The following is an update from the Liquidation Trustee of the CFO Management Holdings Liquidation Trust:

Plan Confirmation
On January 13, 2021, the Court entered its Findings of Fact, Conclusions of Law and Order Confirming Chapter 11 Trustee’s Second Amended Plan of Liquidation for Debtor CFO Management Holdings, LLC (with Technical Modifications and Certain Settlement Language) [Docket No. 663], confirming the Chapter 11 Trustee’s Second Amended Plan of Liquidation for Debtor CFO Management Holdings, LLC (with Technical Modifications and Certain Settlement Language) [Docket No. 659] (the “Plan,” available here) proposed by David Wallace in his capacity as Chapter 11 trustee for debtor CFO Management Holdings, LLC (the “Debtor”). The most recent supplement to the Plan, which includes the Investor Claims Schedule and the trust agreement for the resulting Trust (defined below), is available at Docket No. 757 (located here).

Occurrence of the Effective Date of the Plan
The Plan has become effective under its terms, and the “Effective Date” of the Plan took place on March 31, 2021.

Formation of the Liquidation Trust
In accordance with terms of the Plan, on the Effective Date, the Debtor is deemed dissolved and the CFO Management Holdings Liquidation Trust (the “Trust”) was formed, with David Wallace serving in the role of the Liquidation Trustee (the “Liquidation Trustee”).

Trust Distributions
Since the inception of the Trust, a total of three distributions have been made to Trust beneficiaries in accordance with the terms of the Plan. The initial distribution was sent on the Effective Date and was equal to approximately 18% of the Allowed (as that term is defined in the Plan) unsecured claims in the Debtor’s bankruptcy case, meaning that each Trust beneficiary should have received an initial distribution check of approximately 18% of that beneficiary’s Allowed unsecured claim. Checks for the second distribution totaling approximately 5.7% of such claims were mailed on July 6, 2022. Checks for the third and final distribution totaling approximately 2% of such claims were mailed on September 1, 2023.

***PLEASE NOTE that notwithstanding the above, beneficiaries for whom the Liquidation Trustee does not have a valid mailing address may not have received their distributions. All beneficiaries are encouraged to notify the Liquidation Trustee promptly with any updated contact information to avoid forfeiture of unclaimed or undeliverable distributions in accordance with Article 6.2 of the Plan. Also, please note that those beneficiaries who have transferred their interests or purchased another’s interest in the Trust may not have received all of the distributions described above, as beneficiaries are only entitled to distributions made while they were the owner of those interests.

Trust Winddown
Having liquidated the Trust’s assets for the benefit of the Trust’s beneficiaries and issued the third and final distribution, the Trust is currently taking necessary steps to satisfy final obligations and winddown the Trust’s existence.

Claim Amounts
The distributions to trust beneficiaries who are “Investor” creditors are based on the Allowed claim amounts listed on the Investor Claims Schedule, which is part of the Plan Supplement and starts on page 14 of the pdf here). In accordance with the Plan, all trust beneficiaries (i.e. unsecured creditors with Allowed claims) receive the same treatment with respect to the priority and percentage of distributions.

Claims Transfers
The Trust cannot provide information or guidance on whether or not it would be prudent to engage in a transfer of any beneficiary’s beneficial interest in the Trust to a “claims trader” at any given price. Transfers of beneficial interests are governed by Section 6.11 of the Plan.

Address Changes
Should you wish to change your address for purposes of the Trust’s records, please notify the Liquidation Trustee in writing (email is preferred) at both of the addresses provided on the Notice of Occurrence of the Effective Date of the Plan of Liquidation for Debtor CFO Management Holdings, LLC [Docket No. 760] (located here).

Distributions to Beneficiary IRA Accounts
Note that, in accordance with the Plan, unless the Liquidation Trustee is otherwise directed, those unsecured “investor” creditors who hold a Debtor-related promissory note in a self-directed IRA or similar investment product for which the Liquidation Trustee has record will receive their distributions to that IRA or similar account. Accordingly, if you as a trust beneficiary close such an account, please contact the Liquidation Trustee to provide updated distribution-address information.

Please note that attached as Exhibit B to the Confirmation Order (located here) is a letter regarding the valuation of such promissory notes. Investor creditors in this case are encouraged to review the letter and consult with their individual counsel or tax advisors regarding the use of such valuation letter in connection with IRA or related tax matters that may be impacted by the value of the promissory notes at issue and any consequences of taking distributions directly or through an IRA.

Tax Documents
While in an earlier notification the Trust noted that it would be issuing a “grantor letter” to Trust beneficiaries regarding 2021 Trust activity, the Trust has been advised by its accountants that the Trust’s status as a QSF (qualified settlement fund) under U.S. Treasury Regulation Section 1.468B-1 (26 CFR § 1.468B-1) means that it does not issue a grantor letter, K-1, 1099, or other tax reporting form to its beneficiaries. The Trust will be filing a Form 1120-SF to report to the IRS any transfers received and distributions made, among other required disclosures (see here).

Please be aware that the fact that the Trust has not issued a tax reporting form to you does not mean that there are no tax consequences to any distribution payments you received from the Trust. The Trust and its professionals cannot provide tax advice to you but recommend that you contact your tax advisor regarding your reporting to the IRS and any related treatment or designation of such distribution. If your claim in the bankruptcy and resulting beneficial interests in the Trust related to an IRA or similar investment product, consulting with your tax advisor is further recommended because the rules related to those investment products and related transfers and rollovers are complicated and technical and can result in taxes and penalties.

The above update is provided for general informational purposes only and in no way alters the terms of the confirmed Plan and the related Court-approved documents. For a limited time, the Plan, the Court order approving the Plan, and other pleadings in these cases and supporting papers can be viewed and downloaded for free through this website under the “Court Docket” tab. Please note that this website will be shut down as part of the Trust’s winddown process, so the documents and information contained herein will be available only for a limited time.

If you have any questions, please contact Jessica Lewis of Ross, Smith & Binford, PC, counsel to the Liquidation Trust. She may be reached via email: jessica.lewis@rsbfirm.com or by phone: 214-593-4971.