Distributions

Valley Mortgage Receivership

First Interim Distribution

 

The VMI Liquidating Trust (successor to Valley Mortgage) made an interim distribution to creditors and investors in September of 2013. This distribution was a small one, approximately $73,000 in total. A creditor with an approved claim of $25,000 received an interim distribution of approximately $100.

 

This interim distribution is not a final distribution and the Trustee anticipates that there will be one or more distributions after this first interim distribution.

 

For the first interim distribution, the Trustee deferred distributions of less than $10.00 in order to limit administrative expenses. Thus, a creditor with a relatively small approved claim (less than approximately $2,500) did not receive a distribution. Creditors with such claims have not lost the funds they are entitled to, but will receive them when another interim distribution or final distribution is made. The Trustee also deferred distributions to creditors now engaged in adversary proceedings with the Trustee, pending final adjudication of those matters.

 

The Trust is still pursuing clawback and avoidance actions against certain investors and certain third parties, and is also pursuing claims against certain professionals. While these claims are substantial in amount, approaching $3,000,000 in the aggregate, no prediction can be made as to the outcomes or recoveries that will be achieved. Already, a discouraging number of clawback defendants have been determined to be unable to repay amounts that they owe. Likewise, certain defendants have raised defenses that may defeat the Trust's claims. The Trustee does not anticipate that creditors will ever receive a significant portion of their approved claims.

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