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

12 Months Ended

Mar. 31, 2013

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

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

8. 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 for the years ended March 31, 2013 and 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, 2011	$	—		$	—		$	—		$	—		$	—		$	—
Plus:
Funding for expected costs from MLC		52,734			—			1,365			1,358			7,555			63,012
Additions to reserve		32,434			20,560			—			—			—			52,994
Less liquidation costs incurred:
Trust Professionals		(25,320	)		(6,975	)		—			(78	)		(3,506	)		(35,879	)
Trust Governance		(2,866	)		—			(718	)		—			—			(3,584	)
Other Administrative Expenses		(167	)		(265	)		—			—			—			(432	)
Balance, March 31, 2012		56,815			13,320			647			1,280			4,049			76,111
Plus additions to reserves		5,195			12,293			—			—			—			17,488
Less liquidation costs incurred:
Trust Professionals		(19,712	)		(2,985	)		—			(382	)		(2,408	)		(25,487	)
Trust Governance		(4,191	)		(1,866	)		(148	)		—			—			(6,205	)
Other Administrative Expenses		(64	)		(320	)		—			—			(10	)		(394	)
Balance, March 31, 2013	$	38,043		$	20,442		$	499		$	898		$	1,631		$	61,513

During the year ended March 31, 2013, estimates of expected Wind-Down Costs and estimates of expected Reporting Costs increased by $5.2 million and $12.3 million, respectively. During the year ended March 31, 2012, estimates of expected Wind-Down Costs and estimates of expected Reporting Costs increased by $32.4 million and $20.6 million, respectively. Such revisions in the estimates were recorded as additions to the reserves for expected costs of liquidation in such years. The estimates of expected Wind-Down Costs for the year ended March 31, 2013 reflect the execution of a letter agreement with the DIP Lenders providing for relief from certain restrictions on utilization of Wind-Down Assets. The GUC Trust has recorded reserves for expected costs of liquidation that represent amounts expected to be incurred over the estimated remaining liquidation period of the GUC Trust for which there was a reasonable basis for estimation as of March 31, 2013. The amount of liquidation costs that will ultimately be incurred depends both on that time period and on the extent of activities required for the GUC Trust to complete its functions and responsibilities under the Plan and the GUC Trust Agreement. Significant uncertainty remains both as to that time period and as to the extent of those activities. The GUC Trust changed its estimate of the length of the remaining liquidation period during the year ended March 31, 2013, which resulted in an increase in estimates of expected Wind-Down Costs and estimates of expected Reporting Costs during the year. As of March 31, 2013, the recorded reserves for expected costs of liquidation reflect estimated costs for a remaining liquidation period extending through December 31, 2016, which has been estimated on a probability-weighted basis as permitted under U.S. GAAP and which the GUC Trust believes is the most appropriate measurement basis in the circumstances. In addition, certain liquidation costs that are expected to be prepaid by the GUC Trust upon its dissolution have also been estimated and accrued. It is reasonably possible that the GUC Trust’s estimates regarding the costs and remaining liquidation period could change in the near term.

The following is a summary of the activity in the reserves for Residual Wind-Down Claims for the years ended March 31, 2013 and 2012:

(in thousands)	2013			2012
Balance, beginning of year	$	32,247		$	—
Plus reserves received during the year from MLC		—			33,807
Less claims incurred/paid during the year		(1,392	)		(1,560	)
Balance, end of year	$	30,855		$	32,247