TRUST

Effective as of August 1, 2023, the GWG Wind Down Trust was formed to hold the assets of GWG Holdings, Inc. and its subsidiaries (collectively the “Company”).  The Trust exists for the benefit of the prior bondholders, trade creditors, stockholders and other claimants of the bankruptcy estate.  Under the Plan, each of the claimants was issued New WDT Interests under the Trust representing the claimant’s interest as a beneficiary of the Trust. The Trust is in possession of the assets that were allocated from the Company and strategies are in place to maximize the value of the assets. Distributions will be made as assets are liquidated with time.

ASSETS OF THE TRUST

Under the Plan, the Trust was assigned the following interests:

  1. A life insurance policy portfolio (liquidated October 13, 2023);
  2. Common stock in FOXO, an epigenetics technology company developing products for the life insurance industry (liquidated October 13, 2023);
  3. Common stock in Beneficient (“BENF”); and
  4. Any net Proceeds generated by the pursuit of the causes of action prosecuted under the Litigation Trust. The Litigation Trust was established and funded as a separate trust apart from the Wind Down Trust to prosecute litigation on behalf of the beneficiaries of the Wind Down Trust. Michael Goldberg of Akerman is the Trustee of the Litigation Trust.

REMAINING ASSETS:

Litigation Proceeds Michael Goldberg, Litigation Trustee, will pursue the “Retained Causes of Action”. The proceeds received by the GWG Wind Down Trust from the Litigation Trustee shall be used to make the distributions under the confirmed Plan. The Litigation Trust Amounts may not be used for any other purpose without the approval of the Bankruptcy Court or written consent of the Litigation Trustee. Please look to the most recent Status Report as to the status of the Litigation Trust and any proceeds received by the GWG Wind Down Trust.

BENF.  The Trust has sold shares of Beneficient since the Effective Date.  The performance of the BENF shares has not been as hoped at the time of confirmation of the Plan.  The value of the shares has dropped since the confirmation date necessitating Beneficient to perform an  80:1 reverse stock split. See update to BENF stock on the latest Joint Status Report https://gwgholdingstrust.com/joint-status-reports/.

LIQUIDATED ASSETS AND RESULTS TO TRUST:

Life Insurance Policy Portfolio. On October 13, 2023, the Trust sold the entire life insurance portfolio to Apex Longevity Fund, LLC through the sale of 100% of the Trusts membership interests in Life Recovery Fund, LLC.  The net present value of the life insurance portfolio was approximately $605 million.  However, Obra (Vida) Credit Facility held a fully collateralized loan against the portfolio for approximately $605 million.  The Trust, having no income, could not service the premiums of approximately $10-15 million per month in order to have realized the full, face value of the portfolio at approximately $1.6 billion.  The Trust realized gross proceeds of $10 million from the sale of the membership interest in Life Recovery Fund, LLC.

FOXO The Trust held approximately 4.6 million shares of common stock in FOXO Technologies, Inc. On October 13, 2023, the GWG Wind Down Trust sold its stock holdings of FOXO Technologies, Inc. (4,646,698 shares in total) and will realize net proceeds of $586,943.

HOW DOES THE TRUST OPERATE?

The day-to-day operations of the Trust are managed by the Trustee. The Trustee is ultimately responsible for all decisions made.  However, the Trustee utilizes a team of cost conscious professional service groups to provide her with the financial, accounting, operational and legal support to provide the best strategies for the Trust to maximize the return to the WDT Interest holders.

WHAT ARE MY INTERESTS?

Each holder was issued the New WDT Interests pursuant to its Claim Class of the total aggregate shares based upon the waterfall as provided under the Plan. Pursuant to the Plan, these interests are not saleable nor transferrable at this time with the exception of probate, intestate succession, or under other operable law. In accordance with the Confirmation Order and the Plan, the following classes of beneficial interests in the Wind Down Trust were created and interests issued to the Wind Down Trust Beneficiaries as follows:
  1. New Series A1 WDT Interests – issued to the Holders of Allowed Class 3 Bond Claims (other than LBM Subordinated Claims), in an amount equal to the aggregate dollar amount of the outstanding Allowed Bond Claims (less the amount of the Allowed LBM Subordinated Claims);
  2. New Series A2 WDT Interests – issued to the Holders of Allowed LBM Subordinated Claims in Class 3;
  3. New Series B WDT Interests – issued to the Holders of Class 4(a) Allowed General Unsecured Claims;
  4. New Series C WDT Interests – issued to the Holders of Allowed Class 8 Series 1 Preferred Interests;
  5. New Series D WDT Interests – issued to the Holders of Allowed Class 9 Series 2 Preferred Interests; and
  6. New Series E WDT Interests – issued to the Holders of Allowed Class 10 Existing Common Stock.