest in the UCC Collateral. The Administrative Agent subsequently
filed a petition for rehearing en banc, which petition was denied by the Second Circuit. On April 20, 2015, the Second Circuit issued a mandate instructing the Bankruptcy Court to enter partial summary judgment for the Committee, which judgment
was entered by the Bankruptcy Court on June 12, 2015. Pursuant to a scheduling order entered by the Bankruptcy Court on May 19, 2015, the Avoidance Action Trust filed an amended complaint against the defendants to the Term Loan Avoidance
Action on May 20, 2015. On August 17, 2015, the Bankruptcy Court entered an additional scheduling order pursuant to which the defendants deadline to answer, move to dismiss or otherwise respond to the amended complaint was scheduled
for November 16, 2015, fact discovery is required to be completed by July 31, 2016, expert discovery is required to be completed by October 31, 2016, and motions for summary judgment, or, if required, letter requests for dispositive
motions, are required to be filed by November 15, 2016. Beginning on November 16, 2015, certain defendants filed motions seeking to dismiss the amended complaint or to obtain a judgment on the pleadings. No hearing date has been set with
respect to such motions.
41
As described above in Note 2 (Plan of Liquidation) to the financial statements, the
successful prosecution of, and recovery under, the Term Loan Avoidance Action would result in the incurrence of additional Term Loan Avoidance Action Claims against the GUC Trust, the holders of which claims would be entitled to receive a
distribution of Distributable Cash (including the related Dividend Cash) from the GUC Trust. It is not known, however, whether holders of Allowed General Unsecured Claims would benefit from any cash recovered under the Term Loan Avoidance Action.
Moreover, beneficial interests in the Avoidance Action Trust (if any) remain with holders of Allowed General Unsecured Claims, rather than beneficiaries of GUC Trust Units. As such, a holder of a GUC Trust Unit that does not hold a corresponding
Allowed General Unsecured Claim could potentially have its recovery diluted through the incurrence of Term Loan Avoidance Action Claims by the GUC Trust, without receiving the benefit of any cash recovered pursuant to the Term Loan Avoidance Action.
On January 13, 2016, the GUC Trust announced that it had reached an agreement in principle, or the Proposed Agreement, with the
Avoidance Action Trust regarding the treatment of the potential Term Loan Avoidance Action Claims, which Proposed Agreement (to the extent it becomes effective) would have the effect of limiting the potential liability of the GUC Trust associated
with the Term Loan Avoidance Action Claims to $75 million (exclusive of approximately $55,000 of Term Loan Avoidance Action Claims that were allowed in the quarter ended December 31, 2015 as described in Note 2). The terms of the Proposed
Agreement, all of which are subject to the caveats set forth below, are as follows:
|
|
|
The GUC Trust shall pay $75 million in cash to the Avoidance Action Trust; |
|
|
|
The GUC Trust shall be relieved of its obligations to satisfy any Term Loan Avoidance Action Claims (exclusive of approximately $55,000 of Term Loan Avoidance Action Claims that were allowed in the quarter ended
December 31, 2015 as described in Note 2); and |
|
|
|
The Avoidance Action Trust shall take on the GUC Trusts former obligation to satisfy Term Loan Avoidance Action Claims via a set-off from any amount disgorged by a defendant to the Term Loan Avoidance Action
(whether pursuant to a judgment or settlement). |
The Proposed Agreement has been approved by the trust monitors of the GUC
Trust and the Avoidance Action Trust, but is subject to, and will not be binding until, the execution of definitive documentation acceptable to the parties thereto and other conditions precedent, including the approval of the Bankruptcy Court. As of
the date of this Form 10-Q, the GUC Trust and the Avoidance Action Trust continue to work towards definitive documentation and resolution of certain conditions precedent with respect to the Proposed Agreement. Whether the Proposed Agreement will, at
any point, become a binding agreement on the terms set forth above, or at all, is uncertain and subject to numerous risks. Accordingly, holders of GUC Trust Units should carefully consider such uncertainty before making any decisions with respect to
such units.
General Motors Product Recalls.
In its annual report on Form 10-K filed February 3, 2016, New GM disclosed that, since the beginning of 2014, New GM had recalled
approximately 2.6 million vehicles to repair ignition switches or to fix ignition lock cylinders, or the Ignition Switch Recall, and had recalled an additional 33.8 million vehicles to address certain electrical and other safety concerns,
including approximately 12.1 million vehicles to rework or replace ignition keys. New GM does not consider any of these 12.1 million vehicles to be a part of the Ignition Switch Recall.
Many of the vehicles affected by the foregoing recalls were manufactured or sold prior to July 10, 2009, or the Closing Date, the date on
which the sale of substantially all of the assets of Old GM pursuant to the MSPA was completed.
In its annual report on Form 10-K filed
February 3, 2016, New GM also disclosed that, as of January 27, 2016, 100 putative class actions have been filed against New GM in various federal and state courts seeking compensatory and other damages for economic losses allegedly
resulting from one or more of the recalls announced in 2014 and/or the underlying condition of vehicles covered by those recalls. Certain of these 100 cases, or the Ignition Switch Economic Loss Actions, concern the Ignition Switch Recall, certain
other cases, or the Other Economic Loss Actions, concern recalls other than the Ignition Switch Recall, and yet others concern both the Ignition Switch Recall and one or more other recalls (such actions are described herein interchangeably as
Ignition Switch Economic Loss Actions or Other Economic Loss Actions). In addition, New GM disclosed that, as of January 27, 2016, 235 actions have been filed against New GM in various federal and state courts seeking compensatory and other
damages for personal injury and other claims allegedly arising from accidents that occurred as a result of the underlying condition of the vehicles subject to the recalls initiated by New GM. Certain of these 235 cases, or the Ignition Switch
Personal Injury Actions, concern the Ignition Switch Recall, certain other cases, or the Other Personal Injury Actions, concern recalls other than the Ignition Switch Recall, and yet others concern both the Ignition Switch Recall and one or more
other recalls (such actions are described herein interchangeably as Ignition Switch Personal Injury Actions or Other Personal Injury Actions).
Since June 2014, 262 Recall-Related Actions have been transferred to the United States District Court of the Southern District of New York, or
the MDL Court, and have been consolidated into a single case, case number 14-MD-2543 (JMF), or the MDL Proceeding.
42
Concurrently with the proceedings before the MDL Court, New GM has taken steps in the Bankruptcy
Court to enjoin the Subject Recall-Related Actions. In that respect, beginning on April 21, 2014, New GM filed a series of motions with the Bankruptcy Court seeking to enjoin the Subject Recall-Related Actions and to enforce the Sale Order and
Injunction entered on July 5, 2009, or the Sale Order (under which all product liability and property damage claims arising from accidents or incidents prior to the Closing Date were to remain with Old GM as general unsecured claims), or the
Motions to Enforce.
Beginning on May 16, 2014, the Bankruptcy Court entered a series of scheduling orders which identified a number
of threshold issues to be resolved by the Bankruptcy Court, including (i) whether plaintiffs procedural due process rights were violated in connection with the 363 Transaction, (ii) if such due process rights were
violated, what is the appropriate remedy, (iii) whether any or all of the claims asserted in the Subject Recall-Related Actions are claims against Old GM and/or the GUC Trust, and (iv) whether any such claims against Old GM and/or the GUC
Trust should be dismissed as equitably moot. The GUC Trust appeared as a party in interest with respect to New GMs Motions to Enforce and filed briefs in opposition thereto, asserting that none of the claims of the plaintiffs in the Subject
Recall-Related Actions may be properly asserted against Old GM or the GUC Trust.
On April 15, 2015, the Bankruptcy Court rendered a
decision, or the Threshold Issues Decision, on the threshold issues holding (among other things) that the plaintiffs in the Ignition Switch Economic Loss Actions and the Ignition Switch Personal Injury Actions may seek authorization to file late
claims in the bankruptcy cases of Old GM, but that any such claims as against the GUC Trust are equitably moot (that is, fashioning relief for the plaintiffs against the GUC Trust would be impractical, imprudent and therefore
inequitable), and thus the assets of the GUC Trust cannot be used to satisfy such claims, or the Equitable Mootness Finding.
On
June 1, 2015, the Bankruptcy Court issued a judgment, or the Threshold Issues Judgment, which clarifies the terms of the Threshold Issues Decision and distills the Bankruptcy Courts holdings into a binding order. The Threshold Issues
Judgment provides, in pertinent part, the following:
(i) The plaintiffs in the Ignition Switch Economic Loss Actions suffered a due
process violation with respect to the Sale Order, whereas the plaintiffs in the Ignition Switch Personal Injury Actions did not suffer a due process violation with respect to the Sale Order;
(ii) As a result of the due process violation, the provisions of the Sale Order which purport to shield New GM from any liability associated
with its independent post-Sale actions can be modified, and the plaintiffs in the Ignition Switch Economic Loss Actions may proceed against New GM with respect to its independent post-Sale actions;
(iii) Any claims asserted in the Ignition Switch Economic Loss Actions and the Ignition Switch Personal Injury Actions that relate to actions
of Old GM are enjoined from being pursued against New GM on successor liability grounds;
(iv) Given the Equitable Mootness Finding, the
assets of the GUC Trust cannot be utilized to satisfy any claims that may be filed by plaintiffs in the Ignition Switch Economic Loss Actions and Ignition Switch Personal Injury Actions after the date of entry of the Threshold Issues Judgment; and
(v) Pursuant to section 502(j) of the Bankruptcy Code, assets of the GUC Trust may be used to satisfy previously allowed or disallowed
claims that are reconsidered for cause. Hence, any person who holds a previously allowed or disallowed claim may seek to have that claim reconsidered by the Bankruptcy Court, and in the event that any such claimant prevails in an application for
reconsideration, the resulting additional allowed claims could dilute the recoveries of holders of GUC Trust Units.
The Equitable
Mootness Finding became binding on plaintiffs in the Other Economic Loss Actions and Other Personal Injury Actions pursuant to a decision and order of the Bankruptcy Court dated September 3, 2015. In addition, following entry of the Threshold
Issues Judgment, certain plaintiffs filed an amended complaint in the MDL Proceeding on June 12, 2015.
Certain plaintiffs in the
Recall-Related Actions are appealing the Threshold Issues Decision and Threshold Issues Judgment, and New GM and the GUC Trust have each filed cross-appeals with respect to the Threshold Issues Decision and Threshold Issues Judgment. On
September 22, 2015, the Second Circuit entered an order granting a direct appeal of the Threshold Issues Decision and Threshold Issues Judgment to the Second Circuit. On November 2, 2015, the Second Circuit entered an order setting an
expedited briefing schedule with respect to the appeal. Pursuant to the scheduling orders entered by the Second Circuit, briefing commenced on November 16, 2015 and is scheduled to conclude on February 22, 2016, and oral argument shall be
heard on March 15, 2016. In addition, on December 4, 2015, the Bankruptcy Court issued a judgment regarding certain issues left unresolved by the April 15, 2015 decision including the extent to which punitive damages could be asserted
against New GM based on claims involving vehicles manufactured by Old GM. Various groups of plaintiffs have appealed that decision to the MDL Court.
If the Bankruptcy Courts Equitable Mootness Finding is not overturned on appeal, the claims of the plaintiffs in the Recall-Related
Actions (even if allowed by the Bankruptcy Court) may not dilute the recoveries of holders of GUC Trust Units. However, in the event that the decision is overturned with respect to the Equitable Mootness Finding, it is possible that those plaintiffs
could seek to assert claims against the GUC Trust, which claims (if allowed) could dilute the recoveries of holders of GUC Trust Units.
43
Other Matters
In addition, the GUC Trust has been named a defendant in two actions by individual plaintiffs with separate personal claims against Old GM. One
of these claimants is seeking, in light of the recalls by New GM, to overturn the terms of a previous settlement with Old GM for personal injuries/wrongful deaths that occurred prior to the Closing Date. Although the GUC Trust and New GM have
defeated a recent effort by that claimant to obtain relief in the Bankruptcy Court from her settlement, the claimant has appealed that ruling, and briefing is scheduled to be completed on March 14, 2016. Neither plaintiff has asserted a claim
for specified monetary damages, but the GUC Trust intends to vigorously defend its position against such claimants.
New GM Securities
Class Action
On March 21, 2014, a putative class action was initiated against New GM on behalf of all persons and entities that
purchased or otherwise acquired New GM Common Stock during the period from November 17, 2010 through July 24, 2014, inclusive, and suffered damages. In November 2015, New GM reached a proposed settlement (subject to approval by the court
in which the action is pending) of the class action. The proposed settlement amount is an aggregate of $300 million, plus earned interest, and, after deducting certain expenses, including attorneys fees and costs and taxes on the earned
interest, the settlement amount will be distributed in cash (pro rata by the relative size of their claims) to all members of the settlement class who submit a valid and timely claim form. The GUC Trust intends to file a proof of claim with the
court by the deadline of April 27, 2016. However, the amount of the GUC Trusts potential recovery is not estimable at this time.
Other than the foregoing, during the quarter ended December 31, 2015, no material changes occurred with respect to any legal proceedings
relating to the GUC Trust, as compared to the disclosures included in the GUC Trusts prior filings with the Securities and Exchange Commission.
No assurance may be given that claims
relating to accidents or other incidents, including recalls involving General Motors vehicles manufactured or sold prior to July 10, 2009, and/or settlements previously reached with plaintiffs asserting such claims, will not adversely affect
the GUC Trust, its assets or the Plan.
In its annual report on Form 10-K filed February 3, 2016, New GM disclosed that,
since the beginning of 2014, New GM had recalled approximately 2.6 million vehicles to repair ignition switches or to fix ignition lock cylinders, or the Ignition Switch Recall, and had recalled an additional 33.8 million vehicles to
address certain electrical and other safety concerns, including approximately 12.1 million vehicles to rework or replace ignition keys. New GM does not consider any of these 12.1 million vehicles to be a part of the Ignition Switch Recall.
Many of the vehicles affected by the foregoing recalls were manufactured or sold prior to July 10, 2009, or the Closing Date, the
date on which the sale of substantially all of the assets of Old GM pursuant to the MSPA was completed.
In its annual report on Form 10-K
filed February 3, 2016, New GM also disclosed that, as of January 27, 2016, 100 putative class actions have been filed against New GM in various federal and state courts seeking compensatory and other damages for economic losses allegedly
resulting from one or more of the recalls announced in 2014 and/or the underlying condition of vehicles covered by those recalls. Certain of these 100 cases, or the Ignition Switch Economic Loss Actions, concern the Ignition Switch Recall, certain
other cases, or the Other Economic Loss Actions, concern recalls other than the Ignition Switch Recall, and yet others concern both the Ignition Switch Recall and one or more other recalls (such actions are described herein interchangeably as
Ignition Switch Economic Loss Actions or Other Economic Loss Actions). In addition, New GM disclosed that, as of January 27, 2016, 235 actions have been filed against New GM in various federal and state courts seeking compensatory and other
damages for personal injury and other claims allegedly arising from accidents that occurred as a result of the underlying condition of the vehicles subject to the recalls initiated by New GM. Certain of these 235 cases, or the Ignition Switch
Personal Injury Actions, concern the Ignition Switch Recall, certain other cases, or the Other Personal Injury Actions, concern recalls other than the Ignition Switch Recall, and yet others concern both the Ignition Switch Recall and one or more
other recalls (such actions are described herein interchangeably as Ignition Switch Personal Injury Actions or Other Personal Injury Actions).
Since June 2014, 262 Recall-Related Actions have been transferred to the United States District Court of the Southern District of New York, or
the MDL Court, and have been consolidated into a single case, case number 14-MD-2543 (JMF), or the MDL Proceeding.
Concurrently with the
proceedings before the MDL Court, New GM has taken steps in the Bankruptcy Court to enjoin claims in the Recall-Related Actions that concern vehicles designed, manufactured or sold prior to the Closing Date, except for Personal Injury Actions
related to accidents that occurred after the Closing Date (or collectively, the Subject Recall-Related Actions). In that respect, beginning on April 21, 2014, New GM filed a series of motions with the Bankruptcy Court seeking to enjoin the
Subject Recall- Related Actions and to enforce the Sale Order and Injunction entered on July 5, 2009, or the Sale Order (under which all product liability and property damage claims arising from accidents or incidents prior to the Closing Date
were to remain with Old GM as general unsecured claims), or the Motions to Enforce.
44
Beginning on May 16, 2014, the Bankruptcy Court entered a series of scheduling orders which
identified a number of threshold issues to be resolved by the Bankruptcy Court, including (i) whether plaintiffs procedural due process rights were violated in connection with the 363 Transaction, (ii) if such due process
rights were violated, what is the appropriate remedy, (iii) whether any or all of the claims asserted in the Subject Recall-Related Actions are claims against Old GM and/or the GUC Trust, and (iv) whether any such claims against Old GM
and/or the GUC Trust should be dismissed as equitably moot. The GUC Trust appeared as a party in interest with respect to New GMs Motions to Enforce and filed briefs in opposition thereto, asserting that none of the claims of the plaintiffs in
the Subject Recall-Related Actions may be properly asserted against Old GM or the GUC Trust.
On April 15, 2015, the Bankruptcy Court
rendered a decision, or the Threshold Issues Decision, on the threshold issues holding (among other things) that the plaintiffs in the Ignition Switch Economic Loss Actions and the Ignition Switch Personal Injury Actions may seek authorization to
file late claims in the bankruptcy cases of Old GM, but that any such claims as against the GUC Trust are equitably moot (that is, fashioning relief for the plaintiffs against the GUC Trust would be impractical, imprudent and
therefore inequitable), and thus the assets of the GUC Trust cannot be used to satisfy such claims, or the Equitable Mootness Finding.
