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, 2014, 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 reserve		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
Less reductions in reserves		(3,843	)		(4,067	)		—			—			—			(7,910	)
Less liquidation costs incurred:
Trust Professionals		(7,736	)		(2,013	)		—			(898	)		(373	)		(11,020	)
Trust Governance		(3,888	)		(1,799	)		(35	)		—			—			(5,722	)
Other Administrative Expenses		(47	)		(328	)		—			—			—			(375	)

Balance, March 31, 2014	$	22,529		$	12,235		$	464		$	—		$	1,258		$	36,486

During the year ended March 31, 2014, estimates of expected Wind-Down Costs and estimates of expected Reporting Costs decreased by $3.8 million and $4.1 million, respectively. 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 (reductions in) 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.

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. As of March 31, 2014, 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. The remaining liquidation period is dependent predominantly on the estimate of the remaining period of time for resolution of the Term Loan Avoidance Action, as well as certain additional estimated time as necessary to wind down the GUC Trust. 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, 2014, 2013 and 2012:


(in thousands)	2014			2013			2012
Balance, beginning of year	$	30,855		$	32,247		$	—
Plus reserves received during the year from MLC		—			—			33,807
Less claims allowed during the year		(2,157	)		(1,392	)		(1,560	)

Balance, end of year	$	28,698		$	30,855		$	32,247