There was a significant dispute in the bankruptcy cases regarding whether the Units actually were “claims,” or instead were “equity” (ownership interests) in the Debtors (in which case Unitholders would have been entitled to be paid nothing). Rather than spend significant time and money litigating these very complicated issues, the parties (including a fiduciary group for Unitholders) negotiated and settled upon allowance of claims for Unitholders at a 27.5% discount as compared to Noteholders’ claims. This aspect of the settlement was accomplished by affording Noteholders Class A Liquidation Trust Interests for 100% of their Net Note Claims and affording Unitholders Class A Liquidation Trust Interests for only 72.5% of their Net Unit Claims.
Unitholders also received Class B Liquidation Trust Interests for the other 27.5% of their Net Unit Claims, so that if there is more money available after payment of the Net Note Claims, Allowed General Unsecured Claims, and Net Unit Claims represented by the Class A Liquidation Trust Interests, then Unitholders will receive cash distributions on their Class B Liquidation Trust Interests until the remaining Net Unit Claims are paid. Based on the most recent estimates published by the Liquidation Trust, in December 2019, there will be no distributions on account of Class B Liquidation Trust Interests.