As we come to the close of 2014, many have asked for an update on the status of the Trust, whose activities have been limited
I am attaching to this report a Statement of Cash Receipts and Disbursements for the year 2014. From that, you'll see that we received the balance of the Pajonas settlement payments, and we continue to receive payments from the Boulder settlement, which have been reduced because Roy MacDowell, the principal, has fallen on hard times. Mr. MacDowell continues to make monthly payments of $1,000, and we will do what we can to try to obtain the balance without incurring expenses. In addition, half of the amount received on this settlement is payable to the Class; one half of the remainder payable to Silicon Valley Law Group’s counsel in conjunction with the fee settlement reached on that case.
Shreveport is our last major asset, but the reduction in oil and gas royalties has been substantial. Initially we had been receiving checks of approximately $6,000 per month, but with the decreases in oil and gas prices during the year the current monthly collections are running about $2,500. Of this amount, counsel for the Silicon Valley Law Group is entitled one-half until we pay an additional $60,000. The legal fees incurred by Silicon Valley Law Group exceeded $2 million and because they were successful in the suit, the Trust was subject to a claim for their legal fees. Mr. Devorkin was able to get that amount reduced and the amount remaining due on this legal fee settlement is $60,000.
As stated in previous letters, Cordell Funding still holds a 50% interest in any production receipts once $2 million is received. At this point in time we are $1.7 million away from achieving that benchmark.
We have one more unit that should begin producing royalties to the Trust late in the year 2015. I intend to explore selling the collective cash stream from all of these royalties in order to complete distributions from the Liquidating Trust.
The bottom line - the last major asset that we have is the gas and oil royalties which, as previously stated, are not large. If and when gas prices rise and the third unit becomes productive, the future cash streams from the output could, possibly at that point in the future, make a sale and distribution possible. However, I would think that it will not be for quite some time, and almost certainly be less than one cent on the dollar.
Gerard A. McHale Jr., Liquidating Trustee
ATTACHMENTS: 2014 1031 Tax Group Receipts and Disbursements.PDF