On June 1, 2015, the Bankruptcy Court issued a judgment, or the Threshold Issues Judgment, which clarifies the terms of the Threshold
Issues Decision and distills the Bankruptcy Courts holdings into a binding order. The Threshold Issues Judgment provides, in pertinent part, the following:
(i) The plaintiffs in the Ignition Switch Economic Loss Actions suffered a due process violation with respect to the Sale Order, whereas the
plaintiffs in the Ignition Switch Personal Injury Actions did not suffer a due process violation with respect to the Sale Order;
(ii) As a
result of the due process violation, the provisions of the Sale Order which purport to shield New GM from any liability associated with its independent post-Sale conduct can be modified, and the plaintiffs in the Ignition Switch Economic Loss
Actions may proceed against New GM with respect to its independent post-Sale conduct;
(iii) Any claims asserted in the Ignition Switch
Economic Loss Actions and the Ignition Switch Personal Injury Actions that relate to the conduct of Old GM are enjoined from being pursued against New GM on successor liability grounds;
(iv) Given the Equitable Mootness Finding, the assets of the GUC Trust cannot be utilized to satisfy any claims that may be filed by the
plaintiffs in the Ignition Switch Economic Loss Actions and Ignition Switch Personal Injury Actions after the date of entry of the Threshold Issues Judgment; and
(v) Pursuant to section 502(j) of the Bankruptcy Code, assets of the GUC Trust may be used to satisfy previously allowed or disallowed claims
that are reconsidered for cause. Hence, any person who holds a previously allowed or disallowed claim may seek to have that claim reconsidered by the Bankruptcy Court, and in the event that any such claimant prevails in an application for
reconsideration, the resulting additional allowed claims could dilute the recoveries of holders of GUC Trust Units.
The Equitable
Mootness Finding became binding on plaintiffs in the Other Economic Loss Actions and Other Personal Injury Actions pursuant to a decision and order of the Bankruptcy Court dated September 3, 2015. In addition, following entry of the Threshold
Issues Judgment, certain plaintiffs filed an amended complaint in the MDL Proceeding on June 12, 2015. New GM and those plaintiffs have submitted briefs and argued before the Bankruptcy Court as to whether the claims asserted in the amended
complaint concerning vehicles designed, manufactured or sold prior to the Closing Date arise from the independent conduct of New GM. The Bankruptcy Court has not yet issued a decision.
Certain plaintiffs in the Recall-Related Actions are appealing the Threshold Issues Decision and Threshold Issues Judgment, and New GM and the
GUC Trust have each filed cross-appeals with respect to the Threshold Issues Decision and Threshold Issues Judgment. On September 22, 2015, the Second Circuit entered an order granting a direct appeal of the Threshold Issues Decision and
Threshold Issues Judgment to the Second Circuit. On November 2, 2015, the Second Circuit entered an order setting an expedited briefing schedule with respect to the appeal. Pursuant to the scheduling orders entered by the Second Circuit,
briefing commenced on November 16, 2015 and is scheduled to conclude on February 22, 2016, and oral argument shall be heard on March 15, 2016. In addition, on December 4, 2015, the Bankruptcy Court issued a judgment regarding
certain issues left unresolved by the April 15, 2015 decision including the extent to which punitive damages could be asserted against New GM based on claims involving vehicles manufactured by Old GM. Various groups of plaintiffs have appealed
that decision to the MDL Court.
If the Bankruptcy Courts Equitable Mootness Finding is not overturned on appeal, the claims of the
plaintiffs in the Recall Related Actions (even if allowed by the Bankruptcy Court) may not dilute the recoveries of holders of GUC Trust Units. However, in the event that the decision is overturned with respect to the Equitable Mootness Finding, it
is possible that those plaintiffs could seek to assert claims against the GUC Trust, which claims (if allowed) could dilute the recoveries of holders of GUC Trust Units.
45
In addition, the GUC Trust has been named a defendant in two actions by individual plaintiffs
with separate personal claims against Old GM. One of these claimants is seeking, in light of the recalls by New GM, to overturn the terms of a previous settlement with Old GM for personal injuries/wrongful deaths that occurred prior to the Closing
Date. Although the GUC Trust and New GM have defeated a recent effort by that claimant to obtain relief in the Bankruptcy Court from her settlement, the claimant has filed a notice of appeal with respect to that ruling, which appeal remains pending.
Neither plaintiff has asserted a claim for specified monetary damages, but the GUC Trust intends to vigorously defend its position against such claimants.
Accordingly, no assurance may be given that personal injury, property damage and other claims relating to New GMs recalls involving
General Motors vehicles manufactured or sold prior to the Closing Date and/or settlements previously reached with certain plaintiffs who asserted personal injury, property damage or other claims due to incidents or accidents that occurred prior to
the Closing Date, will not adversely affect the GUC Trust, its assets or the Plan.
The GUC Trust Units constitute contingent rights
to receive the Excess GUC Trust Distributable Assets, including New GM Securities, the value of which will depend on the business, assets, operations and prospects of New GM, regarding which the GUC Trust, the GUC Trust Administrator and the GUC
Trust Monitor have no independent knowledge or control.
By holding beneficial interests in GUC Trust Units, each GUC Trust Unit
beneficiary has a contingent right to receive Excess GUC Trust Distributable Assets. As a result of the liquidation of all the GUC Trusts holdings of New GM Securities during the quarter ended September 30, 2015, Excess GUC Trust
Distributable Assets consist entirely of cash and no longer include New GM Securities. As a result, the value of Excess GUC Trust Distributable Assets is no longer contingent on the value of the New GM Securities previously held by the GUC Trust.
Other than the foregoing, there have been no material changes regarding risk factors from what was previously included in the Annual
Report on Form 10-K filed with the Securities and Exchange Commission on May 22, 2015.
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds. |
Disclosure under this item is not required, pursuant to the no-action letter of the Securities and Exchange Commission to the GUC Trust dated
May 23, 2012.
Item 3. |
Defaults Upon Senior Securities. |
Disclosure under this item
is not required, pursuant to the no-action letter of the Securities and Exchange Commission to the GUC Trust dated May 23, 2012.
Item 4. |
Mine Safety Disclosures. |
Not applicable.
Item 5. |
Other Information. |
None.
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Exhibit
No. |
|
Description |
|
|
31 |
|
Section 302 Certification. |
|
|
32 |
|
Section 906 Certification. |
|
|
101 |
|
The following financial statements and notes thereto from the quarterly report on Form 10-Q of Motors Liquidation Company GUC Trust, for the quarter ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting
Language): (i) Condensed Statements of Net Assets in Liquidation (Liquidation Basis) as of December 31, 2015 and March 31, 2015, (ii) Condensed Statements of Changes in Net Assets in Liquidation (Liquidation Basis) for the three and
nine months ended December 31, 2015 and 2014, (iii) Condensed Statements of Cash Flows (Liquidation Basis) for the nine months ended December 31, 2015 and 2014 and (iv) Notes to Condensed Financial Statements. |
46
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: February 12, 2016
|
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MOTORS LIQUIDATION COMPANY GUC TRUST |
|
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By: |
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Wilmington Trust Company, not in its individual capacity, but solely in its capacity as trust administrator and trustee of the Motors Liquidation Company GUC Trust |
|
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By: |
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/s/ David A. Vanaskey |
Name: |
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David A. Vanaskey |
Title: |
|
Vice President of Wilmington Trust Company |
EXHIBIT INDEX
|
|
|
Exhibit
No. |
|
Description |
|
|
31 |
|
Section 302 Certification. |
|
|
32 |
|
Section 906 Certification. |
|
|
101 |
|
The following financial statements and notes thereto from the quarterly report on Form 10-Q of Motors Liquidation Company GUC Trust, for the quarter ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting
Language): (i) Condensed Statements of Net Assets in Liquidation (Liquidation Basis) as of December 31, 2015 and March 31, 2015, (ii) Condensed Statements of Changes in Net Assets in Liquidation (Liquidation Basis) for the three and
nine months ended December 31, 2015 and 2014, (iii) Condensed Statements of Cash Flows (Liquidation Basis) for the nine months ended December 31, 2015 and 2014 and (iv) Notes to Condensed Financial Statements. |
Exhibit 31
CERTIFICATION PURSUANT TO
RULE 13a-14(a) and 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED
I, David A.
Vanaskey, in my capacity as Vice President of Wilmington Trust Company, in its capacity as trust administrator and trustee of Motors Liquidation Company GUC Trust (the Trust), certify that:
|
1. |
I have reviewed this quarterly report on Form 10-Q of the Trust; |
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report; |
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the net assets and changes in net assets under the liquidation basis of
accounting of the Trust as of, and for, the periods presented in this report; |
|
4. |
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Trust and have: |
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Trust, including its
consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
c. |
Evaluated the effectiveness of the Trusts disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and |
|
d. |
Disclosed in this report any change in the Trusts internal control over financial reporting that occurred during the Trusts most recent fiscal quarter (the Trusts fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably likely to materially affect, the Trusts internal control over financial reporting ; and |
|
5. |
I have disclosed, based on my most recent evaluation, to the Trusts auditors: |
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Trusts ability to record, process,
summarize and report financial information; and |
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Trusts internal control over financial reporting. |
Date: February 12, 2016
|
|
|
By: |
|
/s/ David A. Vanaskey |
Name: |
|
David A. Vanaskey |
Title: |
|
Vice President of Wilmington Trust Company |
Exhibit 32
Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with this quarterly report on Form 10-Q (the Report) of Motors Liquidation Company GUC Trust (the
Trust), as filed with the Securities and Exchange Commission on the date hereof, David A. Vanaskey, as Vice President of Wilmington Trust Company, in its capacity as trust administrator and trustee of the Trust, does hereby certify as of
the date indicated below, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Trust. |
Date: February 12, 2016
|
|
|
By: |
|
/s/ David A. Vanaskey |
Name: |
|
David A. Vanaskey |
Title: |
|
Vice President of Wilmington Trust Company |
v3.3.1.900
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v3.3.1.900
Condensed Statements of Net Assets in Liquidation (Liquidation Basis) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Mar. 31, 2015 |
LIABILITIES |
|
|
Reserves for Expected Costs of Liquidation (Note 6) |
$ 27,593
|
$ 31,278
|
Liquidation Basis of Accounting [Member] |
|
|
ASSETS |
|
|
Cash and Cash Equivalents (Note 3) |
24,444
|
37,483
|
Marketable Securities (Note 3) |
643,173
|
30,944
|
Accrued Dividends on Holdings of New GM Common Stock (Note 3) |
|
26,524
|
Holdings of New GM Securities |
|
917,977
|
Other Assets and Deposits |
1,890
|
1,038
|
TOTAL ASSETS |
669,507
|
1,013,966
|
LIABILITIES |
|
|
Accounts Payable and Other Liabilities |
4,289
|
4,832
|
Liquidating Distributions Payable (Note 4) |
4,612
|
7,714
|
Reserves for Residual Wind-Down Claims (Note 6) |
19,909
|
25,406
|
TOTAL LIABILITIES |
56,403
|
69,230
|
NET ASSETS IN LIQUIDATION (Note 3) |
$ 613,104
|
$ 944,736
|
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v3.3.1.900
Condensed Statements of Changes in Net Assets in Liquidation (Liquidation Basis) - USD ($) $ in Thousands |
3 Months Ended |
9 Months Ended |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Increase (decrease) in net assets in liquidation: |
|
|
|
|
Net reductions in (additions to) reserves for Expected Costs of Liquidation (Note 6) |
$ 2,474
|
$ (3,200)
|
$ (7,824)
|
$ (7,335)
|
Net change in fair value of holdings of New GM Securities |
|
83,540
|
(175,229)
|
(29,371)
|
Liquidation Basis of Accounting [Member] |
|
|
|
|
Net Assets in Liquidation, beginning of period |
613,298
|
750,038
|
944,736
|
1,064,494
|
Increase (decrease) in net assets in liquidation: |
|
|
|
|
Liquidating distributions (Note 4) |
(2,717)
|
2,090
|
(127,137)
|
(208,110)
|
Dividends and interest income (net reversal) (Note 3) |
6
|
3,444
|
(21,485)
|
16,234
|
Other income |
43
|
|
43
|
|
Net (decrease) increase in net assets in liquidation |
(194)
|
85,874
|
(331,632)
|
(228,582)
|
Net Assets in Liquidation, end of period |
$ 613,104
|
$ 835,912
|
$ 613,104
|
$ 835,912
|
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v3.3.1.900
Condensed Statements of Cash Flows (Liquidation Basis) - Liquidation Basis of Accounting [Member] - USD ($) $ in Thousands |
9 Months Ended |
Dec. 31, 2015 |
Dec. 31, 2014 |
Cash flows from (used in) operating activities |
|
|
Cash receipts from dividends and interest |
$ 4,386
|
$ 12,678
|
Cash paid for professional fees, governance costs and other administrative costs |
(11,039)
|
(9,449)
|
Cash paid for Residual Wind-Down Claims |
(6,022)
|
(2,011)
|
Cash receipts for refunds, including amounts due others |
204
|
379
|
Cash paid for distributions |
(130,036)
|
(3,528)
|
Net cash flows used in operating activities |
(142,507)
|
(1,931)
|
Cash flows from (used in) investing activities |
|
|
Cash used to purchase marketable securities |
(1,316,196)
|
(66,302)
|
Cash from maturities and sales of marketable securities |
703,962
|
78,597
|
Net cash flows (used in) from investing activities |
(612,234)
|
12,295
|
Cash flows from financing activities |
|
|
Cash from liquidation of New GM Securities and sale of New GM Securities for distribution |
741,702
|
212
|
Net cash flows from financing activities |
741,702
|
212
|
Net (decrease) increase in cash and cash equivalents |
(13,039)
|
10,576
|
Cash and cash equivalents, beginning of period |
37,483
|
14,932
|
Cash and cash equivalents, end of period |
$ 24,444
|
$ 25,508
|
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v3.3.1.900
Description of Trust and Reporting Policies
|
9 Months Ended |
Dec. 31, 2015 |
Accounting Policies [Abstract] |
|
Description of Trust and Reporting Policies |
|
1. |
Description of Trust and Reporting
Policies |
The Motors Liquidation Company GUC Trust (“GUC Trust”)
is a successor to Motors Liquidation Company (formerly known as
General Motors Corp.) (“MLC”) for the purposes of
Section 1145 of the United States Bankruptcy Code
(“Bankruptcy Code”). The GUC Trust holds and directs
the distribution of, and pending such distribution administers,
certain assets pursuant to the terms and conditions of the Second
Amended and Restated Motors Liquidation Company GUC Trust Agreement
(the “GUC Trust Agreement”), dated as of July 30,
2015, and as amended from time to time, and pursuant to the Second
Amended Joint Chapter 11 Plan (the “Plan”), dated
March 18, 2011, of MLC and its debtor affiliates
(collectively, along with MLC, the “Debtors”), for the
benefit of holders of allowed general unsecured claims against the
Debtors (“Allowed General Unsecured Claims”).
The GUC Trust was formed on March 30, 2011, as a statutory
trust under the Delaware Statutory Trust Act, for the purposes of
implementing the Plan and distributing the GUC Trust’s
distributable assets. Wilmington Trust Company serves as trustee
and trust administrator of the GUC Trust (in such capacity, and not
in its individual capacity, the “GUC Trust
Administrator”), and FTI Consulting, Inc. serves as trust
monitor of the GUC Trust (in such capacity, and not in its
individual capacity, the “GUC Trust Monitor”). Prior to
the liquidation in July and August 2015 of all New GM Securities
(as defined below) then held by the GUC Trust (pursuant to the
Liquidation Order (as defined below)), the Plan (as qualified by
the Liquidation Order) generally provided for the distribution of
certain shares of common stock (“New GM Common Stock”)
of the new General Motors Company, formerly known as NGMCO, Inc.
(“New GM”) and any associated Dividend Cash (as defined
below) and certain warrants for the purchase of shares of such
stock (the “New GM Warrants,” and, together with the
New GM Common Stock, the “New GM Securities”) to
holders of Allowed General Unsecured Claims pro rata by the amount
of such claims. Since such liquidation of the New GM Securities,
distributions to holders of Allowed General Unsecured Claims
consist entirely of cash distributions in lieu of New GM
Securities. In addition, prior to the qualification by the
Liquidation Order and the resulting subsequent liquidation of New
GM Securities, the Plan provided that each holder of an Allowed
General Unsecured Claim would obtain, in the form of GUC Trust
Units (as defined below), a contingent right to receive, on a pro
rata basis, additional shares of New GM Common Stock (and
associated Dividend Cash) and New GM Warrants (if and to the extent
such New GM Common Stock and New GM Warrants were not required for
the satisfaction of previously Disputed General Unsecured Claims
(as defined in Note 2), Term Loan Avoidance Action Claims (as
defined in Note 2) or liquidation for the payment of the expenses
and liabilities of the GUC Trust), and certain cash, if any,
remaining at the dissolution of the GUC Trust. Since the
aforementioned liquidation of all New GM Securities previously held
by the GUC Trust, the holders of GUC Trust Units have a contingent
right to receive additional cash, in lieu of New GM Securities, if
any, remaining at the dissolution of the GUC Trust.
