Mr Cooper Group Inc (COOP)

[fsshon]

Let's be careful with the allegations of Bankruptcy Fraud against a very good and well-connected smart law firm like Weil and Quinn. and let's just for a moment hold Rosie out of the conversation.

Here is why you have to go to the heart of the matter and look at the confirmation liars themselves, A&M.. These are the true culprits and criminals of this bankruptcy and may have been completely complicit and/or orchestrated the estate (debtors WMI bod) committing bankruptcy fraud and working with senior debtholders to jettison all classes of equity they were supposed to protect pre-bk. It was obvious in Dec 2007 that equity was no longer their concern, when they sold off the Securities now known as TPS and further dilluted the company with the TPG deal. Let's for a moment put ourselves at that BOD meeting in DEC when they had to raise capital for the banks because of the losses occuring in the mortgage portfolio. They needed the capital to prop up the balance sheet and sold off parts of the shareholders equity to do so. What would you have done, Bair was most likely putting WAMU on the OCC radar screen and the BOD was aware of the govt interference.

Now we get to the crux of the argument. Here is why Rosie and crew may be innocent of BK fraud. You (LG) are a bankruptcy attorney your job is to litigate the claims, make sure the senior creditors are paid and reorg the company so it can operate as a new entity without the "going concern" label. However you also have an opportunity to sue and litigate against the parties who may have been responsible for putting your clients in BK. You do your job, you sit down in March 2009 for a settlement conference, term sheets are passed around, the senior creditors are be asked to take a haircut because the FDIC wants your clients deposits and is not willing to budge. JPM and FDIC have already admitted in court docs filed in Oct 2008, that the deposits legally belonged to your clients and now they have changed their tune. The money belongs to your clients and should be in their bank account to pay the seniors off. What would you advise your client to do, give up the funds or fight for them?

You are fast approaching the filing deadline for a claim against the FDIC/JPM. You know this, JPM knows this, so the talks break down and JPM files its lawsuit to protect the assets it illegally acquired as part of the seizure and sale. You file against both the FDIC and JPM in DC district court and Rebuttal filing in BK against JPMC. THe FDIC joins in and the party gets started. Your job is to get the best recovery you can for your client, so you push really hard, the shareholders are all rooting for you, although you know the eventual outcome is they will be cancelled in a settlement. It sucks, but it is just the way the system is set up.

Anyway your clients really are a restructuring firm called A&M hired by the estate and are charged with valuation and administration, all you do is prosecute the claims like you have been hired to do. You fight JPM and the FDIC, like you were hired to do. You are GIVEN valuation reports from A&M that helps you decide whether or not you are going to try and get a GSA with the parties or keep prosecuting the claims, you want that 4.4B back. YOU are not a valuator, you are an attorney, so you just work off what is given to you and what you know as an attorney. In Dec 2009 you file an objection to the formation of any EC, because of the expense and it is the first time you have to tell the court you believe equity is an out of the money" constituency and you are working for their interests, no need to add an EC that will be a fee burden upon the estate. The judge does not listen to you and appts an EC because she believes the current Market Value of the equities justify the appt of an EC. EC is appointed and they are completely left out of the process, since they really are (by the financial standards and numbers you have been given) an out of the money group. You counsel your client and everyone agrees a GSA is the best way to get out of this expensive bankruptcy and back out in the real world. YOU ARE THE MESSENGER, NOT THE MESSAGE!

In Feb 2010 the Judge asked the parties if they were ready for her decision on the deposits, JPM and WMI both said go ahead your honor, it was Stark of FDIC that asked for more time. It should have been clear to us right there that they were working on a settlemet. Now time goes by and you end up in court again on March 3rd, the Judge is ready to render her decision, but this time you ask for more time to research it. Now what exactly do you need to research. As in TPS, the Judge ruled for Chase. It is possible Rosen knew the Judge was going to rule for Chase then also. TPS was way later, but look how she ruled for them. It is possible Rosen was tipped she was leaning in Chase's or FDIC's direction on the deposits. "MAYBE" You sit down with your client, they are telling you to settle (Smith testimony at confirmation, Kosturous testimony at confirmation) you do what you client wants, they don't want to take a chance on this judge ruling for FDIC or JPM, so a GSA is agreed to and you announce it to the court on March 12th.. Only problem, someone was trading a little too soon and it was obvious to a now PO'ed and very active equity that this occurred.


In Dec 2010 a Guy named Nate Thoma alerts the judge to some interesting trading patterns from the guys who were talking with A&M and are the Senior debtholders who were nice enough to help draft the GSA for all parties except those pesky shareholders, OH BOY, now the Fireworks get started and all you can do is litigate claims and wait for the hammer. To stop the Seniors from getting toasted and most like disallowed, you craft a new settlement with the "out of the money" group who now has everyone by the cohones, not much you can do about it now, they ( all the other parties) were greedy and you are just a counselor..and that Susman guy is one tough negotiator that you are not happy to be opposed to, so maybe you can sit on his side of the table without sitting there.

Sounds like Rosen is being forced to switch sides to me!