- What happened to my GWG Holdings, Inc. securities or claims in the GWG bankruptcy and how were the New WDT Interests calculated?
On June 20, 2023, the Bankruptcy Court confirmed the Debtors’ chapter 11 plan (the “Plan”). A copy of the Plan and the order confirming the Plan can be found at the following: Order Confirming Plan
On August 1, 2023, the Plan became effective (the “Effective Date”). On the Effective Date, in accordance with the Plan, all existing securities issued by GWG, including GWG’s common stock, preferred stock and debt securities (including all L Bonds) were cancelled and were replaced with interests (“New WDT Interests”) in a trust created to liquidate the Debtors’ assets called the GWG Wind Down Trust.
A summary* of the conversion+ of “Allowed#” claims to New WDT Interests is as follows:
L Bond Claims: One (1) Series A1 WDT Interest for each dollar of L Bonds outstanding (i.e., principal, and accrued and unpaid pre-petition interest beginning December 1, 2021, on such L Bond as of April 20, 2022). An example of the conversion of the 50,000 bond may reflect as 51,448 of Series A1 WDT Interest on the Computershare account statement and website. This is an example only, not actual.
General Unsecured Claims: One (1) Series B WDT Interest for each dollar of allowed General Unsecured Claim.
Series 1 Preferred Stock: 1,000 Series C WDT Interests for each share of Series 1 Preferred Stock.
Series 2 Preferred Stock: 1,000 Series D WDT Interests for each share of Series 2 Preferred Stock.
Common Stock: One (1) Series E WDT Interest for each share of GWG common stock.
* This summary is provided for information purposes only. Please refer to the Plan and Confirmation Order for complete information.
+ In accordance with the Plan, in the event the calculations resulted in the issuance of a fractional number of New WDT Interests, the actual distribution of such New WDT Interests was rounded as follows: (a) fractions of one-half (1/2) or greater were rounded to the next higher whole number; and (b) fractions of less than one-half (1/2) were rounded to the next lower whole number.
# Only claimants holding “Allowed” claims are entitled to the distributions set forth below under the Plan.
- Where are my GWG Wind Down Trust interests located?
Computershare is the Transfer Agent of the GWG Wind Down Trust. The securities holder data as of August 1, 2023 was transferred from GWG Holdings, Inc. to Computershare for the purpose of making position data accessible to all direct holders of Series A1, Series A2, Series B, Series C, Series D and Series E New WDT Interests. It is optional to register with Computershare to access your account. It is not required.
- Where do I make changes to my account?
Changes should be directed through Computershare. The Trustee’s office can help with address changes if you have any issues, but all address changes will need to comply with Computershare’s verification requirements. Address changes can only be processed for individuals/holders who hold their interests directly without a broker or custodian. Similarly, any changes to a direct holder’s banking must be directed through Computershare.
The Trustee’s office can assist when you have issues with registering with Computershare but cannot do the registration process for you. You must contact Computershare with any questions or issues to first resolve them at 1-866-595-6048, option 1 (U.S.). The Trustee’s office does not have access to the registration process nor can the Trustee’s office make any changes to your account.
Computershare cannot answer questions related to value of the New WDT Interests or other questions pertaining to the operations of the GWG Wind Down Trust. Those questions should be directed to email@example.com.
Indirect Holders (Broker or Custodian through DTC)
Any change requests by holders holding their New WDT Interests in an account with a broker or custodian through the facilities of The Depositary Trust Company (“DTC”) must be directed to such broker or custodian.
All New WDT Interests holders whose interests are held indirectly through their brokers and custodians must contact their brokers or custodians if they have not seen the conversion of any former securities of GWG into New WDT Interests in the GWG Wind Down Trust. Brokers and custodians were notified through DTC and the LENS Portal of this conversion.
- What is the value of the assets of the WDT Interests?
The valuation of the Wind Down Trust assets is ongoing and is expected to be completed in 90 to 180 days after the Effective Date of August 1, 2023. WDT Interest holders are encouraged to monitor this website for updates on that process.
Actual amounts eligible for recovery may vary from initial valuation of assets contributed to the GWG Wind Down Trust.