By order dated July 2, 2015 (the “Liquidation
Order”), the Bankruptcy Court approved the conversion of the
GUC Trust’s holdings of New GM Securities into cash. To
effect such conversion, on July 7, 2015, the GUC Trust
converted all of its holdings of New GM Warrants into New GM Common
Stock in a cashless exercise. In total, the GUC Trust converted
(i) 10,352,556 New GM Series A Warrants (defined below) into
7,407,155 shares of New GM Common Stock, and (ii) 10,352,556
New GM Series B Warrants (defined below) into 4,953,635 shares of
New GM Common Stock. Thereafter, the GUC Trust sold all of its
holdings of New GM Common Stock for net proceeds aggregating $741.7
million, having completed all such sales on August 5, 2015. As
a result, all distributions by the GUC Trust thereafter in respect
of any Allowed General Unsecured Claims (including in respect of
the GUC Trust Units) will be made solely in cash. Pursuant to the
Liquidation Order, the proceeds of such liquidations (net of
applicable costs, fees, and expenses paid in respect thereof) were
allocated to the beneficiaries of the GUC Trust on a pro rata basis
in the following manner:
|
(a) |
A GUC Trust beneficiary’s
entitlement to a particular number of New GM Warrants that were
exercised was converted into an entitlement to receive the number
of shares of New GM Common Stock into which such New GM Warrants
were exercised. Such conversions were .71549 shares of New GM
Common Stock for each New GM Series A Warrant and .47849 shares of
Common Stock for each New GM Series B Warrant; and |
|
(b) |
A GUC Trust beneficiary’s
entitlement to a particular number of shares of New GM Common Stock
that were liquidated (including the exercised New GM Warrants as
set forth above), was converted into an entitlement to receive an
amount of cash equal to the weighted average sales price (net of
any applicable costs, fees, and expenses paid in respect thereof)
of all of the New GM Common Stock sold, multiplied by the number of
shares of New GM Common Stock to which such GUC Trust beneficiary
would otherwise be entitled (including exercised New GM Warrants as
set forth above). Such weighted average sales price for the GUC
Trust’s holdings of New GM Common Stock that were sold
subsequent to June 30, 2015 was $31.23 per share. |
Following the liquidation described above, the GUC Trust has
invested most of the proceeds in certain marketable securities as
permitted under the GUC Trust Agreement. The amount of cash and
cash equivalents and marketable securities held for distribution to
GUC Trust beneficiaries, including Dividend Cash, is referred to
herein as “Distributable Cash.”
The GUC Trust exists solely for the purpose of resolving claims,
distributing Distributable Cash (following the aforementioned
liquidation of all New GM Securities) and winding down the affairs
of MLC, all in accordance with a plan of liquidation of MLC
approved by the Bankruptcy Court and the Liquidation Order.
Accordingly, the GUC Trust has prepared the accompanying financial
statements on the liquidation basis of accounting in accordance
with accounting principles generally accepted in the United States
of America (U.S. GAAP). Under the liquidation basis of accounting,
assets are stated at their estimated realizable value, which is the
non-discounted amount of cash into which an asset is expected to be
converted during the liquidation period, while liabilities continue
to be recognized at the amount required by other U.S. GAAP, and are
not remeasured to reflect any anticipation that an entity will be
legally released from an obligation. Additionally, under the
liquidation basis of accounting, a reserve is established for
estimated costs expected to be incurred during the liquidation
period. Such costs are accrued when there is a reasonable basis for
estimation. Also, an accrual is made for estimated income or cash
expected to be received over the liquidation period to the extent
that a reasonable basis for estimation exists. These estimates are
periodically reviewed and adjusted as appropriate. The valuation of
assets at realizable value, the accrual for investment income on
marketable securities expected to be received over the liquidation
period, reserves for residual wind-down claims and reserves for
expected liquidation costs represent estimates, are based on
present facts and circumstances known to the GUC Trust
Administrator, and are subject to change.
As described above, the beneficiaries of the GUC Trust are future
holders and, to the extent their liquidating distributions have not
yet been paid to them, current holders of Allowed General Unsecured
Claims and future and current holders of GUC Trust Units
(“Trust Beneficiaries”). As Disputed General Unsecured
Claims are resolved and allowed and thereby become Allowed General
Unsecured Claims, the holders thereof become entitled to receive
liquidating distributions of Distributable Cash (including Dividend
Cash) and GUC Trust Units pro rata by the amount of such claims
and, upon such occurrence, the GUC Trust incurs an obligation to
distribute such cash. Accordingly, liquidating distributions
payable are recorded for the amount of cash that the GUC Trust is
obligated to distribute. Prior to the aforementioned liquidation of
all New GM Securities previously held by the GUC Trust, liquidating
distributions payable were recorded at the fair value of New GM
Securities (including Dividend Cash) as of the end of the period in
which the Disputed General Unsecured Claims were resolved as
Allowed General Unsecured Claims. Similarly, unless the Proposed
Settlement (as defined and described in Note 2) is reached and is
approved by the Bankruptcy Court, to the extent potential Term Loan
Avoidance Action Claims were to arise (and would become allowed) in
the manner described in Note 2, liquidating distributions payable
would be recorded for the Distributable Cash and the related
Dividend Cash that would become distributable to holders of Term
Loan Avoidance Action Claims upon such occurrence. Prior to the
resolution and allowance of Disputed General Unsecured Claims (or
potential Term Loan Avoidance Action Claims), liabilities are not
recorded for the conditional obligations associated with Disputed
General Unsecured Claims or potential Term Loan Avoidance Action
Claims. Rather, the beneficial interests of Trust Beneficiaries in
the residual assets of the GUC Trust are reflected in Net Assets in
Liquidation of the GUC Trust in the accompanying financial
statements.
The accompanying (a) condensed statement of net assets in
liquidation at March 31, 2015, which has been derived from
audited financial statements, and (b) the unaudited interim
condensed financial statements have been prepared in accordance
with the instructions to Form 10-Q and, therefore, do not include
all information and footnotes required by U.S. GAAP for complete
financial statements. The GUC Trust believes all adjustments,
normal and recurring in nature, considered necessary for a fair
presentation have been included. The changes in net assets in
liquidation for the nine months ended December 31, 2015 are
not necessarily indicative of the changes in net assets that may be
expected for the full year. The GUC Trust believes that, although
the disclosures contained herein are adequate to prevent the
information presented from being misleading, the accompanying
interim condensed financial statements should be read in
conjunction with the GUC Trust’s financial statements for the
year ended March 31, 2015 included in Form 10-K filed by the
GUC Trust with the Securities and Exchange Commission on
May 22, 2015.
The preparation of condensed financial statements in conformity
with U.S. GAAP requires the GUC Trust Administrator to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and are subject to change.
Changes to U.S. GAAP are made by the FASB in the form of accounting
standards updates (ASU’s) to the FASB’s Accounting
Standards Codification. The GUC Trust considers the applicability
and impact of all ASU’s. ASU’s not noted herein were
assessed and determined to be not applicable.
|
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v3.3.1.900
Plan of Liquidation
|
9 Months Ended |
Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
|
Plan of Liquidation |
On March 31, 2011, the date the Plan became effective (the
“Effective Date”), there were approximately $29,771
million in Allowed General Unsecured Claims. In addition, as of the
Effective Date, there were approximately $8,154 million in disputed
general unsecured claims which reflects liquidated disputed claims
and a Bankruptcy Court ordered distribution reserve for
unliquidated disputed claims (“Disputed General Unsecured
Claims”), but does not reflect potential Term Loan Avoidance
Action Claims. The total aggregate amount of general unsecured
claims, both allowed and disputed, asserted against the Debtors,
inclusive of the potential Term Loan Avoidance Action Claims, was
approximately $39,425 million as of the Effective Date.
Pursuant to the GUC Trust Agreement, holders of Disputed General
Unsecured Claims become entitled to receive a distribution of
Distributable Cash from the GUC Trust if, and to the extent that,
such Disputed General Unsecured Claims become Allowed General
Unsecured Claims. Under the GUC Trust Agreement, the GUC Trust
Administrator has the authority to file objections to such Disputed
General Unsecured Claims and such claims may be prosecuted through
alternative dispute resolution proceedings, including mediation and
arbitration (“ADR Proceedings”), if appropriate. As of
December 31, 2015, there was one remaining Disputed General
Unsecured Claim of approximately $20.0 million, which was subject
to pending objections filed by the GUC Trust. In addition, as of
December 31, 2015, the GUC Trust held as reserves for Disputed
General Unsecured Claims approximately $50.0 million in claim
amount that is not associated with any particular claim but which
has been set aside by the GUC Trust Administrator as a general
claim contingency. See “Allowed and Disputed Claims”
below.
To the extent that all or a portion of a Disputed General Unsecured
Claim is deemed invalid—or “disallowed”—by
order of the Bankruptcy Court, by order of the tribunal presiding
over the ADR Proceeding (if applicable), or by settlement with the
GUC Trust, such portion of the Disputed General Unsecured Claim
that is disallowed is not entitled to a distribution from the GUC
Trust (subject to any appeal rights of the claimant). However, to
the extent that a Disputed General Unsecured Claim is fully
resolved, and such resolution results in all or a portion of the
original Disputed General Unsecured Claim being deemed
valid—or “allowed”—by order of the
Bankruptcy Court, by order of the tribunal presiding over the ADR
Proceeding (if applicable), or by settlement with the GUC Trust,
such portion of the Disputed General Unsecured Claim that is
allowed will be (subject to any appeal rights of the GUC Trust)
considered an Allowed General Unsecured Claim on the Effective Date
(such claims, “Resolved Disputed Claims”).
Only one avoidance action, captioned Official Committee of
Unsecured Creditors of Motors Liquidation Co. v. JPMorgan Chase
Bank, N.A. et al., Adv. Pro. No. 09-00504 (Bankr. S.D.N.Y.
July 31, 2009) (the “Term Loan Avoidance Action”),
was commenced prior to the statutory deadline for commencing such
actions. The Term Loan Avoidance Action was commenced by the
Official Committee of Unsecured Creditors of Motors Liquidation
Company (the “Committee”), and seeks the return of
approximately $1.5 billion that had been transferred by the Debtors
(with funds advanced after the commencement of the Debtors’
chapter 11 cases by the United States Treasury and Export
Development Canada (together, the “DIP Lenders”)) to a
consortium of prepetition lenders pursuant to the terms of the
order of the Bankruptcy Court. On December 15, 2011, in
accordance with the Plan, upon the dissolution of MLC, the Term
Loan Avoidance Action was transferred to the Avoidance Action Trust
(as defined below). Pursuant to the GUC Trust Agreement, to the
extent that Wilmington Trust Company, not in its individual
capacity but solely in its capacity as the trustee and trust
administrator of the Avoidance Action Trust (the “Avoidance
Action Trust Administrator”), is successful in obtaining a
recovery by way of judgment or settlement from the defendant(s) to
the Term Loan Avoidance Action, such defendant(s) shall receive an
Allowed General Unsecured Claim against the GUC Trust in the amount
so disgorged to the Avoidance Action Trust (such general unsecured
claims “Term Loan Avoidance Action Claims,” and
together with Resolved Disputed Claims, the “Resolved Allowed
Claims”).
The GUC Trust has reached an agreement in principle (the
“Proposed Agreement”) with the Avoidance Action Trust
regarding the treatment of the potential Term Loan Avoidance Action
Claims, which Proposed Agreement (to the extent it becomes
effective) would have the effect of limiting the potential
liability of the GUC Trust associated with the Term Loan Avoidance
Action Claims to $75 million (exclusive of approximately
$55,000 of Term Loan Avoidance Action Claims that were allowed in
the quarter ended December 31, 2015 as described in Note 3).
The terms of the Proposed Agreement, all of which are subject to
the caveats set forth below, are as follows:
|
• |
|
The GUC Trust shall pay $75 million
in cash to the Avoidance Action Trust; |
|
• |
|
The GUC Trust shall be relieved of
its obligations to satisfy any Term Loan Avoidance Action Claims
(exclusive of approximately $55,000 of Term Loan Avoidance Action
Claims that were allowed in the quarter ended December 31,
2015 as described in Note 3); and |
|
• |
|
The Avoidance Action Trust shall take
on the GUC Trust’s former obligation to satisfy Term Loan
Avoidance Action Claims via a set-off from any amount disgorged by
a defendant to the Term Loan Avoidance Action (whether pursuant to
a judgment or settlement). |
The Proposed Agreement has been approved by the trust monitors of
the GUC Trust and the Avoidance Action Trust, but is subject to,
and will not be binding until, the execution of definitive
documentation acceptable to the parties thereto and other
conditions precedent, including the approval of the Bankruptcy
Court. As of the date of this Form 10-Q, the GUC Trust and the
Avoidance Action Trust continue to work towards definitive
documentation and resolution of certain conditions precedent with
respect to the Proposed Agreement. Whether the Proposed Agreement
will, at any point, become a binding agreement on the terms set
forth above, or at all, is uncertain and subject to numerous risks.
Accordingly, holders of GUC Trust Units should carefully consider
such uncertainty before making any decisions with respect to such
units.
It is still unclear whether any amounts actually transferred to the
Avoidance Action Trust pursuant to the Term Loan Avoidance Action
would be for the benefit of holders of Allowed General Unsecured
Claims. The Committee has taken the position that, except for the
reimbursement of certain costs and expenses of the Avoidance Action
Trust, (a) the DIP Lenders are not entitled to any proceeds of
the Term Loan Avoidance Action and have no interests in the trust
established for the action under the Plan (the “Avoidance
Action Trust”) and (b) the holders of Allowed General
Unsecured Claims have the exclusive right to receive any and all
proceeds of the Term Loan Avoidance Action, and are the exclusive
beneficiaries of the Avoidance Action Trust with respect
thereto.
As described in Part II, Item 1, “Legal
Proceedings,” litigation with respect to these issues is
ongoing, and the rights to any recoveries on the Term Loan
Avoidance Action are still disputed. Pursuant to the Plan, however,
no funds reclaimed from the pre-petition lenders will be
transferred to or otherwise benefit the GUC Trust or be distributed
to holders of GUC Trust Units.
GUC Trust Distributable Assets
Pursuant to the terms of the Plan, the Bankruptcy Court authorized
the distribution by New GM of 150 million shares of New GM
Common Stock, warrants to acquire 136,363,635 newly issued shares
of New GM Stock with an exercise price set at $10.00 per share,
expiring July 10, 2016 (“New GM Series A
Warrants”), and warrants to acquire 136,363,635 newly issued
shares of New GM Stock with an exercise price set at $18.33 per
share, expiring July 10, 2019 (“New GM Series B
Warrants”). Record ownership of the New GM Securities was
held by MLC for the benefit of the GUC Trust until the dissolution
of MLC on December 15, 2011, at which time record ownership
was transferred to the GUC Trust.
As described above, pursuant to the Liquidation Order, during July
and August 2015, all of the GUC Trust’s holdings of New GM
Securities were liquidated and, following such liquidation, the GUC
Trust’s Distributable Assets principally consist of
Distributable Cash. Such Distributable Cash is primarily invested
in certain marketable securities as permitted under the GUC Trust
Agreement and the balance is held in cash and cash equivalents.
Prior to the liquidation of all its holdings of New GM Common
Stock, the GUC Trust received dividends on such New GM Common Stock
aggregating $24.7 million. Such dividends are required to be
applied to the same purpose as the New GM Common Stock to which
such dividends relate. If the portion of Distributable Cash
applicable to the proceeds from the liquidation of New GM Common
Stock is distributed to holders of subsequently allowed Disputed
General Unsecured Claims and GUC Trust Units, then the dividends
relating to such Distributable Cash will also be distributed to
such holders. If, however, Distributable Cash is appropriated in
accordance with the GUC Trust Agreement to fund the costs and
liabilities of the GUC Trust, then, in that case, the dividends
relating to such Distributable Cash will be applied to such costs
and liabilities of the GUC Trust and (just like the appropriated
Distributable Cash) will be maintained as Other Administrative Cash
(as defined below). Because such dividends are applied to the same
purposes as the associated Distributable Cash, any references in
this Form 10-Q to Distributable Cash should be understood to
include the dividends relating to such Distributable Cash, unless
expressly indicated otherwise. The amount of cash and cash
equivalents and marketable securities held by the GUC Trust that
relates to dividends received by the GUC Trust on New GM Common
Stock previously held by the GUC Trust is referred to as Dividend
Cash and is included in the amount of cash and cash equivalents and
marketable securities held for distribution to GUC Trust
beneficiaries that is referred to herein as Distributable Cash
(except to the extent of dividends relating to appropriated
Distributable Cash that is classified as Other Administrative Cash
following such appropriation).
Funding for GUC Trust Costs of Liquidation
The GUC Trust has incurred and will continue to incur certain costs
to liquidate the trust assets and implement the Plan. On or about
the Effective Date, pursuant to the Plan, MLC contributed
approximately $52.7 million to the GUC Trust to be held and
maintained by the GUC Trust Administrator (the
“Administrative Fund”) for the purpose of paying
certain fees and expenses (including certain tax obligations)
incurred by the GUC Trust (including fees of the GUC Trust
Administrator and the GUC Trust Monitor and the fees and expenses
for professionals retained by the GUC Trust), other than the
Reporting Costs, as defined below (“Wind-Down Costs”).
As of December 31, 2015, the remaining Administrative Fund
aggregated $8.2 million (consisting of cash and cash equivalents
and marketable securities). As of December 31, 2015, $8.0
million of the remaining Administrative Fund has been designated
for the satisfaction of certain specifically identified costs and
liabilities of the GUC Trust (a substantial majority of which will
likely not be incurred and, therefore, will likely be returned to
the DIP Lenders), and such amount may not be used for the payment
of Trust Professionals fees and expenses or other Wind-Down Costs.
Cash or investments from the Administrative Fund, if any, which
remain at the winding up and conclusion of the GUC Trust must be
returned to the DIP Lenders.
