***Delaware Bankruptcy = Zeroing Equity = Bring Assets to life later***
Here are two cases that factually resemble each other with TWO MAIN COMPONENTS that was EXACTLY the SAME in both cases in what the original planners were trying to accomplish.
1) Hide the REAL value in the bankruptcy case and zeroing out Equity. 2) Then recover all of that value after equity was cancelled. Now after the exit of chapter 11 bankruptcy and after "Fresh Start" accounting with the issuance of new shares, the Hedge Funds would again reap hundreds of millions of dollars taken legally from the original share owners of Kmart. Of course, zeroing out the original share owners.
In Kmart, equity was cancelled, no escrow shares issued and no equity committee that had any strength with the court. The most valuable asset was the real estate Kmart owned or in other words the land their stores occupied. Of course, Eddy Lambert used the newly invented high equity price to purchase Sears and now operates under Sears Holdings. With equity cancelled, they issued new equity for $25.00 a share and each quarter, they started adding back the real estate value that was omitted from the bankruptcy former share owners. After about 18 months, their new share price hit a high of $171.00 a share before starting a long descent as there was no more juice.
In the case of WaMu, Rosie and the original Piers planners failed to zero out equity as the players that tried so hard were caught for insider trading and labeled "colorable" by the Delaware bankruptcy judge. They were almost ready to lose their standing in society, lose their license, potential conviction and jail time in their quest to zero equity. And for what? I can say without any doubt it was NOT ONLY for tax attributes in a fifty cent shell company that many (not I) said could never return anything substantial.
No doubt AZCowboy, myself and others will be correct in our overall assessment in how WMIH, Escrow Shares play out in the final chapter which could start any day at a Brokerage account near you but this account must have Escrow Shares to participate in the LARGER picture.
Think about this. If WMIH were going to do a series of smaller mergers versus purchasing original assets from WMILT with newly authorized common/preferred shares, why haven't they? No excuses, they have had plenty of time to do one or two mergers a year since 3/20/2012 but have done NONE to date. So, either you believe this entire case is a further travesty or one would have to believe in WMIH purchasing assets from WMILT as outlined before.
There were a couple of investment decisions one had to make before the deadline of 2/8/2012 to exchange former WaMu equity for NewCo/WMIH Shares and Escrow Shares. The following may explain differences with what one investor believes versus another.
Just know this, everyday that goes by without any type of asset purchase just proves our point of long ago that when WMIH does issues their 8K filing discussing their next move, it will have to do with former WaMu assets that are now owned by Escrow Share owners who are now owners of the former WaMu Estate!
Piers Investors DID NOT receive recent NewCo/WMIH Shares and have NEVER received Escrow Shares/Markers in return for their investments - Rather, they received interesting tax challenges
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Equity Investors received and abundance of NewCo/WMIH Shares AND Escrow Shares which may return unheard of and massive returns.
