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 three and six months ended September 30, 2015 and 2014:


	Three months ended September 30, 2015
(in thousands)	Reserve for Expected Wind-Down Costs			Reserve for Expected Reporting Costs			Reserve for Indenture Trustee/Fiscal and Paying Agent Costs			Reserve for Residual Wind-Down Costs			Total Reserves for Expected Costs of Liquidation
Balance, June 30, 2015	$	20,344		$	8,206		$	347		$	1,221		$	30,118
Plus additions to reserves		5,748			2,219			—			—			7,967
Less liquidation costs incurred:
Trust Professionals		(2,017	)		(740	)		—			(2	)		(2,759	)
Trust Governance		(1,041	)		(450	)		(18	)		—			(1,509	)
Other Administrative Expenses		(858	)		(57	)		—			—			(915	)

Balance, September 30, 2015	$	22,176		$	9,178		$	329		$	1,219		$	32,902


	Six months ended September 30, 2015
(in thousands)	Reserve for Expected Wind-Down Costs			Reserve for Expected Reporting Costs			Reserve for Indenture Trustee/Fiscal and Paying Agent Costs			Reserve for Residual Wind-Down Costs			Total Reserves for Expected Costs of Liquidation
Balance, March 31, 2015	$	21,089		$	8,602		$	364		$	1,223		$	31,278
Plus additions to reserves		7,195			3,103			—			—			10,298
Less liquidation costs incurred:
Trust Professionals		(3,381	)		(1,494	)		—			(4	)		(4,879	)
Trust Governance		(1,859	)		(900	)		(35	)		—			(2,794	)
Other Administrative Expenses		(868	)		(133	)		—			—			(1,001	)

Balance, September 30, 2015	$	22,176		$	9,178		$	329		$	1,219		$	32,902


	Three months ended September 30, 2014
(in thousands)	Reserve for Expected Wind-Down Costs			Reserve for Expected Reporting Costs			Reserve for Indenture Trustee/Fiscal and Paying Agent Costs			Reserve for Residual Wind-Down Costs			Total Reserves for Expected Costs of Liquidation
Balance, June 30, 2014	$	22,513		$	10,483		$	446		$	1,238		$	34,680
Plus additions to reserves		2,240			51			—			—			2,291
Less liquidation costs incurred (net of reversals):
Trust Professionals		(1,801	)		(390	)		—			(4	)		(2,195	)
Trust Governance		(912	)		(450	)		(38	)		—			(1,400	)
Other Administrative Expenses		2			(31	)		—			—			(29	)

Balance, September 30, 2014	$	22,042		$	9,663		$	408		$	1,234		$	33,347


	Six months ended September 30, 2014
(in thousands)	Reserve for Expected Wind-Down Costs			Reserve for Expected Reporting Costs			Reserve for Indenture Trustee/Fiscal and Paying Agent Costs			Reserve for Residual Wind-Down Costs			Total Reserves for Expected Costs of Liquidation
Balance, March 31, 2014	$	22,529		$	12,235		$	464		$	1,258		$	36,486
Plus additions to (reductions in) reserves		4,677			(542	)		—			—			4,135
Less liquidation costs incurred:
Trust Professionals		(3,327	)		(975	)		—			(24	)		(4,326	)
Trust Governance		(1,829	)		(903	)		(56	)		—			(2,788	)
Other Administrative Expenses		(8	)		(152	)		—			—			(160	)

Balance, September 30, 2014	$	22,042		$	9,663		$	408		$	1,234		$	33,347

During the three months ended September 30, 2015, estimates of expected Wind-Down Costs and estimates of expected Reporting Costs (for which there is a reasonable basis for estimation) increased by $5.7 million and $2.2 million, respectively. During the six months ended September 30, 2015, estimates of expected Wind-Down Costs and estimates of expected Reporting Costs (for which there is a reasonable basis for estimation) increased by $7.2 million and $3.1 million, respectively. During the three months ended September 30, 2014, estimates of expected Wind-Down Costs and estimates of expected Reporting Costs (for which there is a reasonable basis for estimation) increased by $2.2 million and $51 thousand, respectively. During the six months ended September 30, 2014, estimates of expected Wind-Down Costs and estimates of expected Reporting Costs (for which there is a reasonable basis for estimation) increased by $4.7 million and decreased by $0.5 million, respectively. Such revisions in the estimates were recorded as additions to (reductions in) the reserves for expected costs of liquidation in such periods. 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 September 30, 2015.

The amount of liquidation costs that will ultimately be incurred depends both on the 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 September 30, 2015, the recorded reserves for expected costs of liquidation reflect estimated costs for a remaining liquidation period extending through October 2017, which has been estimated predominately on a probability-weighted basis as permitted under U.S. GAAP and which the GUC Trust believes is the most appropriate measurement basis under the circumstances. Where an outcome is estimated to be likely, the likely outcome has been used as the best estimate and no weight has been given to the unlikely outcome. 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. It is possible that future developments in the Term Loan Avoidance Action could extend the current estimate of such remaining period of time for resolution and, therefore, extend the estimated remaining liquidation period of the GUC Trust beyond October 2017. 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.

As described in Part II, Item 1, Legal Proceedings, the GUC Trust is participating, as an interested party, in litigation involving certain General Motors vehicle recalls. While unlikely at this time, it is possible that such litigation could extend the remaining liquidation period of the GUC Trust beyond October 2017.

The following is a summary of the activity in the reserves for Residual Wind-Down Claims for the three months ended September 30, 2015 and 2014:


(in thousands)	2015			2014
Balance, beginning of period	$	23,840		$	28,335
Less claims allowed during the period		(2,349	)		(916	)

Balance, end of period	$	21,491		$	27,419

The following is a summary of the activity in the reserves for Residual Wind-Down Claims for the six months ended September 30, 2015 and 2014:


(in thousands)	2015			2014
Balance, beginning of period	$	25,406		$	28,698
Less claims allowed during the period		(3,915	)		(1,279	)

Balance, end of period	$	21,491		$	27,419