Mr Cooper Group Inc (COOP)

[XOM]

DEBTORS ANSWER AND AMENDED COUNTERCLAIMS
Debtors' Answer and amended counterclaims in response to the complaint of JPM
September 11, 2009
http://www.kccllc.net/documents/0812229/0812229090914000000000003.pdf

Excerpts from 100+ pages of argument and response... IMO this doc is the "pièce de résistance" of the potential damages JPMC faces and windfall WAMUQ may receive.


DEBTORS' AMENDED COUNTERCLAIMS
1. This suit is brought to redress certain injuries that WMI has suffered as a result of fraudulent and preferential transfers of potential more than $10 billion in WMI assets to WMB ad subsequently to JPMC. [91]

4. WMI and WMB's financial condition ultimately resulted in regulatory action. On the Receivership Date, by order number 2008-36, the OTS closed WMB and appointed the FDIC Receiver. Immediately upon its appointment, the FDIC sold the majority of WMB's assets - having a book value of more than $300 billion - to JPMC in exchange for payment of just $1.88 billion, pursuant to the P&A Agreement. [91,92]

... JPMC thereupon booked an extraordinary gain, reflecting that it acquired WMB's assets at a significant discount to fair market value. Specifically, based upon JPMC's own accounting, the adjusted fair value of the net assets acquired was higher than the purchase price paid in the amount of $1.9 billion - an amount in and of itself more than the total consideration paid by JPMC. Moreover, JPMC has recently announced that it stands to
realize a $29 billion gain on WMB assets it purchased and marked down pursuant to the P&A Transaction based upon the actual value of such assets.

14. During this period, WMI had public debt obligations of approximately $7 billion, 3.5 million shares of preferred stock, and more than 1.7 billion shares of common stock. [93]

19. On June 30, 2008, the OTS completed an examination of WMB and identified various "supervisory issues" and a general weakened financial condition. Pursuant to this examination wMB's board of directors and management were instructed to construct a three-year business plan to be submitted to the OTS for its approval. This examination culminated on September 7, 2008, when the OTS entered into Memorandums of Understanding with each of WMI and WMB. The MOU entered into by WMB provided various measures aimed at improving its financial health, including, among other things, limitations placed on the ability of WMB to pay dividends, a requirement that WMB's board review and approve a "contingency capital plan," and incorporation of an asset reduction plan with respect to certain targeted assets. [94,95]

32. Between March 2006 and October 2007, in four instances, certain SPEs associated with WMI and its then subsidiaries issued the Trust Securities (TS) in connection with, and facilitated by, WMPF. The Trust Securities have an aggregate liquidation preference of approximately $4 billion and upon information and belief are currently worth at least as much. [98]

... The Trust Securities were offered and sold to "qualified institutional buyers" or "qualified purchasers" subject to a conditional exchange feature that operated to exchange the Securities into related classes of WMI preferred stock...

35. ...On February 24, 2006, the OTS responded by letter... indicating that it would consider the value of the TS in WMB's core capital... [99]

38. On September 24, 2008, the OTS notified WMI that an Exchange Event had occurred. [100]

39. ...On September 25, 2008, [the OTS] directed WMI to cause a Conditional Exchange, exchanging the TS for preferred shares of WMI.

40. ...Later that day, immediately after the OTS closed WMB, its assets were purportedly sold to JPMC.

41. ...Still later that day, just prior to 9:00pm EST, an employee of WMI executed an Assignment Agreement which purported to assign the right, title, and interest in the TS to WMB. [100]

42. Pursuant to section 4.08 of the Amended and Restated Trust Agreement, dated as of March 7, 2006, governing the TS, the TS were to be transferred to WMI in a Conditional Exchange at "the earliest possible date such exchange could occur. [100,101]

43. The transfer... is avoidable as a constructive fraudulent transfer of an interest in WMI's property that harmed WMI and its creditors. [101]

44. At 8:00am ET on the Petition Date, at a time when WMI was insolvent, WMI transferred the Trust Securities to WMB to JPMC, as successor in interest to WMB, for no consideration. [101]

46. JPMC is liable to WMI's estate as an intitial or subsequent transferee of the TS. On the Receivership Date and the Petition Date, JPMC knew or should have know of the transfers of the TS and about the financial condition of WMI and WMB. Thus, JPMC did not acquire its interest in WMI property in good faith and without knowledge of the voidability of the transfer of the TS. [101]


FIFTEENTH COUNTERCLAIM
Trademark Infringment Pursuant to 15 USC 1114
180. JPMC's continued use of the WaMu Marks, the Secondary Marks, and the WaMu Domain Names is intentional and willful. [128]
181. The aforesaid acts of JPMC constitute trademark infringment in violated of Section 32(1) of the Lanham Act. [128]
182. The aforesaid acts of Counterclaim-Defendants have caused, and are causing, great and irreparable harm to WMI and, unless JPMorgan Chase is permanently restrained by this Court, said injury will continue. [128]
185. WMI is entitled to recover treble damages under 15 USC 1117 by reason of the willful and deliberate acts of federal trademark infringement by JPMC. [128]


SIXTEENTH COUNTERCLAIM
Common Law Trademark Infringement
191. WMI is entitled to recover JPMC's profits and/or damages by reason of JPMC's acts of trademark infringement under the common law.[129]


SEVENTEENTH COUNTERCLAIM
Patent Infringement
203. WMI is entitled to an award of damages adequate to compensate WMI for the infringement that has occurred, together with prejudgement interest from the date infringment began. [131]
204. WMI is also entitled to increased damages, as well a finding that this case is exceptional, entitling WMI to attorneys' fees and costs. [131]
205. WMI is also entitled to a permanent injunction prohibiting JPMC's further infringement, inducement of infringement, and contributory infringement of the '985 patent. [131]


EIGHTEENTH COUNTERCLAIM
Federal Copyright Infringement (wamu.com)
212. ...WMI is entitled to relief including, but not limited to, injunctive relief, actual damages, and prejudgment interest. [132]


PRAYER FOR RELIEF (condensed) [133]
A. Dismissing JPMC's complaint with prejudice;
B. JPMC to pay WMI for capital contributions plus pre-judgment interest at highest applicable rate determined by the Court;
C. Declare Trust Securities (TS) are property of WMI; or
D. return TS or pay equivalet value plus highest applic. interest;
E. JPMC to pay WMI for Preferential Transfers plus highest applic. interest;
F. JPMC to pay WMI fair market value of the assets purchased from WMB at the time of the P&A Transaction, or pay the amount necessary to satisfy any claims WMI has against WMB in full, or in alternative avoiding the P&A Transaction to the extent necessary to satisfy any and all claims WMI has against WMB in full, in each case plus highest applic. interest;
G. Ordering JPMC to pay restitution to the Debtors in an amount equal to JPMC's unjust enrichment;
K-U. Copyright/Trademark/Patent relief.
V. Awarding WMI costs and attorneys' fees and expenses; and
W. Granting Debtors such other legal or equitable relief as is just.