The GUC Trust Agreement authorized the GUC Trust to liquidate
approximately $5.7 million of New GM Securities (the “Initial
Reporting Cash”) shortly after the Effective Date for the
purposes of funding certain fees and expenses of the GUC Trust (the
“Reporting Costs”), including those directly or
indirectly relating to (i) reports to be prepared and filed by
the GUC Trust pursuant to applicable rules, regulations and
interpretations of the Securities and Exchange Commission,
(ii) the transfer, registration for transfer and certification
of GUC Trust Units, (iii) the application by the Committee to
the Internal Revenue Service for a private letter ruling regarding
the tax treatment of the GUC Trust and the holders of Allowed
General Unsecured Claims in respect to the distribution of New GM
Securities, and (iv) certain legal proceedings relating to the
Term Loan Avoidance Action. The GUC Trust Agreement provides that
the Administrative Fund may not be utilized to satisfy any
Reporting Costs.
The GUC Trust Agreement provides that, if the GUC Trust
Administrator determines that the Administrative Fund is not
sufficient to satisfy the current or projected Wind-Down Costs or
the Initial Reporting Cash is not sufficient to satisfy the current
or projected Reporting Costs, the GUC Trust Administrator, with the
approval of the GUC Trust Monitor, is authorized to set aside
Distributable Cash from distribution for these purposes. The GUC
Trust Administrator may then appropriate such Distributable Cash to
fund the Wind-Down Costs and/or Reporting Costs with the required
approval of the Bankruptcy Court. Distributable Cash that is set
aside and/or appropriated in this manner will not be available for
distribution to the beneficiaries of GUC Trust Units, and any
appropriation of Distributable Cash (including related Dividend
Cash) will be classified as “Other Administrative Cash”
under the GUC Trust Agreement. The setting aside (or appropriation)
of Distributable Cash, including Dividend Cash, itself is not, and
has not been, reflected in the Statement of Net Assets in
Liquidation or any of the other financial statements of the GUC
Trust. Separate from this process of setting aside (or
appropriating) Distributable Cash to satisfy unfunded projected
costs and expenses of the GUC Trust, as a matter of financial
reporting, the GUC Trust records a reserve in its Statement of Net
Assets in Liquidation (the source of funding of which is not
addressed therein) for all expected costs of liquidation for which
there is a reasonable basis for estimation. For this reason, among
others, there is not a direct relationship between the amount of
such reserve reflected in the Statement of Net Assets in
Liquidation and the amount of any Distributable Cash that is set
aside (or appropriated) for current or projected costs and expenses
of the GUC Trust. Adjustments to the Reserve for Expected Costs of
Liquidation as reported in the Statement of Net Assets in
Liquidation are recorded only when there is a reasonable basis for
estimation of the expected incurrence of additional costs or a
reduction in expected costs. For more information regarding the
Reserves for Expected Costs of Liquidation reflected in the
accompanying Condensed Statement of Net Assets in Liquidation, see
Note 6.
Prior to the aforementioned liquidation of all New GM Securities in
July and August 2015, the GUC Trust was authorized, with the
approval of the GUC Trust Monitor, to set aside from distribution
New GM Securities for the funding purposes described above and to
sell such set aside New GM Securities with the approval of the
Bankruptcy Court. The Bankruptcy Court previously approved in March
and December 2012, and again in January 2015, the sale of New GM
Securities to fund the then current and projected costs and
expenses of the GUC Trust. The March 2012 Bankruptcy Court order
also authorized the sale of further New GM Securities aggregating
$13.7 million for the purpose of funding certain fees, costs and
expenses of the Avoidance Action Trust and the transfer of the sale
proceeds to the Avoidance Action Trust (such sale proceeds were so
transferred in May 2012). Prior to the aforementioned liquidation
of all New GM Securities, sales of New GM Securities to fund
projected Reporting Costs and Wind-Down Costs through calendar year
2015 aggregated approximately $61.7 million, including Dividend
Cash of $0.2 million and the Initial Reporting Cash (which amounts
comprised part of the GUC Trust’s Other Administrative Cash).
Such securities sold aggregated 1,043,801 shares of New GM Common
Stock, 948,887 New GM Series A Warrants and 948,887 New GM Series B
Warrants. In December 2015, the Bankruptcy Court approved the
appropriation of Distributable Cash aggregating approximately $12
million to fund the projected costs and expenses of the GUC Trust
for calendar year 2016. Such appropriation reduced Distributable
Cash and increased Other Administrative Cash. As of
December 31, 2015, Other Administrative Cash aggregated $15.8
million. To the extent that any of the Other Administrative Cash is
not ultimately required and is held by the GUC Trust at the time of
its dissolution, such remaining Other Administrative Cash will be
distributed by the GUC Trust to holders of the GUC Trust Units.
As of December 31, 2015, Distributable Cash of $46.6 million
was set aside for projected GUC Trust fees, costs and expenses to
be incurred beyond 2016, including $2.3 million set aside for
potential income taxes on dividends received on holdings of New GM
Common Stock and Investment Income as described below in
“Funding for Potential Tax Liabilities on Dispositions of New
GM Securities, Dividends on New GM Common Stock and Investment
Income.” Accordingly, such Distributable Cash is not
available for distribution to the beneficiaries of the GUC Trust
Units. Set aside and/or appropriated Distributable Cash is
reflected in cash and cash equivalents and marketable securities in
the Statement of Net Assets in Liquidation until expended.
Funding for Potential Tax Liabilities on Dispositions of New
GM Securities, Dividends on New GM Common Stock and Investment
Income
The GUC Trust is subject to U.S. federal income tax on realized net
gains from the distribution and sale of New GM Securities (such
taxes, “Taxes on Distribution”). The GUC Trust is also
subject to U.S. federal income tax on dividends received on New GM
Common Stock held by the GUC Trust (such taxes, “Dividend
Taxes”) and on investment income earned on Distributable Cash
(such taxes, “Investment Income Taxes”). The GUC Trust
Agreement provides that the Administrative Fund may not be utilized
to satisfy any Taxes on Distribution, Dividend Taxes or Investment
Income Taxes. As such, the GUC Trust Administrator is authorized,
with the approval of the GUC Trust Monitor, to set aside from
distribution Distributable Cash in amounts that would be sufficient
to satisfy any potential Taxes on Distribution, Dividend Taxes or
Investment Income Taxes. Distributable Cash that is set aside for
Dividend Taxes and Investment Income Taxes is included in the
set-aside for Wind-Down Costs described above in “Funding for
GUC Trust Costs of Liquidation.” The GUC Trust Administrator
may appropriate such set aside Distributable Cash to fund the Taxes
on Distribution, Dividend Taxes or Investment Income Taxes with the
approval of the GUC Trust Monitor and, with respect to Dividend
Taxes and Investment Income Taxes only, with the approval of the
Bankruptcy Court. Distributable Cash that is appropriated in this
manner will not be available for distribution to the beneficiaries
of GUC Trust Units, and the appropriation of Distributable Cash
(including Dividend Cash) will be classified as “Other
Administrative Cash” under the GUC Trust Agreement. Set aside
and/or appropriated Distributable Cash is reflected in cash and
cash equivalents and marketable securities until expended to pay
Taxes on Distribution, Dividend Taxes or Investment Income Taxes.
While the set-aside or appropriated Distributable Cash (including
Dividend Cash) is not available for distribution, there is no
corresponding liability or reserve related to such set-aside assets
reflected in the Statement of Net Assets in Liquidation or any of
the other financial statements of the GUC Trust.
Prior to the liquidation of all New GM Securities in July and
August 2015 described above, the GUC Trust was authorized, with the
approval of the GUC Trust Monitor, to set aside from distribution
New GM Securities to fund potential Taxes on Distribution, Dividend
Taxes and Investment Income Taxes and to sell such set aside New GM
Securities to fund the Taxes on Distribution, Dividend Taxes or
Investment Income Taxes with the approval of the GUC Trust Monitor
and, with respect to Dividend Taxes and Investment Income Taxes
only, with the approval of the Bankruptcy Court. Such set aside New
GM Securities were included in Holdings of New GM Securities in the
Statement of Net Assets in Liquidation.
During the quarter ended December 31, 2015, the GUC Trust
Administrator reviewed the current and potential Taxes on
Distribution. As a result of such review, the GUC Trust
Administrator determined that Distributable Cash of $109.7 million
should be set aside for potential Taxes on Distribution for
realized gains that are still subject to examination by the
Internal Revenue Service and that are based on the tax basis of the
New GM Securities on December 15, 2011, the date of transfer
of record ownership of the New GM Securities from MLC to the GUC
Trust. The GUC Trust Administrator intends to continue to
reevaluate the amount of Distributable Cash set aside on a
quarterly basis.
As previously disclosed, during the quarter ended
September 30, 2013, the GUC Trust made a determination to file
its U.S. federal income tax returns taking the position that
beneficial ownership for a substantial majority of New GM
Securities was transferred from MLC to the GUC Trust on
March 31, 2011, and that the tax basis of such New GM
Securities should be determined with reference to the value of such
securities on such date, instead of December 15, 2011, when
record ownership of the remaining New GM Securities still held by
MLC was transferred from MLC to the GUC Trust. For the remaining
substantial minority of New GM Securities transferred from MLC to
the GUC Trust, the GUC Trust determined that the transfer of
beneficial ownership occurred on other dates for which the tax
basis should be determined by reference to the value of such
securities on such dates. This new tax position resulted in an
increased tax basis of the New GM Securities from the prior tax
position and, therefore, reduced taxable gains and increased
taxable losses on distributions and sales of New GM Securities
since March 31, 2011. The new tax position has not been
sustained on examination by the Internal Revenue Service as of the
date hereof. However, the GUC Trust believes, based on the
available evidence and consultation with GUC Trust professionals,
that it is more likely than not that the new tax position will be
sustained on examination by the Internal Revenue Service based on
the technical merits of the position. Accordingly, this new tax
position has been recognized in any current and deferred income tax
liabilities and income tax provision in the GUC Trust’s
financial statements since the quarter ended September 30,
2013.
Following the GUC Trust’s determination to utilize the new
tax position set forth above, the GUC Trust filed its U.S. federal
income tax returns for the years ended March 31, 2015, 2014
and 2013 with the Internal Revenue Service using such new tax
position. Such tax returns were accompanied by requests for prompt
determination of tax liability pursuant to Section 505(b) of
the Bankruptcy Code, and the statutory notification periods set
forth in Section 505(b) of the Bankruptcy Code with respect to
the GUC Trust’s U.S. federal income tax returns for the year
ended March 31, 2015 and prior years have expired.
Accordingly, the tax liabilities set forth in the GUC Trust’s
U.S. federal income tax returns for the year ended March 31,
2015 and prior years are no longer subject to examination by the
Internal Revenue Service. However, remaining capital loss
carryovers that were generated in those years, combined with
capital gains and losses generated in the nine months ended
December 31, 2015, from the new tax position, which aggregate
$182.4 million, along with net operating loss carryovers generated
through December 31, 2015 aggregating $97.3 million, could be
subject to examination by the Internal Revenue Service in
subsequent years when those losses, if any, are utilized.
In contrast to the GUC Trust’s financial statements, as a
conservative measure, the calculation of the “set
aside” Distributable Cash for potential Taxes on Distribution
utilizes the prior tax position rather than the new tax position to
the extent that the GUC Trust’s liability for Taxes on
Distribution has not been finally determined in accordance with
Section 505(b) of the Bankruptcy Code or the new tax position
has not been sustained on examination by the Internal Revenue
Service. Accordingly, the potential tax liability for the GUC
Trust’s U.S. federal income tax returns for the year ending
March 31, 2016 and subsequent years is calculated, for
purposes of the “set aside” of Distributable Cash for
potential Taxes on Distribution, using the prior tax position
rather than the new tax position. In addition, the “set
aside” calculation does not recognize any reductions related
to remaining net operating loss carryovers or capital loss
carryovers for losses on distributions or sales of New GM
Securities that are attributable to the March 31, 2015 tax
year or prior tax years, until such carryovers are utilized and
such utilization is finally determined in accordance with
Section 505(b) of the Bankruptcy Code or the new tax position
has been sustained on examination by the Internal Revenue
Service.
For additional information regarding set aside Distributable Cash,
see “Net Assets in Liquidation—Distributable Cash Set
Aside from Distribution” in Item 2
(“Management’s Discussion and Analysis of Financial
Condition and Results of Operations”) below.
Residual Wind-Down Claims and Costs
Upon the dissolution of the Debtors, which occurred on
December 15, 2011, the GUC Trust became responsible for
resolving and satisfying (to the extent allowed) all remaining
disputed administrative expenses, priority tax claims, priority
non-tax claims and secured claims (the “Residual Wind-Down
Claims”). On December 15, 2011, under the Plan, the
Debtors transferred to the GUC Trust an amount of assets necessary
(the “Residual Wind-Down Assets”) to satisfy the
ultimate allowed amount of such Residual Wind-Down Claims
(including certain reasonable litigation defense costs related to
the Term Loan Avoidance Action (the “Avoidance Action Defense
Costs”)), as estimated by the Debtors, and the costs, fees
and expenses relating to satisfying and resolving the Residual
Wind-Down Claims (the “Residual Wind-Down Costs”). The
Residual Wind-Down Assets initially aggregated approximately $42.8
million (which amount consisted of approximately $40.0 million in
cash, including approximately $1.4 million designated for the
payment of Avoidance Action Defense Costs, and the transferred
benefit of approximately $2.8 million in prepaid expenses). Should
the Residual Wind-Down Claims and the Residual Wind-Down Costs be
less than the Residual Wind-Down Assets, any excess funds will be
returned to the DIP Lenders. If, at any time, the GUC Trust
Administrator determines that the Residual Wind-Down Assets are not
adequate to satisfy the Residual Wind-Down Claims (including the
actual amount of Avoidance Action Defense Costs) and Residual
Wind-Down Costs, such costs will be satisfied by Other
Administrative Cash. If there is no remaining Other Administrative
Cash, the GUC Trust Administrator is authorized to, with GUC Trust
Monitor approval, set aside and, with Bankruptcy Court approval,
appropriate Distributable Cash to cover the shortfall. To the
extent that Distributable Cash is set aside and/or appropriated to
obtain funding to complete the wind-down of the Debtors, such
Distributable Cash will not be available for distribution to the
beneficiaries of the GUC Trust. Therefore, the amount of Residual
Wind-Down Claims and Residual Wind-Down Costs could reduce the
assets of the GUC Trust available for distribution. The setting
aside or appropriation of Distributable Cash (including Dividend
Cash) itself is not reflected in the Statement of Net Assets in
Liquidation or any of the other financial statements of the GUC
Trust. Rather, such set aside or appropriated Distributable Cash
(including Dividend Cash) is reflected in cash and cash equivalents
and marketable securities in the accompanying Condensed Statement
of Net Assets in Liquidation until expended. After the GUC Trust
has concluded its affairs, any funds remaining that were obtained
from the sale of New GM Securities or appropriation of
Distributable Cash to fund the wind-down process or the resolution
and satisfaction of the Residual Wind-Down Claims will be
distributed to the holders of the GUC Trust Units.
The amount of Avoidance Action Defense Costs incurred to date
exceeds the corresponding cash of $1.4 million received by the GUC
Trust from MLC on the Dissolution Date by approximately $9.5
million. As a result, new Residual Wind-Down Claims have arisen in
the amount of such excess. It is expected that additional Avoidance
Action Defense Costs will be incurred for which additional Residual
Wind-Down Claims will arise to be paid from the other remaining
Residual Wind-Down Assets and, following the depletion of such
assets, the Administrative Fund (to the extent of any excess
amounts remaining in the Administrative Fund from the funds
designated for the satisfaction of certain specifically identified
costs and liabilities of the GUC Trust), Other Administrative Cash
or the appropriation of Distributable Cash. As of December 31,
2015, Residual Wind-Down Assets aggregating $22.3 million were held
by the GUC Trust and were recorded in cash and cash equivalents and
marketable securities (aggregating approximately $22.2 million) and
other assets and deposits (approximately $0.1 million) in the
accompanying Condensed Statement of Net Assets in Liquidation as of
December 31, 2015. By comparison, there were approximately
$0.5 million in Residual Wind-Down Claims against such assets as of
December 31, 2015, subject to increase for new Residual
Wind-Down Claims that are expected to arise for Avoidance Action
Defense Costs.
In addition to the Residual Wind-Down Assets, the GUC Trust also
received on the Dissolution Date approximately $3.4 million in cash
from MLC, which amount included: (i) $1.4 million in respect
of certain costs, fees and expenses payable under the Plan to the
indenture trustees and fiscal and paying agents for the previously
outstanding debt of MLC (the “Indenture Trustee / Fiscal and
Paying Agent Costs”), and (ii) $2.0 million in respect
of Reporting Costs. The funds received were credited to the reserve
for expected costs of liquidation. Any unused portion of the funds
designated for the Indenture Trustee / Fiscal and Paying Agent
Costs must be returned to the DIP Lenders and will not be available
for distribution to the holders of GUC Trust Units at the winding
up and conclusion of the GUC Trust. As of December 31, 2015,
funds designated for the Indenture Trustee / Fiscal and Paying
Agents Costs held by the GUC Trust approximated $0.3 million and
are recorded in cash and cash equivalents in the accompanying
Condensed Statement of Net Assets in Liquidation.
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- DefinitionThe entire disclosure for the liquidation basis of accounting.
