SHERMAN OAKS, Calif.--(BUSINESS WIRE)--Woodbridge Group of Companies, LLC and certain of its affiliates and subsidiaries (together “the Company” or “Woodbridge”), responded to objections filed by the Securities and Exchange Commission (“SEC”), stating the following:
“Since the Independent Manager took control of the Company and appointed a Chief Restructuring Officer on December 1, 2017, all fund raising was ceased, the Chapter 11 cases were commenced to maximize value to investors and other stakeholders, and Robert Shapiro was removed from all Company oversight or involvement and is not receiving any compensation from the debtor. As such, it is interesting that the SEC, after looking at this case for a year without taking any action—including allowing the Company to continue to raise approximately $350 million—now suddenly decides to step in after the new, independent management team has accomplished substantial work to reorganize the business and its financial structure.
“We believe the time-tested Chapter 11 process, paired with the business expertise of the new independent management team, best protects the interests of creditors, offers them a voice in the process and will maximize recovery. The SEC’s action could cause irreparable harm to Woodbridge investors and other creditors – dramatically alter the Company’s rights, impair and deplete assets of the estate and hinder the reorganization efforts.”
“The SEC’s current action would erase the extensive efforts the Company’s independent management has taken to bring transparency to the business and maximize recoveries for all the Company’s constituents,” said Sam Newman, partner at Gibson, Dunn & Crutcher LLP and counsel to Woodbridge.
Since the appointments of Beilinson Advisory Group and Chief Restructuring Officer, Larry Perkins, new management has focused on protecting investors and maximizing the estate for the benefit all stakeholders.
Specific actions include:
- Immediately ceased all fundraising, which was the subject of the SEC’s investigation—an action protecting the public good.
- Commenced Chapter 11 cases to maximize value for the benefit of all stakeholders.
- Implemented a process to protect the value of the Company’s assets, evaluate the Company’s obligations to its creditors, resolve their claims promptly, and make appropriate use of the Bankruptcy Code to ensure a fair and equitable distribution.
- Removed Robert Shapiro from all involvement in the Company’s business and ensured that he is currently receiving no compensation from the debtors.
- Secured control of additional non-debtor entities with a value exceeding $20M.
The Company is seeking a hearing on January 18, 2018 for these matters.
Woodbridge investors can visit http://dm.epiq11.com/#/case/woodbridge/info or call toll-free in North America 855-590-2141 or toll-free outside of North America at 503-520-4477 for additional information pertaining to investments. Court filings and other information related to the restructuring are available at www.gardencitygroup.com/cases/WGC or by calling toll-free at 888-735–7613.
Gibson Dunn & Crutcher LLP is serving as legal advisor, SierraConstellation Partners LLC is serving as chief restructuring officer and financial advisor, and Beilinson Advisory Group is serving as independent management to the debtors.