March 2024 Corporate Capital Distributions

NCUA’s regulations permit distributions to depleted capital holders only after all more senior claims have been fully paid or sufficient provisions have been made for them. Using a conservative provisioning approach, and in accordance with standard operating procedures for the Asset Management Estates (AMEs), the liquidating agent has compared each AME’s cash to its remaining obligations. This analysis shows that funds are not available for a meaningful distribution to capital or share holders of the closed corporates.

Economic events, including increasing interest rates, will impact the amount and timing of any future distributions as the future performance, and ultimate monetization of remaining assets will depend on underlying market conditions, and investor demand for the remaining legacy assets.

There will be no distribution in March of 2024.

There will be no distribution in March of 2024. Generally, distributions are made following evaluation of the June and December financial statements. Actual distributions will usually occur in March and September.

Distributions are generally remitted via electronic funds transfer (EFT), using the banking information the liquidating agent has on file. If the credit union previously provided its EFT information to the NCUA and no changes are required, no further action will be needed for future distributions. If NCUA does not have your EFT information or you are unsure, please complete the authorization agreement for EFT payments to make necessary updates. If the NCUA does not have EFT information on file, we will reach out to distribution recipients to complete the authorization agreement for EFT payments before the next distribution. The liquidating agent will work with each non-credit union distribution recipient to ensure timely receipt of the distribution.

There will be no distribution in March of 2024.

The Liquidating Agent’s projections are point-in-time estimates, subject to change, and largely dependent on the Liquidating Agent’s ability to affect, and orderly liquidate, post-securitized assets and legal settlements.

No dividends are being paid out in March 2024. We anticipate a liquidating dividend (surplus) will remain after all claims are paid for Southwest and Members United. Under 12 U.S.C. §1787(b)(11)(B) any case in which funds remain after all accountholders, creditors, other claimants, and administrative expenses are paid, the liquidating agent shall distribute such funds to the credit union's shareholders. The dividend will be based on the share and certificate balance at the time of liquidation, not capital balance.

The timing and amount of future distributions will depend on future performance, the availability of cash through the orderly liquidation of assets, payment of senior claims, and the resolution of the current outstanding lawsuits. While no dividend is being paid at this time, we do anticipate a final dividend distribution in the coming years.

It does not. The four corporate AMEs already reimbursed the Share Insurance Fund for all Share Insurance Fund payments related to the liquidation process. This distribution represents surplus recoveries from the monetization of these Corporates’ assets. Once the Share Insurance Fund is repaid, any remaining funds (after monetization) must be distributed first to the capital holders, and then (should funds remain) as a pro rata dividend to each of the Corporate’s shareholders of record at the time of liquidation.

Since no distribution will be made, no accounting entries are necessary.

Since no distribution will be made, no distribution should be recorded in the Call Report.

For updates and more detailed information, visit these sites:

• Corporate Asset Management Estate Recoveries and Claims;
• NGN Questions and Answers;
• Corporate System Resolutions Costs; and
• NGN Program