Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims

3 Months Ended

Jun. 30, 2012

Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims [Abstract]

Reserves for Expected Costs of Liquidation and Residual Wind-Down Claims

7. 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, including expected reporting costs, for the three months ended June 30, 2012 and 2011:

	Three months ended June 30, 2012
(in thousands)	Reserve for Expected Wind Down Costs			Reserve for Expected Reporting Costs			Reserve for Indenture Trustee/Fiscal and Paying Agent Costs		Reserve for Avoidance Action Defense Costs			Reserve for Residual Wind Down Costs			Total Reserves for Expected Costs of Liquidation
Balance, April 1, 2012	$	56,815		$	13,320		$	647	$	1,280		$	4,049		$	76,111
Additions to (reductions in) reserves		(3,241	)		3,961			—		—			—			720
Less liquidation costs incurred (net of reversals):
Trust Professionals		(6,491	)		(1,539	)		—		(40	)		(799	)		(8,869	)
Trust Governance		(1,129	)		(467	)		4		—			—			(1,592	)
Other Administrative Expenses		(20	)		(36	)		—		—			(10	)		(66	)
Balance June 30, 2012	$	45,934		$	15,239		$	651	$	1,240		$	3,240		$	66,304

	Three months ended June 30, 2011
(in thousands)	Reserve for Expected Wind Down Costs			Reserve for Expected Reporting Costs			Reserve for Indenture Trustee/Fiscal and Paying Agent Costs		Reserve for Avoidance Action Defense Costs		Reserve for Residual Wind Down Costs		Total Reserves for Expected Costs of Liquidation
Balance, April 1, 2011	$	—		$	—		$	—	$	—	$	—	$	—
Plus:
Funding for expected costs from MLC		52,734			—			—		—		—		52,734
Additions to reserve		—			5,657			—		—		—		5,657
Less liquidation costs incurred:
Trust Professionals		(8,330	)		(846	)		—		—		—		(9,176	)
Trust Governance		(525	)		—			—		—		—		(525	)
Other Administrative Expenses		(70	)		(78	)		—		—		—		(148	)
Balance June 30, 2011	$	43,809		$	4,733		$	—	$	—	$	—	$	48,542

During the quarter ended June 30, 2012, estimates of expected Wind-Down Costs and estimates of expected Reporting Costs (that are both probable and estimable) decreased by $3.2 million and increased by $4.0 million, respectively. During the quarter ended June 30, 2011, estimates of expected Reporting Costs increased by $5.7 million. Such revisions in the estimates were recorded as reductions in and additions to the reserves for expected costs of liquidation in such periods. The estimates of expected Wind-Down Costs at June 30, 2012 reflect the execution of a letter agreement subsequent to quarter end with the DIP lenders providing for relief from certain restrictions on utilization of Wind-Down Assets.

The following is a summary of the activity in the reserve for Residual Wind-Down Claims for the three months ended June 30, 2012:

(in thousands)	Reserve for Residual Wind Down Claims
Balance, April 1, 2012	$	32,247
Less payments of claims		(1,132	)
Balance June 30, 2012	$	31,115

There was no reserve for Residual Wind-Down Claims prior to the dissolution of MLC on December 15, 2011.