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v3.3.1.900
Net Assets in Liquidation
|
9 Months Ended |
Dec. 31, 2015 |
Text Block [Abstract] |
|
Net Assets in Liquidation |
|
3. |
Net Assets in Liquidation |
Description
Under the GUC Trust Agreement and the Plan, as described more fully
in Note 1, the beneficiaries of the GUC Trust are future and, to
the extent their liquidating distributions have not yet been paid
to them, current holders of Allowed General Unsecured Claims and
future and current holders of GUC Trust Units. Assets of the GUC
Trust consisting primarily of Distributable Cash (including
Dividend Cash) as described in Note 1 are available to be
distributed to the Trust Beneficiaries (“GUC Trust
Distributable Assets”) in accordance with the Plan and the
GUC Trust Agreement, except to the extent that they are set aside
or appropriated for funding the expected costs of liquidation and
potential tax liabilities of the GUC Trust. The amounts of net
assets in liquidation presented in the accompanying Condensed
Statements of Net Assets in Liquidation at December 31, 2015
and March 31, 2015, correspond to the amounts of GUC Trust
Distributable Assets as of December 31, 2015, after certain
adjustments including reductions for the amounts of set aside
Distributable Cash and appropriated Distributable Cash. GUC Trust
Distributable Assets aggregated approximately $462.7 million at
December 31, 2015. For additional information, see “Net
Assets in Liquidation—Distributable Assets” in
Item 2 (“Management’s Discussion and Analysis of
Financial Condition and Results of Operations”) below.
Cash and Cash Equivalents and Marketable
Securities
As of December 31, 2015, cash and cash equivalents and
marketable securities aggregated $667.6 million and are comprised
of the following:
|
|
|
|
|
(in thousands) |
|
|
|
Distributable Cash (including associated Dividend Cash)
|
|
$ |
620,873 |
|
Residual Wind-Down Assets
|
|
|
22,167 |
|
Administrative Fund
|
|
|
8,233 |
|
Other Administrative Cash
|
|
|
15,790 |
|
Funds for Indenture Trustee/Fiscal Paying Agent Costs
|
|
|
319 |
|
Other
|
|
|
235 |
|
|
|
|
|
|
Total
|
|
$ |
667,617 |
|
|
|
|
|
|
As described in Note 4, as of December 31, 2015, the GUC Trust
had accrued liquidating distributions payable aggregating $4.6
million. Such amount includes $2.7 million of Distributable Cash
that was distributable to holders of GUC Trust Units in respect of
Excess GUC Trust Distributable Assets as of December 31, 2015.
In addition, as of December 31, 2015, the amount of
Distributable Cash reflected in the table above includes $46.6
million of amounts set aside for projected GUC Trust fees, costs
and expenses to be incurred beyond 2016 (including $2.3 million for
projected Dividend Taxes and Investment Income Taxes) and
Distributable Cash of $109.7 million set aside for potential Taxes
on Distribution. The aggregate amount of Distributable Cash which
was pending distribution or was set aside and was not available for
distribution at December 31, 2015 was $160.9 million.
Potential Recovery in New GM Shareholder Class Action
Proposed Settlement
As described in Part II, Item 1, “Legal
Proceedings,” the GUC Trust intends to file a proof of claim
in connection with a proposed settlement of a class action against
New GM. The amount of potential recovery for the GUC Trust, if any,
from such proposed settlement is not estimable at this time.
Accrued Dividends on Holdings of New GM Common
Stock
As of March 31, 2015, the GUC Trust accrued approximately
$22.4 million in estimated dividends expected to be declared by New
GM in the future and received by the GUC Trust on its holdings of
New GM Common Stock over its estimated remaining liquidation
period. Subsequent thereto, based on a determination that it would
be in the best interests of Trust Beneficiaries, the GUC Trust made
the determination to file a motion with the Bankruptcy Court
seeking authority to liquidate all or substantially all of the GUC
Trust’s holdings of New GM Securities. Such motion was
approved by the Bankruptcy Court in the Liquidation Order described
above and all of the GUC Trust’s holdings of New GM
Securities were liquidated in July and August 2015. Accordingly,
the GUC Trust no longer expects to receive dividends on New GM
Common Stock. Accordingly, the accrued dividends as of
March 31, 2015 (net of dividends received in June 2015) were
reversed and no accrual of dividends has been made since
March 31, 2015.
Trust Units
As described in Note 1, under the Plan, each holder of an Allowed
General Unsecured Claim retains a contingent right to receive, on a
pro rata basis, additional Distributable Cash (if and to the extent
not required for the satisfaction of previously Disputed General
Unsecured Claims or potential Term Loan Avoidance Action Claims, or
appropriation for the payment of the expenses or tax liabilities of
the GUC Trust). The GUC Trust issues units representing such
contingent rights (“GUC Trust Units”) at the rate of
one GUC Trust Unit per $1,000 of Allowed General Unsecured Claims
to each holder of an Allowed General Unsecured Claim, subject to
rounding pursuant to the GUC Trust Agreement, in connection with
the initial recognition of each Allowed General Unsecured
Claim.
As described in “Critical Accounting Policies and
Estimates—Income Taxes” in Item 2
(“Management’s Discussion and Analysis of Financial
Condition and Results of Operations”) below, the GUC Trust is
considered to be a Disputed Ownership Fund pursuant to Treasury
Regulation Section 1.468B-9. Pursuant to Treasury Regulation
Section 1.468B-9(c)(6), upon the termination of the GUC Trust,
certain capital losses and net operating losses may be
distributable to current or previous holders of GUC Trust Units. At
this time, the amount of such losses that may be distributed is not
determinable, the timing of such a distribution is dependent on a
number of factors affecting the life of the GUC Trust and its
termination date, and who is entitled to receive such a
distribution is not currently known. The GUC Trust has initiated
discussions with the Internal Revenue Service to get clarification
on some of these issues, but, at this time, it is highly uncertain
whether or not the Internal Revenue Service will provide the
necessary guidance.
The GUC Trust makes quarterly liquidating distributions to holders
of GUC Trust Units to the extent that (i)(a) certain previously
Disputed General Unsecured Claims asserted against the
Debtors’ estates or potential Term Loan Avoidance Action
Claims are either disallowed or are otherwise resolved favorably to
the GUC Trust (thereby reducing the amount of GUC Trust assets
reserved for distribution in respect of such asserted or potential
claims) or (b) certain Excess GUC Trust Distributable Assets
(as defined in the GUC Trust Agreement) that were previously set
aside from distribution are released in the manner permitted under
the GUC Trust Agreement, and (ii) as a result of the
foregoing, the amount of Excess GUC Trust Distributable Assets (as
defined in the GUC Trust Agreement) as of the end of the relevant
quarter exceeds thresholds set forth in the GUC Trust
Agreement.
The following table presents the changes during the three months
ended December 31, 2015, in the numbers of GUC Trust Units
outstanding or which the GUC Trust was obligated to issue:
|
|
|
|
|
|
|
Trust Units |
|
Outstanding or issuable at September 30, 2015
|
|
|
31,853,702 |
|
Issued during the period
|
|
|
— |
|
Less: Issuable at beginning of period
|
|
|
— |
|
Add: Issuable at end of period (1)
|
|
|
56 |
|
|
|
|
|
|
Outstanding or issuable at December 31, 2015 (2)
|
|
|
31,853,758 |
|
|
|
|
|
|
(1) |
The number of GUC Trust Units
issuable at any time represents GUC Trust Units issuable in respect
of Allowed General Unsecured Claims that were newly allowed during
the fiscal quarter. |
(2) |
The number of GUC Trust Units
outstanding at any time represents GUC Trust Units issued in
respect of Allowed General Unsecured Claims that were allowed in
prior periods, including GUC Trust Units held by the GUC Trust for
the benefit of (a) holders of Allowed General Unsecured Claims
who had not yet supplied information required by the GUC Trust in
order to effect the initial distribution to which they are entitled
and (b) governmental entities that are precluded by applicable
law from receiving distributions of GUC Trust Units. |
Allowed and Disputed Claims
The total cumulative pro rata liquidating distributions ultimately
received by Trust Beneficiaries is dependent upon the current
amount of Allowed General Unsecured Claims and final resolution of
outstanding Disputed General Unsecured Claims and potential Term
Loan Avoidance Action Claims (as described in Note 2). Disputed
General Unsecured Claims at December 31, 2015 reflect claim
amounts at their originally filed amounts, a court ordered
distribution “set aside” for certain claims filed
without a claim amount and other adjustments as ordered by the
court or permitted by the Plan. The Disputed General Unsecured
Claims may settle at amounts that differ significantly from these
amounts and at amounts that differ significantly from the
historical pattern at which claims have been settled and allowed in
proportion to claims resolved and disallowed. As described in Note
1, prior to the resolution and allowance of Disputed General
Unsecured Claims (or potential Term Loan Avoidance Action Claims),
liabilities are not recorded for the conditional obligations
associated with Disputed General Unsecured Claims. Liquidating
distributions payable are recorded in the amount of Distributable
Cash (previously the fair value of New GM Securities) to be
distributed as of the end of the period in which the Disputed
General Unsecured Claims are resolved as Allowed General Unsecured
Claims. Similarly, unless the Proposed Settlement (as described in
Note 2) is reached and is approved by the Bankruptcy Court, to the
extent potential Term Loan Avoidance Action Claims were to arise
(and would become allowed) in the manner described in Note 2,
liquidating distributions payable would be recorded in the amount
of Distributable Cash that would become distributable to holders of
Term Loan Avoidance Action Claims upon such occurrence.
The following table presents a summary of activity with respect to
the Allowed and Disputed General Unsecured Claims and potential
Term Loan Avoidance Action Claims for the three months ended
December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Allowed General
Unsecured
Claims |
|
|
Disputed General
Unsecured
Claims |
|
|
Term Loan
Avoidance
Action
Claims |
|
|
Maximum
Amount of
Unresolved
Claims (1) |
|
|
Total Claim
Amount (2) |
|
Total, September 30, 2015
|
|
$ |
31,853,630 |
|
|
$ |
70,000 |
|
|
$ |
1,500,000 |
|
|
$ |
1,570,000 |
|
|
$ |
33,423,630 |
|
New Allowed General Unsecured Claims, net
|
|
|
55 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
55 |
|
Term Loan Avoidance Action Claims resolved
|
|
|
— |
|
|
|
— |
|
|
|
(55 |
) |
|
|
(55 |
) |
|
|
(55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total, December 31, 2015
|
|
$ |
31,853,685 |
|
|
$ |
70,000 |
|
|
$ |
1,499,945 |
|
|
$ |
1,569,945 |
|
|
$ |
33,423,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Maximum Amount of Unresolved Claims
represents the sum of Disputed General Unsecured Claims and Term
Loan Avoidance Action Claims. |
(2) |
Total Claim Amount represents the sum
of Allowed General Unsecured Claims and Maximum Amount of
Unresolved Claims. |
During the three months ended December 31, 2015, the Avoidance
Action Trust reached settlements with certain defendants to the
Term Loan Avoidance Action resulting in recoveries to the Avoidance
Action Trust of approximately $55,000. As a result, corresponding
Term Loan Avoidance Action Claims arose and were allowed under the
GUC Trust.
|
X |
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v3.3.1.900
Liquidating Distributions
|
9 Months Ended |
Dec. 31, 2015 |
Text Block [Abstract] |
|
Liquidating Distributions |
|
4. |
Liquidating Distributions |
Liquidating distributions in the three months ended
December 31, 2015 consisted of the following:
|
|
|
|
|
(in thousands) |
|
Fair Value |
|
Distributions during the three months ended December 31,
2015
|
|
$ |
129,990 |
|
Less: Liquidating distributions payable at September 30,
2015
|
|
|
(131,885 |
) |
Add: Liquidating distributions payable at December 31,
2015
|
|
|
4,612 |
|
|
|
|
|
|
Total
|
|
$ |
2,717 |
|
|
|
|
|
|
Liquidating distributions during the nine months ended
December 31, 2015, consisted of the following:
|
|
|
|
|
(in thousands) |
|
Fair Value |
|
Distributions during the nine months ended December 31,
2015
|
|
$ |
130,239 |
|
Less: Liquidating distributions payable at March 31, 2015
|
|
|
(7,714 |
) |
Add: Liquidating distributions payable at December 31,
2015
|
|
|
4,612 |
|
|
|
|
|
|
Total
|
|
$ |
127,137 |
|
|
|
|
|
|
The distributions during the three and nine months ended
December 31, 2015 consisted of (1) distributions to
holders of GUC Trust Units for excess distributions payable and
(2) distributions to holders of Allowed General Unsecured
Claims who previously failed to fulfill informational requirements
for distribution established in accordance with the GUC Trust
Agreement, but subsequently successfully fulfilled such information
requirements.
The GUC Trust was obligated at December 31, 2015 to distribute
Distributable Cash of $4.6 million to the following:
(1) holders of GUC Trust Units for excess distributions
payable, (2) certain holders of Allowed General Unsecured
Claims who had not then satisfied certain informational
requirements necessary to receive these securities and
(3) holders of certain Term Loan Avoidance Action Claims as
described in Note 3.
|
X |
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v3.3.1.900
Fair Value Measurements
|
9 Months Ended |
Dec. 31, 2015 |
Fair Value Disclosures [Abstract] |
|
Fair Value Measurements |
5. |
Fair Value Measurements |
Accounting standards require certain assets and liabilities be
reported at fair value in the financial statements and provide a
framework for establishing that fair value. The framework for
determining fair value is based on a hierarchy that prioritizes the
inputs and valuation techniques used to measure fair value. The GUC
Trust’s Cash Equivalents, Marketable Securities, Holdings of
New GM Securities (at March 31, 2015) and Liquidating
Distributions Payable are presented as provided by this
hierarchy.
Level 1—In general, fair values determined by Level 1
inputs use quoted prices in active markets for identical assets and
liabilities that the GUC Trust has the ability to access.
Level 2—Fair values determined by Level 2 inputs use
other inputs that are observable, either directly or indirectly.
These Level 2 inputs include quoted prices for similar assets or
liabilities in active markets, and other inputs such as interest
rates and yield curves that are observable at commonly quoted
intervals.
Level 3—Level 3 inputs are unobservable inputs,
including inputs that are available in situations where there is
little, if any, market activity for the related asset or liability.
These Level 3 fair value measurements are based primarily on
management’s own estimates using pricing models, discounted
cash flow methodologies, or similar techniques taking into account
the characteristics of the asset or liability. The GUC Trust had no
assets or liabilities that are measured with Level 3 inputs at
December 31, 2015 and March 31, 2015.
In instances where inputs used to measure fair value fall into
different levels in the above fair value hierarchy, fair value
measurements in their entirety are categorized based on the lowest
level input that is significant to the valuation. The GUC
Trust’s assessment of the significance of particular inputs
to these fair value measurements requires judgment and considers
factors specific to each asset or liability.
The GUC Trust also holds other financial instruments not measured
at fair value on a recurring basis, including Accounts Payable and
Other Liabilities. The fair value of these liabilities approximates
the carrying amounts in the accompanying financial statements due
to the short maturity of such instruments.
The following table presents information about the GUC
Trust’s assets and liabilities measured at fair value on a
recurring basis at December 31, 2015 and March 31, 2015,
and the valuation techniques used by the GUC Trust to determine
those fair values.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
(in thousands)
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds
|
|
$ |
21,136 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
21,136 |
|
Marketable Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury bills
|
|
|
— |
|
|
|
637,179 |
|
|
|
— |
|
|
|
637,179 |
|
U.S. government agency securities
|
|
|
— |
|
|
|
5,994 |
|
|
|
— |
|
|
|
5,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$ |
21,136 |
|
|
$ |
643,173 |
|
|
$ |
— |
|
|
$ |
664,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidating distributions payable
|
|
$ |
4,612 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2015 |
|
(in thousands)
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds
|
|
$ |
19,150 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
19,150 |
|
Marketable Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal commercial paper and variable demand notes
|
|
|
— |
|
|
|
12,064 |
|
|
|
— |
|
|
|
12,064 |
|
Corporate commercial paper
|
|
|
— |
|
|
|
18,880 |
|
|
|
— |
|
|
|
18,880 |
|
Holdings of New GM Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New GM Common Stock
|
|
|
427,151 |
|
|
|
— |
|
|
|
— |
|
|
|
427,151 |
|
New GM Warrants
|
|
|
490,826 |
|
|
|
— |
|
|
|
— |
|
|
|
490,826 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$ |
937,127 |
|
|
$ |
30,944 |
|
|
$ |
— |
|
|
$ |
968,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidating distributions payable
|
|
$ |
7,714 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
7,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following are descriptions of the valuation methodologies used
for assets and liabilities measured at fair value:
|
• |
|
Due to their short-term liquid
nature, the fair value of cash equivalents approximates their
carrying value. |
|
• |
|
Marketable securities at
December 31, 2015 consist of U.S. Treasury bills and U.S.
government agency securities. Marketable securities at
March 31, 2015 consist of municipal commercial paper and
variable demand notes and corporate commercial paper. Due to their
short-term maturities, the fair value of U.S. Treasury bills and
corporate and municipal commercial paper approximates their
carrying value. The fair value of U.S. government agency securities
is based on pricing models, quoted prices of securities with
similar characteristics, or broker quotes. Municipal variable
demand notes trade daily at par value and, therefore, their fair
value is equal to par value. |
|
• |
|
Holdings of New GM Securities at
March 31, 2015 were valued at closing prices reported on the
active market on which the securities are traded. |
|
• |
|
Liquidating distributions payable at
December 31, 2015 are valued at the amount of cash that the
GUC Trust is obligated to distribute. Liquidating distributions
payable at March 31, 2015 are valued at closing prices of New
GM Securities reported on the active market on which the securities
are traded. |
The GUC Trust’s policy is to recognize transfers between
levels of the fair value hierarchy as of the actual date of the
event of change in circumstances that caused the transfer. There
were no such transfers during the three or nine months ended
December 31, 2015 and the year ended March 31, 2015.