- When can I expect to receive a payment (distribution) under the GWG Wind Down Trust?
At this time, we have not determined when the first distribution to the Series A1 WDT Interests or any other series of New WDT Interests will be paid. All distributions will be done in accordance with the Plan and the Amended and Restated Trust Agreement governing the GWG Wind Down Trust (the “Trust Agreement”). Please note that the amount(s) to be distributed under the Plan will be based upon proceeds derived from the liquidation of assets and from results of the prosecution of litigation causes of action that were retained for the benefit of the beneficiaries of the GWG Wind Down Trust. The Trustee for the GWG Wind Down Trust will post new information to this website for updates on progress, including when the first distribution will be paid.
The terms of the New WDT Interests do not require regular dividends or interest payments at predetermined times. As a consequence, no monthly or other periodic dividend or interest payments will be paid on any series of New WDT Interests. GWG Wind Down Trust will not produce and issue monthly statements as it would be a burdensome cost to the estate without any benefit to the beneficiaries. The website will be the primary communication portal between the Trustee and holders of New WDT Interests.
- What steps must be taken by the beneficiary of a deceased Interest Holder?
General requirements for deceased transfers are:
- Certified copy of death certificate;
- Affidavit of domicile;
- Court appointment papers, if any; and/or
- Completed transfer documents with medallion signature guaranty.
The following letter and accompanying forms must be read and completed and mailed or delivered to Computershare at the address included in the letter. Computershare will process the package for approval by the Trustee’s office. Once approved, Computershare will complete the transfer.
For completion of the forms, please insert “Interests” and mark off “shares” on Computershare’s standard forms as the New WDT Interests are not securities. This is a unique case and not standard Transfer Agent practice.
[Link for forms provided below.]
- Can I sell or transfer my WDT Interests to third party?
Other than with limited exceptions, WDT Interests cannot be transferred or sold. The WDT Interests are not securities. As noted above, on the Effective Date, all existing securities issued by GWG, including GWG’s common stock, preferred stock and debt securities (including all L Bonds) were cancelled and were replaced with New WDT Interests. All terms of GWG’s cancelled securities, including with respect to the circumstances under which such securities could be transferred, are no longer operative. The terms governing the transfer of New WDT Interests are set forth in the Plan and the Trust Agreement.
In accordance with Article IV.J of the Plan and Section 2.4(a) of the Trust Agreement, the New WDT Interests are not transferrable generally, except by will, intestate succession, or otherwise by operation of law. There are additional restrictions upon transfer of New WDT Interests which are set forth in the Trust Agreement.
All transfers of L Bonds held directly without a broker or custodian prior to cancellation on the Effective Date were required to be submitted to GWG to be reflected on its books and records prior to the Effective Date. As the Effective Date has passed, we are not able to process either (i) any purported transfers of L Bonds prior to the Effective Date; or (ii) any purported transfers of New WDT Interests after the Effective Date, unless, in the case of a transfer of New WDT Interests, such transfer is in accordance with the Plan and the Trust Agreement.
In addition, a holder currently holding their WDT Interests through a broker or custodian through the facilities of DTC may move their position out of the DTC to be held directly with Computershare as long as the holder does not change. Similarly, if the WDT Interests are held within an IRA or 401k that is terminating, the holder may then hold the WDT Interests directly or through a broker as long as the holder does not change. In order to effect either of these changes, the holder must fill out this [form]:
For completion of the forms, please insert “Interests” and mark off “shares” on Computershare’s standard forms as the WDT Interests are non-securities. This is a unique case and not standard Distribution Agent and Transfer Agent practice.
[Link for forms provided below.]
- How can I redeem my New WDT Interests?
The New WDT Interests are not redeemable. Cash recoveries realized from the assets transferred to the GWG Wind Down Trust or any net cash proceeds from the prosecution or settlement of actions by the Litigation Trust will be distributed as directed by the Trustee on behalf of the GWG Wind Down Trust in accordance with the Plan and the Trust Agreement.
