Mr Cooper Group Inc (COOP)

[shiftaz]

Acceptance of the Plan of Reorganization

my comments in bold red, emphasis in bold black. this post is dedicated to diamondguru-one. welcome home

As noted earlier, only the debtor may file a plan of reorganization during the first 120-day period after the petition is filed (or after entry of the order for relief, if an involuntary petition was filed). The court may grant extension of this exclusive period up to 18 months after the petition date. In addition, the debtor has 180 days after the petition date or entry of the order for relief to obtain acceptances of its plan. 11 U.S.C. § 1121. The court may extend (up to 20 months) or reduce this acceptance exclusive period for cause. 11 U.S.C. § 1121(d). In practice, debtors typically seek extensions of both the plan filing and plan acceptance deadlines at the same time so that any order sought from the court allows the debtor two months to seek acceptances after filing a plan before any competing plan can be filed.

If the exclusive period expires before the debtor has filed and obtained acceptance of a plan, other parties in interest in a case, such as the creditors' committee or a creditor, may file a plan. Such a plan may compete with a plan filed by another party in interest or by the debtor.

equity commitee will file a plan when the current plan fails. earliest they are eligible to file is 61 days from march 26th.

If a trustee is appointed, the trustee must file a plan, a report explaining why the trustee will not file a plan, or a recommendation for conversion or dismissal of the case. 11 U.S.C. § 1106(a)(5). A proponent of a plan is subject to the same requirements as the debtor with respect to disclosure and solicitation.

In a chapter 11 case, a liquidating plan is permissible. Such a plan often allows the debtor in possession to liquidate the business under more economically advantageous circumstances than a chapter 7 liquidation. It also permits the creditors to take a more active role in fashioning the liquidation of the assets and the distribution of the proceeds than in a chapter 7 case.

Section 1123(a) of the Bankruptcy Code lists the mandatory provisions of a chapter 11 plan, and section 1123(b) lists the discretionary provisions. Section 1123(a)(1) provides that a chapter 11 plan must designate classes of claims and interests for treatment under the reorganization. Generally, a plan will classify claim holders as secured creditors, unsecured creditors entitled to priority, general unsecured creditors, and equity security holders.

if A > L, we are next in line. wmb bonds are not wmi's responsibility. our A is definitely > L

Under section 1126(c) of the Bankruptcy Code, an entire class of claims is deemed to accept a plan if the plan is accepted by creditors that hold at least two-thirds in amount and more than one-half in number of the allowed claims in the class. Under section 1129(a)(10), if there are impaired classes of claims, the court cannot confirm a plan unless it has been accepted by at least one class of non-insiders who hold impaired claims (i.e., claims that are not going to be paid completely or in which some legal, equitable, or contractual right is altered).

wmb bondholders objection don't mean sh!t. they're not wmi's responsibility. that's why rosen said they're prepared to file with or without their support.

Moreover, under section 1126(f), holders of unimpaired claims are deemed to have accepted the plan.

Under section 1127(a) of the Bankruptcy Code, the plan proponent may modify the plan at any time before confirmation, but the plan as modified must meet all the requirements of chapter 11. When there is a proposed modification after balloting has been conducted, and the court finds after a hearing that the proposed modification does not adversely affect the treatment of any creditor who has not accepted the modification in writing, the modification is deemed to have been accepted by all creditors who previously accepted the plan. Fed. R. Bankr. P. 3019. If it is determined that the proposed modification does have an adverse effect on the claims of non-consenting creditors, then another balloting must take place.

Because more than one plan may be submitted to the creditors for approval, every proposed plan and modification must be dated and identified with the name of the entity or entities submitting the plan or modification. Fed. R. Bankr. P. 3016(b). When competing plans are presented that meet the requirements for confirmation, the court must consider the preferences of the creditors and equity security holders in determining which plan to confirm.

A > L. creditors will be paid in full. equity is next.

Any party in interest may file an objection to confirmation of a plan.

equity committee will surely do this AFTER weil submits their plan on march 26th.

The Bankruptcy Code requires the court, after notice, to hold a hearing on confirmation of a plan. If no objection to confirmation has been timely filed, the Bankruptcy Code allows the court to determine whether the plan has been proposed in good faith and according to law. Fed. R. Bankr. P. 3020(b)(2). Before confirmation can be granted, the court must be satisfied that there has been compliance with all the other requirements of confirmation set forth in section 1129 of the Bankruptcy Code, even in the absence of any objections. In order to confirm the plan, the court must find, among other things, that: (1) the plan is feasible; (2) it is proposed in good faith; and (3) the plan and the proponent of the plan are in compliance with the Bankruptcy Code.

it is questionable if the debtor's plan, at its state from friday, is in good faith...

Good Faith
When examining good faith, the court attempts to ensure that the plan will fairly achieve a result consistent with the objectives and purposes of the bankruptcy laws. The most commonly used standard requires the court to look at the plan in light of the totality of the circumstances surrounding the creation of the plan. Other factors that courts may apply are:

•Whether the plan is proposed with honesty and good intentions
such as shutting out equity when A > L?
•Whether there is a basis for expecting that reorganization can be achieved
•Whether there was fundamental fairness in dealing with the creditors

Indications of Bad Faith
Courts have found certain factors that indicate that a plan may have been proposed in bad faith, including, but not limited to:

•Filing a bankruptcy case after losing a case in a non-bankruptcy court
•A finding that creditors have been manipulated in an effort to meet the requirement that at least one class of creditors accept the plan
•When a competitor of the debtor proposes a plan with the intent to eliminate competition
usually it's creditor vs. creditor. but now it's debtor vs equity. equity = competition. debtor tries to elmininate equity... if weil continues with this plan.
•Plans proposed as schemes for delay plan proposed wasn't to cause delay. but there was a delay
•Plans proposed solely for tax considerations

so how did we get our equity committee? prior to or during december, somebody proved to the us trustee that A will become > L... he agrees. weil/fdic/jpm submits their pre-drafted plan to us trustee in december for his review and notices equity is not there. meanwhile rosen maintains A < L the whole time. probably because he meant for jpm and fdic to be in the money...

if the us trustee knew earlier that A > L he would have assigned an equity committee when the case first opened. if he didn't think A > L then he surely wouldn't have assigned an equity committee during the middle of a case. if you want to argue that A <= L, then jpm and fdic shouldn't ever get paid. therefore A is always > L.


In order to satisfy the feasibility requirement, the court must find that confirmation of the plan is not likely to be followed by liquidation (unless the plan is a liquidating plan) or the need for further financial reorganization.


and another thing... commons can never be wiped under the current proposal. all the assets sufficiently fill in the liabilities leaving commons determinable only by the market as long as wmi stays open. if L > A then commons will be wiped. our A > L if we can afford to give fdic and jpm money....


http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter11.html#reorg