|
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- DefinitionThe entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19279-110258
Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258
Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19190-110258
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v3.3.1.900
Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims
|
9 Months Ended |
Dec. 31, 2015 |
Text Block [Abstract] |
|
Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims |
|
6. |
Reserves for Expected Costs of
Liquidation and Residual Wind-Down Claims |
The following is a summary of the activity in the reserves for
expected costs of liquidation for the three and nine months ended
December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
2015 |
|
(in thousands)
|
|
Reserve for
Expected
Wind-Down
Costs |
|
|
Reserve for
Expected
Reporting
Costs |
|
|
Reserve for
Indenture
Trustee/Fiscal
and Paying
Agent Costs |
|
|
Reserve for
Residual
Wind-Down
Costs |
|
|
Total Reserves
for Expected
Costs of
Liquidation |
|
Balance, September 30, 2015
|
|
$ |
22,176 |
|
|
$ |
9,178 |
|
|
$ |
329 |
|
|
$ |
1,219 |
|
|
$ |
32,902 |
|
Less reductions in reserves
|
|
|
(1,555 |
) |
|
|
(919 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,474 |
) |
Less liquidation costs incurred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals
|
|
|
(1,093 |
) |
|
|
(358 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(1,452 |
) |
Trust Governance
|
|
|
(816 |
) |
|
|
(450 |
) |
|
|
(21 |
) |
|
|
— |
|
|
|
(1,287 |
) |
Other Administrative Expenses
|
|
|
(13 |
) |
|
|
(83 |
) |
|
|
— |
|
|
|
— |
|
|
|
(96 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015
|
|
$ |
18,699 |
|
|
$ |
7,368 |
|
|
$ |
308 |
|
|
$ |
1,218 |
|
|
$ |
27,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended December 31,
2015 |
|
(in thousands)
|
|
Reserve for
Expected
Wind-Down
Costs |
|
|
Reserve for
Expected
Reporting
Costs |
|
|
Reserve for
Indenture
Trustee/Fiscal
and Paying
Agent Costs |
|
|
Reserve for
Residual
Wind-Down
Costs |
|
|
Total Reserves
for Expected
Costs of
Liquidation |
|
Balance, March 31, 2015
|
|
$ |
21,089 |
|
|
$ |
8,602 |
|
|
$ |
364 |
|
|
$ |
1,223 |
|
|
$ |
31,278 |
|
Plus additions to reserves
|
|
|
5,640 |
|
|
|
2,184 |
|
|
|
— |
|
|
|
— |
|
|
|
7,824 |
|
Less liquidation costs incurred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals
|
|
|
(4,474 |
) |
|
|
(1,852 |
) |
|
|
— |
|
|
|
(5 |
) |
|
|
(6,331 |
) |
Trust Governance
|
|
|
(2,675 |
) |
|
|
(1,350 |
) |
|
|
(56 |
) |
|
|
— |
|
|
|
(4,081 |
) |
Other Administrative Expenses
|
|
|
(881 |
) |
|
|
(216 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,097 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015
|
|
$ |
18,699 |
|
|
$ |
7,368 |
|
|
$ |
308 |
|
|
$ |
1,218 |
|
|
$ |
27,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
2014 |
|
(in thousands)
|
|
Reserve for
Expected
Wind-Down
Costs |
|
|
Reserve for
Expected
Reporting
Costs |
|
|
Reserve for
Indenture
Trustee/Fiscal
and Paying
Agent Costs |
|
|
Reserve for
Residual
Wind-Down
Costs |
|
|
Total Reserves
for Expected
Costs of
Liquidation |
|
Balance, September 30, 2014
|
|
$ |
22,042 |
|
|
$ |
9,663 |
|
|
$ |
408 |
|
|
$ |
1,234 |
|
|
$ |
33,347 |
|
Plus additions to reserves
|
|
|
2,952 |
|
|
|
248 |
|
|
|
— |
|
|
|
— |
|
|
|
3,200 |
|
Less liquidation costs incurred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals
|
|
|
(1,997 |
) |
|
|
(431 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
(2,432 |
) |
Trust Governance
|
|
|
(899 |
) |
|
|
(451 |
) |
|
|
(18 |
) |
|
|
— |
|
|
|
(1,368 |
) |
Other Administrative Expenses
|
|
|
(12 |
) |
|
|
(103 |
) |
|
|
— |
|
|
|
— |
|
|
|
(115 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014
|
|
$ |
22,086 |
|
|
$ |
8,926 |
|
|
$ |
390 |
|
|
$ |
1,230 |
|
|
$ |
32,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended December 31,
2014 |
|
(in thousands)
|
|
Reserve for
Expected
Wind-Down
Costs |
|
|
Reserve for
Expected
Reporting
Costs |
|
|
Reserve for
Indenture
Trustee/Fiscal
and Paying
Agent Costs |
|
|
Reserve for
Residual
Wind-Down
Costs |
|
|
Total Reserves
for Expected
Costs of
Liquidation |
|
Balance, March 31, 2014
|
|
$ |
22,529 |
|
|
$ |
12,235 |
|
|
$ |
464 |
|
|
$ |
1,258 |
|
|
$ |
36,486 |
|
Plus additions to (reductions in) reserves
|
|
|
7,629 |
|
|
|
(294 |
) |
|
|
— |
|
|
|
— |
|
|
|
7,335 |
|
Less liquidation costs incurred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals
|
|
|
(5,324 |
) |
|
|
(1,406 |
) |
|
|
— |
|
|
|
(28 |
) |
|
|
(6,758 |
) |
Trust Governance
|
|
|
(2,728 |
) |
|
|
(1,354 |
) |
|
|
(74 |
) |
|
|
— |
|
|
|
(4,156 |
) |
Other Administrative Expenses
|
|
|
(20 |
) |
|
|
(255 |
) |
|
|
— |
|
|
|
— |
|
|
|
(275 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014
|
|
$ |
22,086 |
|
|
$ |
8,926 |
|
|
$ |
390 |
|
|
$ |
1,230 |
|
|
$ |
32,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the three months ended December 31, 2015, estimates of
expected Wind-Down Costs and estimates of expected Reporting Costs
(for which there is a reasonable basis for estimation) decreased by
$1.6 million and $0.9 million, respectively. During the nine months
ended December 31, 2015, estimates of expected Wind-Down Costs
and estimates of expected Reporting Costs (for which there is a
reasonable basis for estimation) increased by $5.6 million and $2.2
million, respectively. During the three months ended
December 31, 2014, estimates of expected Wind-Down Costs and
estimates of expected Reporting Costs (for which there was a
reasonable basis for estimation) increased by $3.0 million and $0.2
million, respectively. During the nine months ended
December 31, 2014, estimates of expected Wind-Down Costs and
estimates of expected Reporting Costs (for which there was a
reasonable basis for estimation) increased by $7.6 million and
decreased by $0.3 million, respectively. Such revisions in the
estimates were recorded as additions to (reductions in) the
reserves for expected costs of liquidation in such periods. The GUC
Trust has recorded reserves for expected costs of liquidation that
represent amounts expected to be incurred over the estimated
remaining liquidation period of the GUC Trust for which there was a
reasonable basis for estimation as of December 31, 2015.
The amount of liquidation costs that will ultimately be incurred
depends both on the time period and on the extent of activities
required for the GUC Trust to complete its functions and
responsibilities under the Plan and the GUC Trust Agreement.
Significant uncertainty remains both as to that time period and as
to the extent of those activities. As of December 31, 2015,
the recorded reserves for expected costs of liquidation reflect
estimated costs for a remaining liquidation period extending
through October 2017, which has been estimated predominately on a
probability-weighted basis as permitted under U.S. GAAP and which
the GUC Trust believes is the most appropriate measurement basis
under the circumstances. Where an outcome is estimated to be
likely, the likely outcome has been used as the best estimate and
no weight has been given to the unlikely outcome. The remaining
liquidation period is dependent predominantly on the estimate of
the remaining period of time for resolution of the Term Loan
Avoidance Action, as well as certain additional estimated time as
necessary to wind down the GUC Trust. It is possible that future
developments in the Term Loan Avoidance Action could extend the
current estimate of such remaining period of time for resolution
and, therefore, extend the estimated remaining liquidation period
of the GUC Trust beyond October 2017. It is also possible that
future developments associated with the Proposed Agreement
described in Note 2 could result in a reduction in the estimate of
the remaining liquidation period. In addition, certain liquidation
costs that are expected to be prepaid by the GUC Trust upon its
dissolution have also been estimated and accrued. It is reasonably
possible that the GUC Trust’s estimates regarding the costs
and remaining liquidation period could change in the near term.
As described in Part II, Item 1, “Legal
Proceedings,” the GUC Trust is participating, as an
interested party, in litigation involving certain General Motors
vehicle recalls. While unlikely at this time, it is possible that
such litigation could extend the remaining liquidation period of
the GUC Trust beyond October 2017.
The following is a summary of the activity in the reserves for
Residual Wind-Down Claims for the three months ended
December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2015 |
|
|
2014 |
|
Balance, beginning of period
|
|
$ |
21,491 |
|
|
$ |
27,419 |
|
Less claims allowed during the period
|
|
|
(1,582 |
) |
|
|
(988 |
) |
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$ |
19,909 |
|
|
$ |
26,431 |
|
|
|
|
|
|
|
|
|
|
The following is a summary of the activity in the reserves for
Residual Wind-Down Claims for the nine months ended
December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2015 |
|
|
2014 |
|
Balance, beginning of period
|
|
$ |
25,406 |
|
|
$ |
28,698 |
|
Less claims allowed during the period
|
|
|
(5,497 |
) |
|
|
(2,267 |
) |
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$ |
19,909 |
|
|
$ |
26,431 |
|
|
|
|
|
|
|
|
|
|
|
X |
- DefinitionReserves for expected costs of liquidation and residual wind-down claims.
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v3.3.1.900
Income Tax Provision
|
9 Months Ended |
Dec. 31, 2015 |
Income Tax Disclosure [Abstract] |
|
Income Tax Provision |
There was no current tax benefit or provision for the three and
nine months ended December 31, 2015 and 2014 due to cumulative
net operating and capital losses, and no income taxes have been
paid by the GUC Trust. There also was no deferred tax benefit or
provision in such periods as a result of the establishment of a
full valuation allowance against net deferred tax assets at the
beginning and end of such periods.
Deferred taxes in the accompanying Condensed Statement of Net
Assets in Liquidation at December 31, 2015 are comprised of
the following components:
|
|
|
|
|
Deferred tax assets:
|
|
|
|
|
Reserves for expected costs of liquidation
|
|
$ |
8,806 |
|
Net operating and capital loss carryovers
|
|
|
110,797 |
|
|
|
|
|
|
Gross deferred tax assets
|
|
|
119,603 |
|
Less: Valuation allowance
|
|
|
(119,135 |
) |
|
|
|
|
|
Deferred tax asset, net of valuation allowance
|
|
|
468 |
|
Deferred tax liabilities:
|
|
|
|
|
Accrued investment income
|
|
|
(468 |
) |
|
|
|
|
|
Gross deferred tax liabilities
|
|
|
(468 |
) |
|
|
|
|
|
Net deferred taxes
|
|
$ |
— |
|
|
|
|
|
|
As previously disclosed, during the quarter ended
September 30, 2013, the GUC Trust made a determination to file
its U.S. federal income tax returns taking the position that
beneficial ownership for a substantial majority of New GM
Securities was transferred from MLC to the GUC Trust on
March 31, 2011, and that the tax basis of such New GM
Securities should be determined with reference to the value of such
securities on such date, instead of December 15, 2011, when
record ownership of the remaining New GM Securities still held by
MLC was transferred from MLC to the GUC Trust. For the remaining
substantial minority of New GM Securities transferred from MLC to
the GUC Trust, the GUC Trust determined that the transfer of
beneficial ownership occurred on other dates for which the tax
basis should be determined by reference to the value of such
securities on such dates. This new tax position resulted in an
increased tax basis of the New GM Securities from the prior tax
position and, therefore, reduced taxable gains and increased
taxable losses on distributions and sales of New GM Securities
since March 31, 2011. The new tax position has not been
sustained on examination by the Internal Revenue Service as of the
date hereof. However, the GUC Trust believes, based on the
available evidence and consultation with GUC Trust professionals,
that it is more likely than not that the new tax position will be
sustained on examination by the Internal Revenue Service based on
the technical merits of the position. Accordingly, this new tax
position has been recognized in any current and deferred income tax
liabilities and income tax provision in the GUC Trust’s
financial statements since the quarter ended September 30,
2013.
Following the GUC Trust’s determination to utilize the new
tax position set forth above, the GUC Trust filed its U.S. federal
income tax returns for the years ended March 31, 2015, 2014
and 2013 with the Internal Revenue Service using such new tax
position. Such tax returns were accompanied by requests for prompt
determination of tax liability pursuant to Section 505(b) of
the Bankruptcy Code, and the statutory notification period set
forth in Section 505(b) of the Bankruptcy Code with respect to
the GUC Trust’s U.S. federal income tax returns for the year
ended March 31, 2015 and prior years has expired. Accordingly,
the tax liabilities set forth in the GUC Trust’s U.S. federal
income tax returns for the year ended March 31, 2015 and prior
years are no longer subject to examination by the Internal Revenue
Service. However, remaining capital loss carryovers that were
generated in those years, combined with capital gains and losses
generated in the nine months ended December 31, 2015, from the
new tax position, which aggregate $182.4 million, along with net
operating loss carryovers generated through December 31, 2015
aggregating $97.3 million, could be subject to examination by the
Internal Revenue Service in subsequent years when those losses, if
any, are utilized. The capital loss carryovers begin to expire on
March 31, 2017 and the net operating loss carryovers begin to
expire on March 31, 2032. These loss carryovers in the
aggregate result in a deferred tax asset of $110.8 million
(reflected in the table above).
A full valuation allowance against net deferred tax assets
aggregating $119.1 million was established as of December 31,
2015 because the deferred tax assets are not realizable. Such
valuation allowance was decreased by $0.9 million and increased
$83.2 million from the full valuation allowance against net
deferred tax assets established as of September 30, 2015 and
March 31, 2015, respectively.
|
X |
- DefinitionThe entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690
Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319
Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319
Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319
Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319
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v3.3.1.900
Related Party Transactions
|
9 Months Ended |
Dec. 31, 2015 |
Related Party Transactions [Abstract] |
|
Related Party Transactions |
|
8. |
Related Party
Transactions |
In addition to serving as GUC Trust Administrator, Wilmington Trust
Company continues to serve as trustee pursuant to the indentures
for certain series of previously outstanding debt of MLC.
Wilmington Trust Company has received and will continue to receive
certain customary fees in amounts consistent with Wilmington Trust
Company’s standard rates for such service. The Bankruptcy
Court previously approved the creation of a segregated fund for the
purposes of funding such fees for Wilmington Trust Company, as well
as the other indenture trustees and fiscal and paying agents for
previously outstanding debt of MLC. There were no such fees for
Wilmington Trust Company in the three and nine months ended
December 31, 2015 and 2014.
In addition, Wilmington Trust Company has also entered into certain
arrangements with the GUC Trust pursuant to which it or its
affiliates have previously received, and may in the future receive,
reasonable and customary fees and commissions for services other
than services in the capacity of GUC Trust Administrator. Such
arrangements include the provision of custodial, investment
advisory and brokerage services to the GUC Trust. The fees and
commissions charged by Wilmington Trust Company and its affiliates
pursuant to these arrangements are consistent with the standard
fees and commissions charged by Wilmington Trust Company to
unrelated third parties in negotiated transactions. During the
three and nine months ended December 31, 2015, the total
amount of such fees and commissions was approximately $85,000 and
$150,000, respectively. During the three and nine months ended
December 31, 2014, the total amount of such fees and
commissions was approximately $5,000 and $17,000, respectively.
