George L. Miller, Trustee

Eight Penn Center, Suite 950

1628 John F. Kennedy Boulevard

Philadelphia, PA 19103

 

Phone: (215) 561-0950

Fax: (215) 561-0330

Email: [email protected]

 

 

June 11, 2013

 

STATUS UPDATE #33

 

NOTE: The Status Updates are cumulative. Please read all thirty-three updates.

 

Bankruptcy Court Action

 

The Bankruptcy Trustee has settled the Litigation against Berkshire Group L.P., Ocwen Loan Servicing, LLC and Michael W. Trickey. The only remaining Defendant is Greenwich Capital Financial Products, Inc. ("Greenwich"). The Bankruptcy Trustee is currently negotiating with Greenwich in order to settle the Bankruptcy Court adversary action. The Bankruptcy Trustee is optimistic that a settlement can be reached so that no further litigation is necessary.

 

Interest Only Strips ("I/O Strips")

 

The Interest Only Strips must be sold. The Bankruptcy Trustee has engaged Boston Portfolio Advisors to assist the Bankruptcy Trustee and Greenwich in the disposal of these I/O Strips. These I/O Strips are commonly referred to as being toxic much like environmentally contaminated property because of adverse tax consequences caused by the I/O Strips. The disposal of the I/O Strips may have tax ramifications for the Bankruptcy Estate. The resolution of the tax ramifications must occur prior to any distribution to general unsecured creditors.

 

Noteholder Claims

 

The Bankruptcy Trustee has paid to Wells Fargo and Law Debenture, the Indenture Trustees for the Senior Collateralized Noteholders $40,000,000.

 

There have been no distributions to U.S. Bank who is the Indenture Trustee for the Unsecured Noteholders. As discussed above, no distributions to unsecured creditors can be made until the post-petition tax obligations, if any, are resolved.

 

Should you have any questions regarding this bankruptcy, please contact your Indenture Trustee. The Indenture Trustee contact information is listed in Status Update #29 and can also be found at www.abfsonline.com.

 

Claims Reconciliation

 

Substantially, all claims objections for individual Noteholders have been resolved and any payments to Noteholders will be made by the Indenture Trustee for the respective Noteholder Trust Indenture. The Bankruptcy Trustee will pay any prorated distributions of unsecured Noteholder claims to the Indenture Trustee for the respective Noteholder Trust Indenture.

 

In the upcoming months, the Bankruptcy Trustee will be filing claim objections of approximately $1.6 billion. The majority of these claim objections are to duplicative claims filed by claimants. After the resolution of potential tax obligations related to the I/O Strips referred to above and the substantial completion of the claims objection process, the Bankruptcy Trustee may be in a position to make additional interim distributions for the benefit of general unsecured creditors.