Under the Plan, for purposes of determining your “pro rata” share of cash distributions, your claim was calculated “net” of any prior distributions or payments that you may have received from Woodbridge in connection with any Notes or Units (other than return of principal or capital which already has been applied to reduce your claim).
The netting referred to above was required in order to treat all investors fairly in light of the fact that Woodbridge was operated as a Ponzi scheme. When a Ponzi scheme occurs, the law is designed to prevent some investors from realizing a profit while others are left to suffer a loss, and the Plan accounts for that. This netting recognized the reality that there was no legitimate source of funds for Woodbridge to pay any so-called “interest” or “dividends.” Those payments were made with other victims’ money. So netting treated prior payments as a return of investor victims’ principal, as they could not be considered legitimate investment return on principal (interest or dividends). For example, if you invested $1,000 in Notes or Units issued by Woodbridge, and were paid $100 in interest prior to the commencement of the Woodbridge bankruptcy cases, then your “net” claim for purposes of the Plan would have been $900. If, on the other hand, you invested $1,000 in Notes or Units issued by Woodbridge, and were paid nothing in the past by Woodbridge, then your “net” claim for purposes of the Plan would have been the full $1,000 that you invested.