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

6 Months Ended

Sep. 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 and six months ended September 30, 2012 and 2011:

	Three months ended September 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, July 1, 2012	$	45,934		$	15,239		$	651		$	1,240		$	3,240		$	66,304
Plus increase in reserves		4,265			413			—			—			—			4,678
Less liquidation costs incurred:
Trust Professionals		(5,848	)		(517	)		—			(145	)		(1,102	)		(7,612	)
Trust Governance		(1,077	)		(465	)		(79	)		—			—			(1,621	)
Other Administrative Expenses		(13	)		(73	)		—			—			—			(86	)
Balance, September 30, 2012	$	43,261		$	14,597		$	572		$	1,095		$	2,138		$	61,663

	Six months ended September 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
Plus increase in reserves		1,024			4,374			—			—			—			5,398
Less liquidation costs incurred:
Trust Professionals		(12,339	)		(2,056	)		—			(185	)		(1,901	)		(16,481	)
Trust Governance		(2,206	)		(932	)		(75	)		—			—			(3,213	)
Other Administrative Expenses		(33	)		(109	)		—			—			(10	)		(152	)
Balance, September 30, 2012	$	43,261		$	14,597		$	572		$	1,095		$	2,138		$	61,663
	Three months ended September 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, July 1, 2011	$	43,809		$	4,733		$	—		$	—		$	—		$	48,542
Less liquidation costs incurred:
Trust Professionals		(5,045	)		(2,077	)		—			—			—			(7,122	)
Trust Governance		(502	)		—			—			—			—			(502	)
Other Administrative Expenses		(50	)		(60	)		—			—			—			(110	)
Balance, September 30, 2011	$	38,212		$	2,596		$	—		$	—		$	—		$	40,808

	Six months ended September 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		(13,375	)		(2,923	)		—		—		—		(16,298	)
Trust Governance		(1,027	)		—			—		—		—		(1,027	)
Other Administrative Expenses		(120	)		(138	)		—		—		—		(258	)
Balance, September 30, 2011	$	38,212		$	2,596		$	—	$	—	$	—	$	40,808

During the quarter ended September 30, 2012, estimates of expected Wind-Down Costs and estimates of expected Reporting Costs (that are both probable and estimable) increased by $4.3 million and $0.4 million, respectively. During the six months ended September 30, 2012, estimates of expected Wind-Down Costs and estimates of expected Reporting Costs (that are both probable and estimable) increased by $1.0 million and $4.4 million, respectively. During the six months ended September 30, 2011, estimates of expected Reporting Costs increased by $5.7 million. Such revisions in the estimates were recorded as additions to the reserves for expected costs of liquidation in such periods. The estimates of expected Wind-Down Costs for the six months ended September 30, 2012 reflect the execution of a letter agreement 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 and six months ended September 30, 2012:

(in thousands)	Three Months Ended September 30, 2012			Six Months Ended September 30, 2012
Balance, beginning of period	$	31,115		$	32,247
Less payments of claims		(142	)		(1,274	)
Balance, September 30, 2012	$	30,973		$	30,973

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