MINNEAPOLIS, March 14, 2014 /PRNewswire/ -- The ResCap Liquidating Trust (the "Trust") announced that it was providing preliminary information to Unitholders regarding the net value for tax purposes of the assets transferred to the Liquidating Trust on December 17, 2013, the effective date of the Chapter 11 Plan of Residential Capital, LLC, et al. While the net valuation of the transferred assets may not be finalized prior to the upcoming tax filing dates, the Trust currently estimates a net value of the transferred assets of $28.00 per Unit for tax reporting purposes. The Trust believes that it would be reasonable to use this estimated net value for tax estimation purposes.
The Trust will provide its final determination of the net value of the transferred assets for tax reporting purposes as soon as it becomes available, but not later than April 16, 2014, as required under Liquidating Trust Agreement and the Plan.
Cautionary Statements
Unitholders should be aware that the estimated net value of the transferred assets provided above, and the net value of the transferred assets ultimately determined by the Liquidating Trust, are being furnished solely for the purposes of tax reporting. Net value for tax reporting purposes is not a projection or forecast of the cumulative amount of per Unit distributions that will be made to Unitholders over the life of the Trust, and cumulative distributions could be materially higher or lower than the net value of transferred assets being provided for tax purposes.
Also, the net asset value of the transferred assets being provided for tax purposes will differ from the net asset value that will be shown on the Trust's balance sheet as of the effective date of the Chapter 11 Plan, determined in accordance with GAAP, because the rules governing the calculation of net asset value as of the effective date for tax and GAAP purposes differ. Among other things, in determining the net asset value for tax purposes, no deduction is made for future accruals for expenses of managing the Trust, disposing of Trust assets and completing the wind-down, or potentially uncollectible advances and receivables.This also principally accounts for the difference between the net asset value of the transferred assets for tax purposes and the amount of net assets the Debtors presented in the Disclosure Statement in connection with Plan of $24.62.
The Trust is unable to provide tax advice to individual Unitholders, and each Unitholder is encouraged to consult with its own tax advisor in light of its own circumstances.
About the ResCap Liquidating Trust
The ResCap Liquidating Trust was established under the Second Amended Joint Chapter 11 Plan of Residential Capital, LLC, et al. for the purpose of liquidating and distributing the assets of the Debtors in the ResCap bankruptcy case. The Trust maintains a website at http://rescapliquidatingtrust.com, where Unitholders may obtain information concerning the Trust.
Contact: Joe Horner, 952-594-6064, joe.horner@rescapestate.com
SOURCE ResCap Liquidating Trust
