Question #11: Why not distribute the interest immediately instead of having the attorneys and other professionals eat up the dollars?
The assets of the Liquidating Trusts are not readily distributable cash. The cash that is on hand is that sufficient for a prudent operating reserve. The assets consist of real estate (in the case of the DBSI Real Estate Liquidation Trust), and interests in technology companies and other miscellaneous assets (in the case of the DBSI Liquidating Trust), and, in the case of both trusts, potential future recoveries from litigation conducted by the DBSI Litigation Trust, which cannot presently be quantified. The management of the orderly liquidation that will result in the conversion of those illiquid assets over time into distributable cash, garnering highest practicable value such assets is the task assigned to the Liquidating Trustee and his professionals by the Plan. Many of these assets are not only illiquid but are complex and problematic. DBSI and its former management made many poor decisions in their acquisitions and investments and their callous misuse of investors’ money is well documented in the examiner’s report and on the Court record. For example, many of the real property assets have mortgages, leases, complicated co-ownership structures, easements, etc. One of the real property assets even has an environmental contamination problem. The liquidation of the assets is a complex undertaking and professional skill and expertise is required to conduct it.