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LIQUIDATING TRUST FINAL REPORTS AND TERMINATION
ATTENTION: BENEFICIARIES OF THE DBSI LIQUIDATING TRUSTS

On August 31, 2017, the Trustee for the DBSI Liquidating Trust and the DBSI Real Estate Liquidating Trust (the “Liquidating Trusts”) filed Final Reports for the Liquidating Trusts. Along with the Final Reports, the Trustee filed a Motion seeking (a) approval for the Final Reports, (b) authorization to terminate the Liquidating Trusts, and (c) certain related relief. (The Final Reports are attached as Exhibits 1 and 2 to the Motion.)

As explained in the Final Reports, the Trustee has completed the liquidation of all non-litigation assets of the Liquidating Trusts. The only remaining assets held by the Liquidating Trusts are beneficial interests in the Private Actions Trust and the Estate Litigation Trust.

The Trustee has determined that the Liquidating Trusts are unlikely to receive any further distribution on account of their interests in the Private Actions Trust, and that any further meaningful distribution on account of the Liquidating Trusts’ interests in the Estate Litigation Trust is not likely to be made until 2018 at the earliest.

Accordingly, the Trustee determined that it would be most efficient and economical to (i) make a Final Distribution to each of the Liquidating Trusts in the Spring of 2017*, (ii) file the Final Reports in order to terminate the Liquidating Trusts prior to the end of 2017, (iii) abandon the Liquidating Trusts’ interests in the Private Actions Trust, and (iv) disburse the Liquidating Trusts’ interest in the Estate Litigation Trust directly to the creditor beneficiaries of the Liquidating Trusts in conjunction with the termination of the Trust, such that any future funds available for distribution from the Estate Litigation Trust would be disbursed directly to the underlying creditor beneficiaries.**


* Certain creditors whose distributions from the DBSI Liquidating Trust previously had been reserved (either because the total amount of some or all interim distributions was less than $100 or for various other reasons) will receive their FINAL distribution in September 2017).

** Schedule 12 creditors who received a Limited Beneficial Interest in the DBSI Real Estate Liquidating Trust will continue to have the right to share in 60% of the distributable proceeds from the Estate Litigation Trust on a pro rata basis with all of the other DBSI Real Estate Liquidating Trust beneficiaries.


Therefore, the distributions made by the Liquidating Trusts in 2017 are the FINAL distributions from the Liquidation Trust*.

The Trustee anticipates mailing 2017 grantor tax letters to the beneficiaries of the Liquidating Trusts in 4th Quarter of 2017. The 2017 grantor tax letters from the Liquidating Trusts will be the FINAL grantor tax letters for the Liquidating Trusts.

However, beneficiaries of the Liquidating Trusts also will receive tax reporting for 2017 and later tax years from the Estate Litigation Trust. In addition, the Estate Litigation Trust may make a distribution to the beneficiaries of the Liquidating Trusts if sufficient proceeds become available. Due to the uncertainties of litigation, it is not possible to predict the timing or amount of any distribution from the Estate Litigation Trust to the Liquidating Trusts’ beneficiaries.

Additional information will be provided in the 2017 grantor tax letters for the Liquidating Trusts, as well as 2017 grantor tax letters for the Estate Litigation Trust (which will not be mailed until 2018). In addition, the FAQ section of this website will be updated periodically with further information as it becomes available.

The Trustee and his professional staff thank you for your patience throughout this process.



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