|
X |
- DefinitionThe entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864
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v3.3.1.900
Net Assets in Liquidation (Tables)
|
9 Months Ended |
Dec. 31, 2015 |
Text Block [Abstract] |
|
Schedule of Cash and Cash Equivalent and Marketable Securities |
As of December 31, 2015, cash and cash equivalents and
marketable securities aggregated $667.6 million and are comprised
of the following:
|
|
|
|
|
(in thousands) |
|
|
|
Distributable Cash (including associated Dividend Cash)
|
|
$ |
620,873 |
|
Residual Wind-Down Assets
|
|
|
22,167 |
|
Administrative Fund
|
|
|
8,233 |
|
Other Administrative Cash
|
|
|
15,790 |
|
Funds for Indenture Trustee/Fiscal Paying Agent Costs
|
|
|
319 |
|
Other
|
|
|
235 |
|
|
|
|
|
|
Total
|
|
$ |
667,617 |
|
|
|
|
|
|
|
Schedule of GUC Trust Units |
The following table presents the changes during the three months
ended December 31, 2015, in the numbers of GUC Trust Units
outstanding or which the GUC Trust was obligated to issue:
|
|
|
|
|
|
|
Trust Units |
|
Outstanding or issuable at September 30, 2015
|
|
|
31,853,702 |
|
Issued during the period
|
|
|
— |
|
Less: Issuable at beginning of period
|
|
|
— |
|
Add: Issuable at end of period (1)
|
|
|
56 |
|
|
|
|
|
|
Outstanding or issuable at December 31, 2015 (2)
|
|
|
31,853,758 |
|
|
|
|
|
|
(1) |
The number of GUC Trust Units
issuable at any time represents GUC Trust Units issuable in respect
of Allowed General Unsecured Claims that were newly allowed during
the fiscal quarter. |
(2) |
The number of GUC Trust Units
outstanding at any time represents GUC Trust Units issued in
respect of Allowed General Unsecured Claims that were allowed in
prior periods, including GUC Trust Units held by the GUC Trust for
the benefit of (a) holders of Allowed General Unsecured Claims
who had not yet supplied information required by the GUC Trust in
order to effect the initial distribution to which they are entitled
and (b) governmental entities that are precluded by applicable
law from receiving distributions of GUC Trust Units. |
|
Allowed and Disputed General Unsecured Claims and Potential Term Loan Avoidance Action Claims |
The following table presents a summary of activity with respect to
the Allowed and Disputed General Unsecured Claims and potential
Term Loan Avoidance Action Claims for the three months ended
December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Allowed General
Unsecured
Claims |
|
|
Disputed General
Unsecured
Claims |
|
|
Term Loan
Avoidance
Action
Claims |
|
|
Maximum
Amount of
Unresolved
Claims (1) |
|
|
Total Claim
Amount (2) |
|
Total, September 30, 2015
|
|
$ |
31,853,630 |
|
|
$ |
70,000 |
|
|
$ |
1,500,000 |
|
|
$ |
1,570,000 |
|
|
$ |
33,423,630 |
|
New Allowed General Unsecured Claims, net
|
|
|
55 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
55 |
|
Term Loan Avoidance Action Claims resolved
|
|
|
— |
|
|
|
— |
|
|
|
(55 |
) |
|
|
(55 |
) |
|
|
(55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total, December 31, 2015
|
|
$ |
31,853,685 |
|
|
$ |
70,000 |
|
|
$ |
1,499,945 |
|
|
$ |
1,569,945 |
|
|
$ |
33,423,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Maximum Amount of Unresolved Claims
represents the sum of Disputed General Unsecured Claims and Term
Loan Avoidance Action Claims. |
(2) |
Total Claim Amount represents the sum
of Allowed General Unsecured Claims and Maximum Amount of
Unresolved Claims. |
|
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v3.3.1.900
Liquidating Distributions (Tables)
|
9 Months Ended |
Dec. 31, 2015 |
Text Block [Abstract] |
|
Schedule of Liquidating Distributions |
Liquidating distributions in the three months ended
December 31, 2015 consisted of the following:
|
|
|
|
|
(in thousands) |
|
Fair Value |
|
Distributions during the three months ended December 31,
2015
|
|
$ |
129,990 |
|
Less: Liquidating distributions payable at September 30,
2015
|
|
|
(131,885 |
) |
Add: Liquidating distributions payable at December 31,
2015
|
|
|
4,612 |
|
|
|
|
|
|
Total
|
|
$ |
2,717 |
|
|
|
|
|
|
Liquidating distributions during the nine months ended
December 31, 2015, consisted of the following:
|
|
|
|
|
(in thousands) |
|
Fair Value |
|
Distributions during the nine months ended December 31,
2015
|
|
$ |
130,239 |
|
Less: Liquidating distributions payable at March 31, 2015
|
|
|
(7,714 |
) |
Add: Liquidating distributions payable at December 31,
2015
|
|
|
4,612 |
|
|
|
|
|
|
Total
|
|
$ |
127,137 |
|
|
|
|
|
|
|
X |
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v3.3.1.900
Fair Value Measurements (Tables)
|
9 Months Ended |
Dec. 31, 2015 |
Fair Value Disclosures [Abstract] |
|
Assets and Liabilities Measured at Fair Value on Recurring Basis |
The following table presents information about the GUC
Trust’s assets and liabilities measured at fair value on a
recurring basis at December 31, 2015 and March 31, 2015,
and the valuation techniques used by the GUC Trust to determine
those fair values.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
(in thousands)
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds
|
|
$ |
21,136 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
21,136 |
|
Marketable Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury bills
|
|
|
— |
|
|
|
637,179 |
|
|
|
— |
|
|
|
637,179 |
|
U.S. government agency securities
|
|
|
— |
|
|
|
5,994 |
|
|
|
— |
|
|
|
5,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$ |
21,136 |
|
|
$ |
643,173 |
|
|
$ |
— |
|
|
$ |
664,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidating distributions payable
|
|
$ |
4,612 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2015 |
|
(in thousands)
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds
|
|
$ |
19,150 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
19,150 |
|
Marketable Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal commercial paper and variable demand notes
|
|
|
— |
|
|
|
12,064 |
|
|
|
— |
|
|
|
12,064 |
|
Corporate commercial paper
|
|
|
— |
|
|
|
18,880 |
|
|
|
— |
|
|
|
18,880 |
|
Holdings of New GM Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New GM Common Stock
|
|
|
427,151 |
|
|
|
— |
|
|
|
— |
|
|
|
427,151 |
|
New GM Warrants
|
|
|
490,826 |
|
|
|
— |
|
|
|
— |
|
|
|
490,826 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$ |
937,127 |
|
|
$ |
30,944 |
|
|
$ |
— |
|
|
$ |
968,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidating distributions payable
|
|
$ |
7,714 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
7,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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- DefinitionTabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19190-110258
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|
v3.3.1.900
Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims (Tables)
|
9 Months Ended |
Dec. 31, 2015 |
Text Block [Abstract] |
|
Summary of Activity in Reserves for Expected Costs of Liquidation |
The following is a summary of the activity in the reserves for
expected costs of liquidation for the three and nine months ended
December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
2015 |
|
(in thousands)
|
|
Reserve for
Expected
Wind-Down
Costs |
|
|
Reserve for
Expected
Reporting
Costs |
|
|
Reserve for
Indenture
Trustee/Fiscal
and Paying
Agent Costs |
|
|
Reserve for
Residual
Wind-Down
Costs |
|
|
Total Reserves
for Expected
Costs of
Liquidation |
|
Balance, September 30, 2015
|
|
$ |
22,176 |
|
|
$ |
9,178 |
|
|
$ |
329 |
|
|
$ |
1,219 |
|
|
$ |
32,902 |
|
Less reductions in reserves
|
|
|
(1,555 |
) |
|
|
(919 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,474 |
) |
Less liquidation costs incurred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals
|
|
|
(1,093 |
) |
|
|
(358 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(1,452 |
) |
Trust Governance
|
|
|
(816 |
) |
|
|
(450 |
) |
|
|
(21 |
) |
|
|
— |
|
|
|
(1,287 |
) |
Other Administrative Expenses
|
|
|
(13 |
) |
|
|
(83 |
) |
|
|
— |
|
|
|
— |
|
|
|
(96 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015
|
|
$ |
18,699 |
|
|
$ |
7,368 |
|
|
$ |
308 |
|
|
$ |
1,218 |
|
|
$ |
27,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended December 31,
2015 |
|
(in thousands)
|
|
Reserve for
Expected
Wind-Down
Costs |
|
|
Reserve for
Expected
Reporting
Costs |
|
|
Reserve for
Indenture
Trustee/Fiscal
and Paying
Agent Costs |
|
|
Reserve for
Residual
Wind-Down
Costs |
|
|
Total Reserves
for Expected
Costs of
Liquidation |
|
Balance, March 31, 2015
|
|
$ |
21,089 |
|
|
$ |
8,602 |
|
|
$ |
364 |
|
|
$ |
1,223 |
|
|
$ |
31,278 |
|
Plus additions to reserves
|
|
|
5,640 |
|
|
|
2,184 |
|
|
|
— |
|
|
|
— |
|
|
|
7,824 |
|
Less liquidation costs incurred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals
|
|
|
(4,474 |
) |
|
|
(1,852 |
) |
|
|
— |
|
|
|
(5 |
) |
|
|
(6,331 |
) |
Trust Governance
|
|
|
(2,675 |
) |
|
|
(1,350 |
) |
|
|
(56 |
) |
|
|
— |
|
|
|
(4,081 |
) |
Other Administrative Expenses
|
|
|
(881 |
) |
|
|
(216 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,097 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015
|
|
$ |
18,699 |
|
|
$ |
7,368 |
|
|
$ |
308 |
|
|
$ |
1,218 |
|
|
$ |
27,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
2014 |
|
(in thousands)
|
|
Reserve for
Expected
Wind-Down
Costs |
|
|
Reserve for
Expected
Reporting
Costs |
|
|
Reserve for
Indenture
Trustee/Fiscal
and Paying
Agent Costs |
|
|
Reserve for
Residual
Wind-Down
Costs |
|
|
Total Reserves
for Expected
Costs of
Liquidation |
|
Balance, September 30, 2014
|
|
$ |
22,042 |
|
|
$ |
9,663 |
|
|
$ |
408 |
|
|
$ |
1,234 |
|
|
$ |
33,347 |
|
Plus additions to reserves
|
|
|
2,952 |
|
|
|
248 |
|
|
|
— |
|
|
|
— |
|
|
|
3,200 |
|
Less liquidation costs incurred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals
|
|
|
(1,997 |
) |
|
|
(431 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
(2,432 |
) |
Trust Governance
|
|
|
(899 |
) |
|
|
(451 |
) |
|
|
(18 |
) |
|
|
— |
|
|
|
(1,368 |
) |
Other Administrative Expenses
|
|
|
(12 |
) |
|
|
(103 |
) |
|
|
— |
|
|
|
— |
|
|
|
(115 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014
|
|
$ |
22,086 |
|
|
$ |
8,926 |
|
|
$ |
390 |
|
|
$ |
1,230 |
|
|
$ |
32,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended December 31,
2014 |
|
(in thousands)
|
|
Reserve for
Expected
Wind-Down
Costs |
|
|
Reserve for
Expected
Reporting
Costs |
|
|
Reserve for
Indenture
Trustee/Fiscal
and Paying
Agent Costs |
|
|
Reserve for
Residual
Wind-Down
Costs |
|
|
Total Reserves
for Expected
Costs of
Liquidation |
|
Balance, March 31, 2014
|
|
$ |
22,529 |
|
|
$ |
12,235 |
|
|
$ |
464 |
|
|
$ |
1,258 |
|
|
$ |
36,486 |
|
Plus additions to (reductions in) reserves
|
|
|
7,629 |
|
|
|
(294 |
) |
|
|
— |
|
|
|
— |
|
|
|
7,335 |
|
Less liquidation costs incurred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust Professionals
|
|
|
(5,324 |
) |
|
|
(1,406 |
) |
|
|
— |
|
|
|
(28 |
) |
|
|
(6,758 |
) |
Trust Governance
|
|
|
(2,728 |
) |
|
|
(1,354 |
) |
|
|
(74 |
) |
|
|
— |
|
|
|
(4,156 |
) |
Other Administrative Expenses
|
|
|
(20 |
) |
|
|
(255 |
) |
|
|
— |
|
|
|
— |
|
|
|
(275 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2014
|
|
$ |
22,086 |
|
|
$ |
8,926 |
|
|
$ |
390 |
|
|
$ |
1,230 |
|
|
$ |
32,632 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Activity in Reserves for Residual Wind-Down Claims |
The following is a summary of the activity in the reserves for
Residual Wind-Down Claims for the three months ended
December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2015 |
|
|
2014 |
|
Balance, beginning of period
|
|
$ |
21,491 |
|
|
$ |
27,419 |
|
Less claims allowed during the period
|
|
|
(1,582 |
) |
|
|
(988 |
) |
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$ |
19,909 |
|
|
$ |
26,431 |
|
|
|
|
|
|
|
|
|
|
The following is a summary of the activity in the reserves for
Residual Wind-Down Claims for the nine months ended
December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2015 |
|
|
2014 |
|
Balance, beginning of period
|
|
$ |
25,406 |
|
|
$ |
28,698 |
|
Less claims allowed during the period
|
|
|
(5,497 |
) |
|
|
(2,267 |
) |
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$ |
19,909 |
|
|
$ |
26,431 |
|
|
|
|
|
|
|
|
|
|
|
X |
- DefinitionSummary of activity in reserves for expected costs of liquidation including expected reporting costs.
+ References
+ Details
Name: |
mtlqq_SummaryOfActivityInReservesForExpectedCostsOfLiquidationTableTextBlock |
Namespace Prefix: |
mtlqq_ |
Data Type: |
nonnum:textBlockItemType |
Balance Type: |
na |
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v3.3.1.900
Income Tax Provision (Tables)
|
9 Months Ended |
Dec. 31, 2015 |
Income Tax Disclosure [Abstract] |
|
Summary of Deferred Taxes |
Deferred taxes in the accompanying Condensed Statement of Net
Assets in Liquidation at December 31, 2015 are comprised of
the following components:
|
|
|
|
|
Deferred tax assets:
|
|
|
|
|
Reserves for expected costs of liquidation
|
|
$ |
8,806 |
|
Net operating and capital loss carryovers
|
|
|
110,797 |
|
|
|
|
|
|
Gross deferred tax assets
|
|
|
119,603 |
|
Less: Valuation allowance
|
|
|
(119,135 |
) |
|
|
|
|
|
Deferred tax asset, net of valuation allowance
|
|
|
468 |
|
Deferred tax liabilities:
|
|
|
|
|
Accrued investment income
|
|
|
(468 |
) |
|
|
|
|
|
Gross deferred tax liabilities
|
|
|
(468 |
) |
|
|
|
|
|
Net deferred taxes
|
|
$ |
— |
|
|
|
|
|
|
X |
- DefinitionTabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.
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v3.3.1.900
Description of Trust and Reporting Policies - Additional Information (Detail) - New GM Common Stock [Member] - USD ($) $ / shares in Units, $ in Millions |
Aug. 05, 2015 |
Jul. 07, 2015 |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] |
|
|
Number of converted New GM Series A Warrants |
|
10,352,556
|
Number of shares of New GM Common Stock received in conversion of New GM Series A Warrants |
|
7,407,155
|
Number of converted New GM Series B Warrants |
|
10,352,556
|
Number of shares of New GM Common Stock received in conversion of New GM Series B Warrants |
|
4,953,635
|
Net proceeds from the liquidation of New GM Securities |
$ 741.7
|
|
Conversion rate for New GM Series A Warrants into New GM Common Stock |
|
71.549%
|
Conversion rate for New GM Series B Warrants into New GM Common Stock |
|
47.849%
|
Net weighted average sales price, net of expenses, for New GM Common Stock sold after June 30, 2015 |
$ 31.23
|
|
X |
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v3.3.1.900
Plan of Liquidation - Additional Information (Detail) - USD ($)
|
3 Months Ended |
9 Months Ended |
52 Months Ended |
57 Months Ended |
|
|
|
Dec. 31, 2015 |
Dec. 31, 2015 |
Aug. 05, 2015 |
Dec. 31, 2015 |
Mar. 31, 2012 |
Dec. 15, 2011 |
Mar. 31, 2011 |
Class of Warrant or Right [Line Items] |
|
|
|
|
|
|
|
Allowed General Unsecured Claims |
|
|
|
|
|
|
$ 29,771,000,000
|
Disputed General Unsecured Claims |
$ 20,000,000
|
$ 20,000,000
|
|
$ 20,000,000
|
|
|
8,154,000,000
|
Total aggregate amount of general unsecured claims, both allowed and disputed inclusive of potential Term Loan Avoidance Action Claims |
|
|
|
|
|
|
39,425,000,000
|
Reserve for Disputed General Unsecured Claims |
50,000,000
|
50,000,000
|
|
50,000,000
|
|
|
|
Amount of Term Loan Avoidance Action |
|
|
|
|
|
|
1,500,000,000
|
Dividends received |
|
|
$ 24,700,000
|
|
|
|
|
Contribution from MLC |
|
|
|
|
|
|
52,700,000
|
Remaining Administrative Fund designated for identified costs and liabilities |
8,000,000
|
8,000,000
|
|
8,000,000
|
|
|
|
Initial Reporting Cash |
|
|
|
|
|
|
$ 5,700,000
|
Appropriated Distributable Cash |
12,000,000
|
|
|
|
|
|
|
Aggregate Other Administrative Cash |
15,800,000
|
15,800,000
|
|
15,800,000
|
|
|
|
Distributable Cash set aside for projected Trust fees, costs and expenses |
46,600,000
|
46,600,000
|
|
46,600,000
|
|
|
|
Distributable Cash set aside for potential income taxes on dividends received on Holdings of Common Stock |
2,300,000
|
2,300,000
|
|
2,300,000
|
|
|
|
Distributable Cash set aside for potential Taxes on Distribution |
109,700,000
|
109,700,000
|
|
109,700,000
|
|
|
|
Capital loss carryovers |
182,400,000
|
182,400,000
|
|
182,400,000
|
|
|
|
Net operating loss carryovers |
97,300,000
|
97,300,000
|
|
97,300,000
|
|
|
|
Residual Wind-Down Assets |
|
|
|
|
|
$ 42,800,000
|
|
Residual Wind-Down Assets cash and cash equivalents and marketable securities |
|
|
|
|
|
40,000,000
|
|
Cash received to fund Avoidance Action Defense Costs |
|
|
|
|
|
1,400,000
|
|
Residual wind-down assets transferred benefit in prepaid expenses |
|
|
|
|
|
2,800,000
|
|
Avoidance action defense costs in excess of corresponding cash |
9,500,000
|
9,500,000
|
|
9,500,000
|
|
|
|
Residual Wind-Down Assets held by the GUC Trust aggregated |
22,300,000
|
22,300,000
|
|
22,300,000
|
|
|
|
Remaining Residual Wind-Down Claims |
500,000
|
500,000
|
|
500,000
|
|
|
|
Cash received for funding Indenture Trustee Fiscal and Paying Agent Costs and Reporting Costs |
|
|
|
|
|
3,400,000
|
|
Funds for Indenture Trustee/Fiscal Paying Agent Costs |
300,000
|
300,000
|
|
300,000
|
|
|
|
Cash received for indenture trustee and paying agent costs |
|
|
|
|
|
1,400,000
|
|
Cash received for reporting cash |
|
|
|
|
|
$ 2,000,000
|
|
Avoidance Action Trust Proposed Agreement [Member] |
|
|
|
|
|
|
|
Class of Warrant or Right [Line Items] |
|
|
|
|
|
|
|
Term loan avoidance action claims allowed |
55,000
|
|
|
|
|
|
|
Proposed remaining potential liability of GUC Trust for Term Loan Avoidance Action Claims |
|
75,000,000
|
|
|
|
|
|
Proposed cash payment to Avoidance Action Trust |
|
$ 75,000,000
|
|
|
|
|
|
New GM Series A Warrants [Member] |
|
|
|
|
|
|
|
Class of Warrant or Right [Line Items] |
|
|
|
|
|
|
|
Distributable assets number of securities called by warrants |
|
|
|
|
|
|
136,363,635
|
Exercise price per share |
|
|
|
|
|
|
$ 10.00
|
Warrants expiration date |
|
Jul. 10, 2016
|
|
|
|
|
|
Number of securities sold to fund costs and expenses |
|
|
948,887
|
|
|
|
|
New GM Series B Warrants [Member] |
|
|
|
|
|
|
|
Class of Warrant or Right [Line Items] |
|
|
|
|
|
|
|
Distributable assets number of securities called by warrants |
|
|
|
|
|
|
136,363,635
|
Exercise price per share |
|
|
|
|
|
|
$ 18.33
|
Warrants expiration date |
|
Jul. 10, 2019
|
|
|
|
|
|
Number of securities sold to fund costs and expenses |
|
|
948,887
|
|
|
|
|
New GM Securities [Member] |
|
|
|
|
|
|
|
Class of Warrant or Right [Line Items] |
|
|
|
|
|
|
|
Aggregate sales of new GM Securities to fund costs and expenses |
|
|
|
61,700,000
|
|
|
|
Aggregate dividend cash associated with sales of New GM Securities to fund costs |
|
|
$ 200,000
|
|
|
|
|
Cash and Cash Equivalents and Marketable Securities [Member] |
|
|
|
|
|
|
|
Class of Warrant or Right [Line Items] |
|
|
|
|
|
|
|
Remaining Administrative Fund aggregated |
8,233,000
|
$ 8,233,000
|
|
8,233,000
|
|
|
|
Aggregate Other Administrative Cash |
15,790,000
|
15,790,000
|
|
15,790,000
|
|
|
|
Residual Wind-Down Assets |
22,167,000
|
22,167,000
|
|
22,167,000
|
|
|
|
Residual Wind-Down Assets held by the GUC Trust aggregated |
22,200,000
|
22,200,000
|
|
22,200,000
|
|
|
|
Funds for Indenture Trustee/Fiscal Paying Agent Costs |
319,000
|
319,000
|
|
319,000
|
|
|
|
Other Assets And Deposits [Member] |
|
|
|
|
|
|
|
Class of Warrant or Right [Line Items] |
|
|
|
|
|
|
|
Residual Wind-Down Assets held by the GUC Trust aggregated |
$ 100,000
|
$ 100,000
|
|
$ 100,000
|
|
|
|
New GM Common Stock [Member] |
|
|
|
|
|
|
|
Class of Warrant or Right [Line Items] |
|
|
|
|
|
|
|
Distributable assets number of securities |
|
|
|
|
|
|
150,000,000
|
Securities authorized for sale |
|
|
|
|
$ 13,700,000
|
|
|
Number of securities sold to fund costs and expenses |
|
|
1,043,801
|
|
|
|
|
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- DefinitionExpiration date of warrants held.
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v3.3.1.900
Net Assets in Liquidation - Additional Information (Detail)
|
|
3 Months Ended |
|
Mar. 31, 2011
USD ($)
Unit
|
Dec. 31, 2015
USD ($)
|
Mar. 31, 2015
USD ($)
|
Net Assets in Liquidation [Line Items] |
|
|
|
Distributable Assets |
|
$ 462,700,000
|
|
Cash and cash equivalents and marketable securities |
|
667,600,000
|
|
Liquidating distributions payable in Distributable Cash for Excess GUC Trust Distributable Assets |
|
2,700,000
|
|
Distributable Cash set aside for projected Trust fees, costs and expenses |
|
46,600,000
|
|
Distributable Cash set aside for projected Dividend Taxes and Investment Income Taxes |
|
2,300,000
|
|
Distributable Cash set aside for potential Taxes on Distribution |
|
109,700,000
|
|
Distributable cash pending distribution or set aside and not available for distribution |
|
160,900,000
|
|
Number of Trust Units issued per thousand dollars of allowed general unsecured claims | Unit |
1
|
|
|
Amount required to issue one Trust Unit per contingent rights |
$ 1,000
|
|
|
Avoidance Action Trust Proposed Agreement [Member] |
|
|
|
Net Assets in Liquidation [Line Items] |
|
|
|
Term loan avoidance action claims allowed |
|
55,000
|
|
Liquidation Basis of Accounting [Member] |
|
|
|
Net Assets in Liquidation [Line Items] |
|
|
|
Liquidating distributions payable |
|
$ 4,612,000
|
$ 7,714,000
|
Accrued Dividends on Holdings of New GM Common Stock |
|
|
26,524,000
|
Dividend Expected To Be Declared [Member] | Liquidation Basis of Accounting [Member] |
|
|
|
Net Assets in Liquidation [Line Items] |
|
|
|
Accrued Dividends on Holdings of New GM Common Stock |
|
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$ 22,400,000
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Net Assets in Liquidation - Schedule of Cash and Cash Equivalent and Marketable Securities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 15, 2011 |
Cash and Cash Equivalents [Line Items] |
|
|
Residual Wind-Down Assets |
|
$ 42,800
|
Other Administrative Cash |
$ 15,800
|
|
Funds for Indenture Trustee/Fiscal Paying Agent Costs |
300
|
|
Total |
667,600
|
|
Cash and Cash Equivalents and Marketable Securities [Member] |
|
|
Cash and Cash Equivalents [Line Items] |
|
|
Distributable Cash (including associated Dividend Cash) |
620,873
|
|
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22,167
|
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Administrative Fund |
8,233
|
|
Other Administrative Cash |
15,790
|
|
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319
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|
Other |
235
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|
Total |
$ 667,617
|
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Net Assets in Liquidation - Allowed and Disputed General Unsecured Claims and Potential Term Loan Avoidance Action Claims (Detail)
|
3 Months Ended |
Dec. 31, 2015
USD ($)
|
Extinguishment of Debt [Line Items] |
|
Beginning balance |
$ 33,423,630,000
|
New Allowed General Unsecured Claims, net |
55,000
|
Term Loan Avoidance Action Claims resolved |
(55,000)
|
Ending balance |
33,423,630,000
|
Allowed General Unsecured Claims [Member] |
|
Extinguishment of Debt [Line Items] |
|
Beginning balance |
31,853,630,000
|
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55,000
|
Ending balance |
31,853,685,000
|
Disputed General Unsecured Claims [Member] |
|
Extinguishment of Debt [Line Items] |
|
Beginning balance |
70,000,000
|
Ending balance |
70,000,000
|
Term Loan Avoidance Action Claims [Member] |
|
Extinguishment of Debt [Line Items] |
|
Beginning balance |
1,500,000,000
|
Term Loan Avoidance Action Claims resolved |
(55,000)
|
Ending balance |
1,499,945,000
|
Maximum Amount of Unresolved Claims [Member] |
|
Extinguishment of Debt [Line Items] |
|
Beginning balance |
1,570,000,000
|
Term Loan Avoidance Action Claims resolved |
(55,000)
|
Ending balance |
$ 1,569,945,000
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Liquidating Distributions - Schedule of Liquidating Distributions (Detail) - Liquidation Basis of Accounting [Member] - USD ($) $ in Thousands |
3 Months Ended |
9 Months Ended |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Distribution Made to Limited Liability Company (LLC) Member [Line Items] |
|
|
|
|
Distributions during the period |
$ 129,990
|
|
$ 130,239
|
|
Less: Liquidating distributions payable at beginning of period |
(131,885)
|
|
(7,714)
|
|
Add: Liquidating distributions payable at end of period |
4,612
|
|
4,612
|
|
Total |
$ 2,717
|
$ (2,090)
|
$ 127,137
|
$ 208,110
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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Liquidation Basis of Accounting [Member] - USD ($) $ in Thousands |
Dec. 31, 2015 |
Mar. 31, 2015 |
LIABILITIES |
|
|
Liquidating distributions payable |
$ 4,612
|
$ 7,714
|
Fair Value, Measurements, Recurring [Member] |
|
|
ASSETS |
|
|
Total Assets |
664,309
|
968,071
|
LIABILITIES |
|
|
Liquidating distributions payable |
4,612
|
7,714
|
Fair Value, Measurements, Recurring [Member] | Cash Equivalents [Member] | Money Market Funds [Member] |
|
|
ASSETS |
|
|
Total Assets |
21,136
|
19,150
|
Fair Value, Measurements, Recurring [Member] | Marketable Securities [Member] | U.S. Treasury Bills [Member] |
|
|
ASSETS |
|
|
Total Assets |
637,179
|
|
Fair Value, Measurements, Recurring [Member] | Marketable Securities [Member] | U.S. Government Agency Securities [Member] |
|
|
ASSETS |
|
|
Total Assets |
5,994
|
|
Fair Value, Measurements, Recurring [Member] | Marketable Securities [Member] | Municipal Commercial Paper and Variable Demand Notes [Member] |
|
|
ASSETS |
|
|
Total Assets |
|
12,064
|
Fair Value, Measurements, Recurring [Member] | Marketable Securities [Member] | Corporate Commercial Paper [Member] |
|
|
ASSETS |
|
|
Total Assets |
|
18,880
|
Fair Value, Measurements, Recurring [Member] | Holdings of New GM Securities [Member] | New GM Common Stock [Member] |
|
|
ASSETS |
|
|
Total Assets |
|
427,151
|
Fair Value, Measurements, Recurring [Member] | Holdings of New GM Securities [Member] | New GM Warrants [Member] |
|
|
ASSETS |
|
|
Total Assets |
|
490,826
|
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] |
|
|
ASSETS |
|
|
Total Assets |
21,136
|
937,127
|
LIABILITIES |
|
|
Liquidating distributions payable |
4,612
|
7,714
|
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Cash Equivalents [Member] | Money Market Funds [Member] |
|
|
ASSETS |
|
|
Total Assets |
21,136
|
19,150
|
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Holdings of New GM Securities [Member] | New GM Common Stock [Member] |
|
|
ASSETS |
|
|
Total Assets |
|
427,151
|
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Holdings of New GM Securities [Member] | New GM Warrants [Member] |
|
|
ASSETS |
|
|
Total Assets |
|
490,826
|
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] |
|
|
ASSETS |
|
|
Total Assets |
643,173
|
30,944
|
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Marketable Securities [Member] | U.S. Treasury Bills [Member] |
|
|
ASSETS |
|
|
Total Assets |
637,179
|
|
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Marketable Securities [Member] | U.S. Government Agency Securities [Member] |
|
|
ASSETS |
|
|
Total Assets |
$ 5,994
|
|
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Marketable Securities [Member] | Municipal Commercial Paper and Variable Demand Notes [Member] |
|
|
ASSETS |
|
|
Total Assets |
|
12,064
|
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Marketable Securities [Member] | Corporate Commercial Paper [Member] |
|
|
ASSETS |
|
|
Total Assets |
|
$ 18,880
|
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v3.3.1.900
Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims - Summary of Activity in Reserves for Expected Costs of Liquidation (Detail) - USD ($) $ in Thousands |
3 Months Ended |
9 Months Ended |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Restructuring Cost and Reserve [Line Items] |
|
|
|
|
Beginning Balance |
$ 32,902
|
$ 33,347
|
$ 31,278
|
$ 36,486
|
Plus additions to (reductions in) reserves |
(2,474)
|
3,200
|
7,824
|
7,335
|
Less liquidation costs incurred : |
|
|
|
|
Ending Balance |
27,593
|
32,632
|
27,593
|
32,632
|
Liquidation Basis of Accounting [Member] | Trust Professionals [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
(1,452)
|
(2,432)
|
(6,331)
|
(6,758)
|
Liquidation Basis of Accounting [Member] | Trust Governance [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
(1,287)
|
(1,368)
|
(4,081)
|
(4,156)
|
Liquidation Basis of Accounting [Member] | Other Administrative Expenses [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
(96)
|
(115)
|
(1,097)
|
(275)
|
Reserve for Expected Wind-Down Costs [Member] |
|
|
|
|
Restructuring Cost and Reserve [Line Items] |
|
|
|
|
Beginning Balance |
22,176
|
22,042
|
21,089
|
22,529
|
Plus additions to (reductions in) reserves |
(1,555)
|
2,952
|
5,640
|
7,629
|
Less liquidation costs incurred : |
|
|
|
|
Ending Balance |
18,699
|
22,086
|
18,699
|
22,086
|
Reserve for Expected Wind-Down Costs [Member] | Liquidation Basis of Accounting [Member] | Trust Professionals [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
(1,093)
|
(1,997)
|
(4,474)
|
(5,324)
|
Reserve for Expected Wind-Down Costs [Member] | Liquidation Basis of Accounting [Member] | Trust Governance [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
(816)
|
(899)
|
(2,675)
|
(2,728)
|
Reserve for Expected Wind-Down Costs [Member] | Liquidation Basis of Accounting [Member] | Other Administrative Expenses [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
(13)
|
(12)
|
(881)
|
(20)
|
Reserve for Expected Reporting Costs [Member] |
|
|
|
|
Restructuring Cost and Reserve [Line Items] |
|
|
|
|
Beginning Balance |
9,178
|
9,663
|
8,602
|
12,235
|
Plus additions to (reductions in) reserves |
(919)
|
248
|
2,184
|
(294)
|
Less liquidation costs incurred : |
|
|
|
|
Ending Balance |
7,368
|
8,926
|
7,368
|
8,926
|
Reserve for Expected Reporting Costs [Member] | Liquidation Basis of Accounting [Member] | Trust Professionals [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
(358)
|
(431)
|
(1,852)
|
(1,406)
|
Reserve for Expected Reporting Costs [Member] | Liquidation Basis of Accounting [Member] | Trust Governance [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
(450)
|
(451)
|
(1,350)
|
(1,354)
|
Reserve for Expected Reporting Costs [Member] | Liquidation Basis of Accounting [Member] | Other Administrative Expenses [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
(83)
|
(103)
|
(216)
|
(255)
|
Reserve for Indenture Trustee/Fiscal and Paying Agent Costs [Member] |
|
|
|
|
Restructuring Cost and Reserve [Line Items] |
|
|
|
|
Beginning Balance |
329
|
408
|
364
|
464
|
Less liquidation costs incurred : |
|
|
|
|
Ending Balance |
308
|
390
|
308
|
390
|
Reserve for Indenture Trustee/Fiscal and Paying Agent Costs [Member] | Liquidation Basis of Accounting [Member] | Trust Governance [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
(21)
|
(18)
|
(56)
|
(74)
|
Reserve for Residual Wind-Down Costs [Member] |
|
|
|
|
Restructuring Cost and Reserve [Line Items] |
|
|
|
|
Beginning Balance |
1,219
|
1,234
|
1,223
|
1,258
|
Less liquidation costs incurred : |
|
|
|
|
Ending Balance |
1,218
|
1,230
|
1,218
|
1,230
|
Reserve for Residual Wind-Down Costs [Member] | Liquidation Basis of Accounting [Member] | Trust Professionals [Member] |
|
|
|
|
Less liquidation costs incurred : |
|
|
|
|
Liquidation costs incurred |
$ (1)
|
$ (4)
|
$ (5)
|
$ (28)
|
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v3.3.1.900
Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended |
9 Months Ended |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Restructuring Cost and Reserve [Line Items] |
|
|
|
|
Net increase (decrease in) additions to reserves for Expected Costs of Liquidation |
$ (2,474)
|
$ 3,200
|
$ 7,824
|
$ 7,335
|
Expected liquidation period |
|
|
2017-10
|
|
Reserve for Expected Wind-Down Costs [Member] |
|
|
|
|
Restructuring Cost and Reserve [Line Items] |
|
|
|
|
Net increase (decrease in) additions to reserves for Expected Costs of Liquidation |
(1,555)
|
2,952
|
$ 5,640
|
7,629
|
Reserve for Expected Reporting Costs [Member] |
|
|
|
|
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|
|
|
|
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$ (919)
|
$ 248
|
$ 2,184
|
$ (294)
|
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v3.3.1.900
Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims - Summary of Activity in Reserves for Residual Wind-Down Claims (Detail) - Liquidation Basis of Accounting [Member] - USD ($) $ in Thousands |
3 Months Ended |
9 Months Ended |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Restructuring Cost and Reserve [Line Items] |
|
|
|
|
Balance, beginning of period |
$ 21,491
|
$ 27,419
|
$ 25,406
|
$ 28,698
|
Less claims allowed during the period |
(1,582)
|
(988)
|
(5,497)
|
(2,267)
|
Balance, end of period |
$ 19,909
|
$ 26,431
|
$ 19,909
|
$ 26,431
|
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v3.3.1.900
Income Tax Provision - Additional Information (Detail) - USD ($)
|
3 Months Ended |
9 Months Ended |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Income Tax Disclosure [Abstract] |
|
|
|
|
Current tax benefit or provision |
$ 0
|
$ 0
|
$ 0
|
$ 0
|
Income taxes paid |
0
|
0
|
0
|
0
|
Deferred tax benefit or provision |
0
|
$ 0
|
0
|
$ 0
|
Capital losses carryovers |
182,400,000
|
|
182,400,000
|
|
Net operating loss carryovers |
97,300,000
|
|
$ 97,300,000
|
|
Capital loss carryovers begin to expire |
|
|
Mar. 31, 2017
|
|
Net operating loss carryovers begin to expire |
|
|
Mar. 31, 2032
|
|
Deferred tax asset |
110,797,000
|
|
$ 110,797,000
|
|
Change in valuation allowance against net deferred tax assets |
(900,000)
|
|
83,200,000
|
|
Deferred tax assets, valuation allowance |
$ 119,135,000
|
|
$ 119,135,000
|
|
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