Holders of New WDT Interests cannot recover more than the full amounts owed on account of such New WDT Interests unless such recovery is: (1) permissible under applicable law; and (2) from third-party sources other than the Debtors, the Wind Down Trust, or Litigation Trust, as provided for under this Plan.
Cash distributions will be made in the priority order established in the Confirmation Order and the Trust Agreement.
- Will financial advisors, brokers/dealers have access to an advisor portal on behalf of their clients?
We expect that the Computershare advisor portal for GWG Wind Down Trust will be live by September 11, 2023. Any questions related to the advisor portal should be directed to Computershare. The Trustee’s office will not have any access to the portal nor be able to answer any questions related to the portal.
Additionally, if the advisor is not listed under your account with Computershare, please complete the linked form for the advisor to gain access.
[Link for form provided below.]
- What are the interests in Beneficient? What is the timing for liquidation?
The GWG Wind Down Trust holds approximately 169.7 million shares of common stock of Beneficient. Sales of the shares of Beneficient is regulated by the U.S. securities laws. Beneficient has filed a registration statement on Form S-1 (File No. 333-273322) with the Securities and Exchange Commission registering such shares for sale. This registration statement has not been declared effective by the SEC. Sales of the Beneficient shares will be done in accordance with appliable law and at times and in amounts that the Trustee determines in accordance with the Plan and the Trust Agreement.
- What is the interest in FOXO?
The Wind Down Trust holds approximately 4.6 million shares of FOXO. Sales of the FOXO shares will be done in accordance with applicable law and at times and in amounts that the Trustee determines in accordance with the Plan and the Trust Agreement.
- What is happening with the portfolio company and the insurance policies? Are premiums being paid?
The Wind Down Trust has retained a portfolio manager and will continue to service the policies and monitor them in an effort to promote optimal performance.
13. How will interest accrue and be paid on the new WDT interests? How will it be reflected at Computershare or in brokerage accounts?
Interest on the Series A1 WDT Interests and Series A2 WDT Interests, which were issued to GWG bondholders, accrues at a rate of 9.00% per annum. Interest on the Series B WDT Interests, which were issued to general unsecured creditors of GWG, accrues at the Federal Judgment Rate. Interest at the foregoing rates accrues beginning as of April 20, 2022, the date on which GWG Holdings and certain of its affiliates commenced their chapter 11 cases. However, interest on interest-bearing WDT Interests is not paid, if ever, until the full principal amount of such interests has been paid. Further, Series C, D, and E WDT Interests, which were issued to holders of preferred and common stock issued by GWG Holdings, do not accrue interest.
The Wind Down Trust will maintain records of interest accrued on the WDT Interests and will include information concerning such accrued interest on its website. However, in light of the timing of such interest payments, it would be it would be unduly burdensome and expensive to provide monthly individualized reporting concerning interest accrual. Accordingly, brokerage and Computershare accounts will not be updated to reflect such interest accrual. Instead, as and when any interest payments are made, following the payment in full of the principal amounts of the related WDT interests, account statements will reflect distributions made on account of accrued interest.
14. Is the insurance portfolio sale for $10 million partial or a full sale?
Following the Plan Effective Date, the WDT Trustee commenced a marketing process for the sale of the Policy Portfolio. The WDT Trustee established a data room, entered into eleven non-disclosure agreements with potentially interested parties, and ultimately received proposals from two bidders.
The WDT Trustee evaluated the proposals, taking into account the net cash to the Wind Down Trust, the financial wherewithal of the proposed purchaser, the timing for a proposed closing, the proposed transaction structure, the completion of the portfolio diligence by the bidders, the reduction in operating costs to the Wind Down Trust, and the willingness of the Exit Facility/Lender to provide the required consents and amendments for an assumption of the Exit Facility.
Following a thorough evaluation process, the WDT Trustee elected to sell the entire Policy Portfolio (through selling the Wind Down Trust’s limited liability interests in Portfolio Co.) in exchange for $10 million and the purchaser’s assumption of the existing Exit Facility/Loan. Closing occurred on October 13, 2023.
For further information as to the Motion, Order and Notice of Closing of the Portfolio Sale, please click on the links below: