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The remaining Countrywide case involves R&W issues on purchased loans.
There are several counts in the complaint. It provides a very interesting look inside the Countrywide origination business. I do not remember the exact number of loans, but the potential recovery is many millions.
I will review this evening and report back.
Footnote 4 on p 7:
4 The Trustee also instituted several other adversary proceedings including the following which have been settled: (i) a proceeding against Countrywide Homes Loans, Inc. and Bank of America seeking indemnification under one loan purchase transaction that was settled for a payment to the Debtors by Bank of America of $950,000 (Adv. Pro. 10-00909), (ii) a preference action against Ketchum Communications that was settled for a payment to the Debtors by Ketchum of $161,500 (Adv. Pro. 11-00331) and (iii) a proceeding against Mortgage Cadence that was settled for a payment to the Debtors by Mortgage Cadence of $100,000 (Adv. Pro. 11-00330).
1 With respect to at least one loan on which the Trust has no current loss, Countrywide breached representations and warranties about the loan and the Trust initially suffered a loss. After Thornburg sued Countrywide, Countrywide settled the claim and directly reimbursed the Trust (not Thornburg) for the excess of the repurchase price over the net proceeds of liquidation.
Nice - thanks for the heads up Vince. I checked last week and there were none offered. Now, at 8. I haven't seen a reasonable offer in quite a while (the bid-ask has usually been 6-10).
Now, time to wait for news on some of these lawsuits...
Hmm really? I thought I just checked Zion's book on it and there were 60 available at $80 and 310 available at $100.
Well I am seeing absolutely no more bonds offered for sale. It's been a few days now. Seems to be a bid at $6.10 still.
Damages sought detailed within Intro have been updated.
Fantastic Chevy, exactly the type of info I was looking for! Let's make it a great investing 2013 starting tomorrow!
SUMMARY OF PENDING LITIGATION
A. Joel I. Sher, Chapter 11 Trustee for TMST, Inc. v. Barclays Capital Inc., United States District Court for the District of Maryland, Case No. 11-cv-01982
The Parties are currently engaged in discovery and taking fact depositions. To date, the parties have taken approximately ten (10) depositions, with several additional depositions scheduled. Completion of fact discovery and submission of a status report is currently due January 31, 2013. Expert reports are to be exchanged by March 14, 2013 and discovery, including expert discovery, is to be completed by May 10, 2013. A trial date is to be set during the telephonic status conference scheduled on February 7, 2013.
B. Joel I. Sher, Chapter 11 Trustee for TMST, Inc. v. RBC Capital Markets Inc., United States District Court for the District of Maryland, Case No. 11-01998
During part of 2012, the Parties exchanged discovery requests and began to produce documents. The Trustee, believing that RBC failed to comply with its discovery obligations filed a Motion to Compel Discovery with the District Court on September 4, 2012. The matter was referred by the District Court to the Honorable Susan K. Gauvey, U.S. Magistrate District Court Judge and a hearing on the Motion to Compel was held on December 11, 2012. Judge Gauvey has taken the matter under advisement. A Joint Status Report was submitted to the District Court on December 4, 2012. Discovery is stayed until a determination is made on the
Trustee’s Motion to Compel. Thereafter, the Trustee will seek the entry of a revised scheduling order.
C. Joel I. Sher, Chapter 11 Trustee for TMST, Inc. v. Goldman Sachs &Co., United States District Court for the District of Maryland, Case No. 11-cv-02796 and Joel I. Sher, Chapter 11 Trustee for TMST, Inc. v. Goldman Sachs &Co., American Arbitration Association of New York, Case No. 13-512-01054-12 (the “AAA”)
Goldman filed a motion to stay or dismiss the action or, in the alternative to dismiss the Complaint. Among other things, Goldman asserted that one or more agreements entered into between it and TMST required the dispute to be arbitrated. On April 19, 2012, the District Court entered an Order and Memorandum holding that under the agreements cited by Goldman an arbitrator (and not the District Court) must first determine the threshold issue of “arbitrability”, i.e. whether the dispute is subject to arbitration. Accordingly, the District Court stayed the case
and directed the parties to arbitration. The Trustee filed his Demand for Arbitration on the issue of arbitrability with the AAA on May 2, 2012, Goldman filed an Answering Statement and Counterclaim on May 29, 2012 and the Trustee filed an Answering Statement to the Counterclaim on June 21, 2012. The Parties conferred regarding arbitration candidates, but both agreed upon candidates declined appointment. The Parties are awaiting further action by the AAA.
D. Joel I. Sher, Chapter 11 Trustee for TMST, Inc. and Zuni Investors, LLC v. Countrywide Home Loans, Inc. and Bank of America Corporation, United States District Court for the Central District of California, Case No. 12-cv-07289 (“California District Court”)
The Defendants filed Motions to Dismiss prior to the transfer of the case. The California District Court held a hearing on Countrywide’s Motion to Dismiss the Amended Complaint and Bank of America’s joinder therein on November 27, 2012. At the hearing, the California District Court advised that it would hold Countrywide’s Motion to Dismiss in abeyance pending the outcome of mediation that it ordered be conducted before the Honorable Kathleen Roberts, U.S. Magistrate Judge (retired), in New York. In addition, the California District Court ordered that if the mediation does not fully resolve the case, Bank of America may thereafter file any motion to dismiss with respect to successor liability issues. Mediation is tentatively scheduled to begin in January 2013 and to conclude by March 1, 2013. No scheduling order has been entered in this case. Additionally, the parties are currently engaged in settlement discussions and are discussing the parameters of a potential settlement.
E. Joel I. Sher, Chapter 11 Trustee for TMST Home Loans, Inc. v. Luxury Mortgage Corp. and Commonwealth Land Title Insurance Company, United States District Court for the District of Maryland, Case No. 11-cv-03656
Commonwealth Land Title Insurance Company’s Motion to Dismiss Trustee’s Crossclaim and Motion to Dismiss the Third-Party Complaint were denied per Order and Memorandum Opinion entered on November 20, 2012 [Dkt. No. 103]. Mediation is currently scheduled for February 6, 2013, before the Honorable Susan K. Gauvey, U.S. Magistrate District Court Judge.
F. Joel I. Sher, Chapter 11 Trustee for TMST, Inc. v. JPMorgan Chase Funding, Inc., et al., United States Bankruptcy Court for the District of Maryland, Adversary Proceeding Case No. 11-0340
The Counterparties filed a joint omnibus Motion to Dismiss the Amended Complaint and a Motion to Withdraw the Reference. On July 23, 2012, the Counterparties’ Motion to Withdraw the Reference was denied by Order of the District Court. The Counterparties’ Motion to Dismiss the Amended Complaint has been fully briefed and is pending. No scheduling order has been entered in the case.
G. Joel I. Sher, Chapter 11 Trustee for TMST, Inc. v. SS&C Technologies, Inc., United States Bankruptcy Court for the District of Maryland, Adversary Proceeding Case No. 11-0033 and Joel I. Sher, Chapter 11 Trustee for TMST, Inc. v. SS&C Technologies, Inc., United States District Court for the District of Maryland, Case No. 12-cv-01446
The Trustee’s Complaint to Avoid and Recover Fraudulent Transfers was filed on April 29, 2011 in the United States Bankruptcy Court for the District of Maryland (Adv. Pro. 11-0033-DWK). SS&C’s Motion to Dismiss Trustee’s Complaint was denied in its entirety per Order entered on March 26, 2012 [Dkt. No. 24]. The Trustee’s damages asserted in his Complaint are not less than $606,306.00.
On April 25, 2012, SS&C filed its Motion to Withdraw the Reference, which is pending before the Honorable Richard D. Bennett. No scheduling order has been entered in the case; however, the parties have been engaged in discovery and production of documents.
CONCLUSION
The Trustee continues to administer the Debtors’ estates and will file such reports, papers and pleadings as are appropriate from time to time.
Dated: December 28, 2012
Source: EPIQ Doc #1741
http://dm.epiq11.com/TMI/Docket#Debtors=3157&RelatedDocketId=&ds=true&maxPerPage=25&page=1
More detail re: each case is contained within the court doc.
EI, do we have a rough schedule for any courtroom dates? I just noticed SAF Financial took about 2 years to settle so thought I would circle back and see where we are at, since 2 years on the others would put us about springtime. Thanks.
Order Granting Motion For Approval Of Partial Settlement and Compromise of Chapter 11 Trustees Motion Pursuant to Section 506(c) With Respect to MSR Sale Expenses (12/07/12)
Source: Epiq Systems [Docket 1720]
Motion to Approve Stipulation/Settlement (Partial) and Compromise of Chapter 11 Trustees Motion Pursuant to Section 506(c) With Respect to MSR Sale Expenses. Notice Served on 11/12/2012, Filed by Joel I. Sher. Responses due by 12/6/2012.
Introduction
By way of the Surcharge Motion the Trustee seeks to recover from the encumbered proceeds of the sale of the Debtors’ contractual mortgage servicing rights (the “Servicing Portfolio”) certain out-of–pocket costs and expenses incurred by the Debtors’ in the preservation and disposition of the Servicing Portfolio, as well as an amount to be reserved for the future payment of a trustee commission when the same is awarded by the Court. The Trustee now seeks approval of a partial settlement of the Surcharge Motion pursuant to which the Trustee, the Official Committee of Unsecured Creditors (the “Committee”), Credit Suisse Securities (USA) LLC, as collateral agent on behalf of itself and certain Counterparties (as hereinafter defined), and the Counterparties have agreed that certain funds will immediately be paid to the Debtors from the encumbered proceeds in satisfaction of the Trustees claims for reimbursement of the Debtors’ out-of–pocket costs and expenses incurred by the Debtors’ estates. The partial settlement does not resolve the Trustee’s remaining claim that a portion of the sale proceeds should be reserved for the payment of a trustee commission when awarded by the Court. The
consummation of the proposed settlement will afford the Debtors’ estate a significant recovery, as well as obviate the time, expense and uncertainty engendered by further litigation with respect to the matters resolved in the partial settlement. As the Trustee believes the terms of the partial settlement are reasonable and in the best interests of the Debtors’ estates, he requests that the partial settlement be approved.
The Partial Settlement
In order to avoid the expense and delay of litigating the issues raised in the Surcharge Motion solely with respect to the claims related to the Sale Expenses, the Trustee, the Collateral Agent, the Counterparties and the Committee have agreed, subject to the approval of the Court, to amend the MSR Litigation Settlement Agreement as follows:
a. From the Surcharge Reserve the Trustee will transmit the sum of $666,500.00 to the operating account of the Debtors free and clear of all liens, encumbrances and security interests of the Collateral Agent and the Counterparties;
b. From Surcharge Reserve, the Trustee will transmit the sum of $413,318.67 to the Collateral Agent for distribution to the Counterparties in accordance with the MSR Litigation Settlement Agreement; and
c. The Trustee will continue to reserve the sum of $2,253,359.78 in the Surcharge Reserve account, pending agreement or other resolution as to the amount of the reserve for the MSR Sale Commission.1
1 The reserve for the eventual payment of a trustee commission has been adjusted upward to reflect the additional sums distributed to the Collateral Agent under the terms of the MSR Litigation Settlement Agreement.
Source: Epiq Systems [Docket 1702]
Sher v. Countrywide Home Loans, Inc et al (Civil No. GLR-11-3192)
ORDER granting 71 Countrywide's Motion to Transfer Venue to the Central District of California; and directing Clerk to transfer this case to the Central District of California. Signed by Judge George Levi Russell, III on 8/21/12.
The case was assigned to John A. Kronstadt, then reassigned to Dean D. Pregerson on 8/30/12 due due to self-recusal.
"The Court has a financial interest in Countrywide Home Loans and Bank of America."
thanks for that info on that other bank stock nice run
Order Granting Trustees Motion to Approve Stipulation/Settlement and Compromise of Controversies in the MSR Litigation By and Among the Trustee, the Debtor-Defendants, the Collateral Agent, the Counterparties, and the Committee (8/28/12)
Source: Epiq Systems [Docket 1638]
The Trustee will transfer $71,670,314.13 to the Counterparties and $20,856,055.65 to the operating account of the Debtor.
Stipulation and Consent Order Continuing Deadline For The Filing Of Objections To Chapter 11 Trustees Motion Pursuant to Section 506(c) (7/27/12)
The deadline for the Collateral Agent and the Counter parties to file objections to the Motion shall be 9/28/12; and in accordance with the Preliminary Scheduling Order, if any objection(s) to the Motion is/are filed, the Trustee and any objector(s) will consult and file a report in accordance with Rule 26(f) of the Federal Rules of Civil Procedure, including a proposed schedule.
Source: Epic Systems [Docket 1630]
Joint Line Filing Stipulation and (Proposed) Consent Order Continuing Deadline for the Filing of Objections to Chapter 11 Trustees Motion Pursuant to Secton 506(c) on behalf of Credit Suisse Securities (USA) LLC and Credit Suisse International (7/27/12)
Source: Epiq Systems [Docket 1629]
Motion to Approve Stipulation/Settlement and Compromise of Controversies in the MSR Litigation By and Among the Trustee, the Debtor-Defendants, the Collateral Agent, the Counterparties, and the Committee (7/27/12)
As a result of their subsequent negotiations, the Parties have reached an agreement, subject to approval of this Court, with respect to the resolution of the MSR Litigation ONLY, as well as a procedure for the continuance of the Motion to Surcharge to allow the Parties to attempt the resolution thereof. The terms of the agreement are set forth in the “Settlement Agreement” attached as Exhibit 1 to the Motion. The materials terms of the Settlement Agreement provide as follows:
(a) within five (5) business days of the entry of an order approving the Settlement Agreement becoming final, the Trustee shall (i) transmit to the Collateral Agent for the benefit of the Counterparties the amount of $71,670,314.13 (the “Collateral Transfer”), representing an amount equal to 95% of the MSR Sale Proceeds (minus an escrowed reserve for the amounts that the Trustee seeks to recover in the Motion to Surcharge), which the Counterparties are entitled to receive in accordance with the Trial Order and allocation set forth in the Settlement Agreement; and (ii) transmit to the operating account of the Debtors the sum of $20,856,055.65, representing an amount equal to 5% the MSR Sale Proceeds and 100% of the Reimbursements, which sum the Debtors shall hold free and clear of all liens, claims, encumbrances and security interests of the Collateral Agent and the Counterparties.
(b) Each Counterparty hereby agrees that to the extent a Counterparty receives its share of the Collateral Transfer and the Trustee’s rights pursuant to Section 502(d) of the Bankruptcy Code, if any, become ripe by virtue of a final, non-appealable judgment entered in the Counterparty Litigation, each Counterparty against whom a final, non-appealable judgment has been entered shall disgorge and pay over to the Trustee any sum as required by: (x) such final, non-appealable judgment; or (y) any subsequent order (for which no stay with respect to such order is applicable or in effect). The Collateral Agent and the Counterparties reserve all rights to dispute the Trustee’s asserted application of Section 502(d) with respect to the amounts transmitted to the Collateral Agent and the Counterparties.
(c) No provision of the Settlement Agreement shall be construed as impairing or limiting the ability of the Counterparties to obtain distributions from the estates of the Debtors on account of their respective, allowed unsecured claims, or the Trustee or the Committee from objecting thereto.
(d) Following the transmittal of the Collateral Transfer, the Collateral Agent and the Trustee shall file a joint notice of dismissal with prejudice of Counts 1, 2, 3 and 5 in the MSR Litigation. Moreover, the Parties forever and finally waive all rights to seek reconsideration, rehearing, modification, review, and/or appeal of the MSR Litigation.
(e) The Parties shall jointly move for the entry of a stipulation and consent order providing for a sixty (60) day continuance of the deadline (which is currently July 30, 2012) by which the Collateral Agent and the Counterparties are required to file any objections to the Motion to Surcharge. The Parties further agree that, if the Court approves any such stipulation and consent order, the Parties agree to attempt a resolution of an agreed amount of all or part of the Surcharge Amounts.
(f) Simultaneous with the making of the Collateral Transfer, the Trustee will reserve, in a segregated and identifiable escrow account, the amount of $3,333,178.45 (pending agreement or other resolution as to the amount of the Surcharge Amounts), which represents the total amount sought by the Trustee in the Motion to Surcharge (the “Surcharge Reserve”), the entitlement to which, for avoidance of doubt, all Parties understand is disputed by the Collateral Agent and each of the Counterparties in its entirety.
(g) The Parties agree that the Settlement Agreement is a compromise only of the pending litigation and claims in the MSR Litigation. The Parties agree to reserve all rights and the Settlement Agreement shall have no effect with respect to the Counterparty Litigation, the Motion to Surcharge (except as set forth above) or any other contested matters and adversary proceedings.
The Trustee believes, in the exercise of his business judgment, after carefully reviewing the facts and applicable law that the proposed settlement is in the best interests of the Debtors’ estates and will result in a significant cash infusion into the bankruptcy estates, while at the same time eliminating the risks attendant to complex litigation and appellate practice as well as the necessity for the estates to incur substantial professional fees in connection therewith. The settlement brings an immediate end to the costs that the Trustee would otherwise have to incur to continue to defend this matter with the risks inherent in any litigation and allows the estates’ resources, as supplemented by the recovery achieved herein, to be redeployed to other matters. In making a judgment that the settlement is within the range of appropriate settlements, the Trustee has considered all evidence available to him during the course of the extensive MSR Litigation. Finally, the settlement provides for a mechanism for the Parties to attempt to resolve the recoveries sought in the Motion to Surcharge in an informal manner before resorting to litigation, if necessary, and preserves the estates’ rights to recover or obtain repayment any portion of the Collateral Transfer which any Counterparty is ordered to disgorge pursuant to Section 502(d) or otherwise.
Responses due by 8/20/2012.
Source: Epiq Systems [Docket 1628]
Yeah Vince 1-2% recovery seems like a pretty good conservative scenario (well, not as conservative as dismissal, but barring that...). Serious upside in all other scenarios. Seems like a good risk-reward around 80-ish. Would still like to pick some up a bit cheaper for a better MoS.
Good digging Olmsted, I've been so busy at the day job to respond in my own backwards way as usual. I tend to look at worst-case scenarios, and so let's say what you found is correct. I see this as a free call option on all the lawsuits. In an odd way it reminded me of my old Yahoo! investment when that too was a free call option, on their American operations. But I digress....
$80 cash / per share ---- so 100% of where I've bought
Let's use say $10 MM a year for cash burn so that's $33 / share a year there.
I'll use another 2 years of court...since as Chevy pointed out hopefully settlements speed up a tiny bit.
So,that brings us down to $14 / share after a few years. Now for the court proceedings, which I like to back into.
If we can agree the total amount is for about $1.95 Billion then we can calculate some scenarios.
@ 1% recovery = $65 / share + $14 = $79
@ 2% recovery = $130 / share + $14 = $144
@ 5% recovery = $325 / share + $14 = $339
@ 10% recovery = $650 / share + $14 = $664
I could go on but I think you see my investment theory. Usually, I search for 2 - 4 X on my investments. To get that and assuming your scenario is true...only about 2.5% of the total lawsuit amount is needed.... which seems extremely possible with what I've read in EI and Chevy's DD. I like the odds and that's why I've played the risk/reward at these levels.
No legalese in just showing that I make bets where I see good risk/rewards.
Just found the item EI was discussing wrt Credit Suisse's interest in the MSR sale.
http://www.sec.gov/Archives/edgar/data/892535/000119312512077647/0001193125-12-077647-index.htm
From the filing:
In the Decision, the Bankruptcy Court confirmed its prior ruling that the Debtors’ bankruptcy estates hold approximately $16,882,896.95 plus earned interest, representing unpaid servicing fees and advances reimbursed by the purchaser as part of the MSR sale, free and clear of the lien held by Credit Suisse, and additionally determined that the Debtors’ bankruptcy estates are entitled to and hold 5% of the proceeds of the purchase price ($79,302,557.53) of the MSR sale free and clear of the lien held by Credit Suisse, approximately $3,965,127.00, plus earned interest, for a total recovery of approximately $20.8 million.
This tells me that the cash the debtor has which did not come from the MSR sale is the debtor's alone. $75m of the cash from the MSR is Credit Suisse's.
The waterfall looks to me like (based on May Op Report, EPIQ #1603)
Cash: 106.08m
Credit Suisse Lien: 74.8m
Post-petition liabilities: 7.32m
Cash burn: ?
Lawsuit settlements/awards: ?
23.96m + lawsuit proceeds - cash burn
or, for 300,000 notes:
~$80 + lawsuit proceeds - cash burn
Not really a margin of safety unless one expects some good legal wins. To me, valuing this has become a question of estimating proceeds from litigation vs. how fast trustee and legal fees accumulate.
Someone correct me if I have misunderstood something.
EI -
Ah - so $74.8m of the $106m in cash on the trustee's operating report is really Credit Suisse's? That means only $30m (or $100 per note) for the senior notes, plus any income from lawsuits, minus legal and trustee fees. That seems more in line with where it's currently trading, and less of a margin of safety.
Is my understanding of Credit Suisse's security interest correct?
I'm not sure I quite follow your analogy of the endgame potentially being "WAMUQ-like". Do you mean the drastically reduced recovery for WAHUQ holders in progressive PoRs would be analogous to the recovery prospects for TMST Senior Subordinated?
The end result could be WAMUQ-like down the road.
Stipulation And Consent Order Resetting Deadline For The Filing Of Objections To Chapter 11 Trustees Motion Pursuant To Section 506(c) (6/29/12)
Deadline to file objections is 7/16/12.
The Credit Suisse role is as Collateral Agent. The Counterparties are UBS, Citigroup, JPMorgan Chase, Bear Stearns Investment Products Inc. and RBS. Each has the ability to file objections.
Needless to say, the Trustee is also pursuing much larger claims against some of these parties. The end result could be WAMUQ-like down the road.
Very true, and I wouldn't even be here on this one if it wasn't the top of the food chain.
I feel WaMu was just a huge mess that schools will study and dig through for years.
Even a lot of holders of WAHUQ got burned as bad as me, if not worse. I traded the pop in DIMEQ when they stated there was a settlement agreement in court and made a few dollars back.
Senior Notes have a "guarantee claim".
In regards to AFDFT:
For purposes of calculating the recovery for General Unsecured Creditors, the Subordinated Notes Guarantee Claims are included as part of the Total Unsecured Claims. By reason of the subordination of Class 7 Claims to Class 6 Claims, the distribution otherwise payable to holders of Subordinated Notes Guarantee Claims would be paid to the holders of the Senior Note Guarantee Claims
Anyone involved in WAMUQ as a WAHUQ (PIERS) holder should understand the plight of the holders of $1.335 billion in Senior Subordinated Notes.
I always viewed DIMEQ as a long-shot. I had a tiny holding, but poured my money in the WAMUQ case into WAHUQ instead.
No DIP financing needed.
The Debtor has access to cash on deposit to pay expenses to complete the liquidation. Since there is no true ongoing operations, no need for additional funding.
Back to the cash. The majority of the cash was generated when the Servicing Portfolio was sold. Select Portfolio Servicing, Inc. paid $79.3 million. SPS also reimbursed the Trustee $16.9 million for net unreimbursed advances.
Credit Suisse has a security interest in 95 percent of the purchase price (subject to certain adjustments for sales costs and accrued interest). The adjusted amount was about $74.8 million at the end of May.
The Court found that the Debtor can retain 5 percent of the sales proceeds and the advance repayments. This amount was $20.8 million.
The Trustee is currently trying to recover "necessary costs and expenses" that relate to the creating the benefit for the secured claim holder, subject to Section 506(c). The Encumbered Amount is $3.3 million, of which $1.1 million would be immediately paid to the Debtor and the balance of $2.2 million would be held in escrow pending the Court's determination of the Trustee's commission down the road.
DIMEQ: the security which shall not be named
Still somewhat bitter, but it taught me the lesson to be extremely conservative when it comes to anything involved with the courts.
Not a stupid question at all. It's an easy detail to miss for sure.
The design (and we think real beauties of our board here) is that it's really easy to go back and read past posts..you'll find lots of meat on the bones of those past posts because the story hasn't changed here. One of the most frustrating things about boards like WAMU or dimeq etc..imo was important info was quickly buried by hundreds and even thousands of conflicting & confusing posts every day. It was a tedious boring (if not impossible) task to keep it all straight.
It's totally the opposite here. We're like nuclear submariners sitting under the polar ice caps...you may not see us on the surface making noise very often ...but make no mistake...we're here.
These Senior Note holders recovery is not dependant on how many Ihub moths get attracted to the flame so the only 'noise' that really matters is happening inside a courtroom...it's a beautiful thing...Pagz did you 'a solid' ;)
Though, as EI and 56 Chevy have pointed out - if there were claims senior to these notes then ownership of Adfitech would have gone to them, not us.
Hey Vince - thanks for the welcome. And regarding your twitter project - for purely selfish reasons I hope it hits a lull! I can't buy these through my normal broker, and waiting for my Zions account to get active!
That's a real simple answer to a really stupid question. I don't know why - but somehow the word "secured" got stuck in my head - though of course I see now that the notes are not secured.
Regarding the lack of a following, it probably is as you describe - I just am paranoid that there's some liability (counterparty claims, repo deals, etc.) above us somewhere that aren't reflected in the trustee operating report. But unlikely. Also - there are numerous subsidiaries: f/k/a Thornburg Mortgage, Inc., TMST Acquisition Subsidiary, Inc. f/k/a Thornburg Acquisition Subsidiary, Inc., TMST Home Loans, Inc. f/k/a Thornburg Mortgage Home Loans, Inc., and TMST Hedging Strategies, Inc. Have we checked that those other unsecured claims don't get paid at the subsidiary level before the waterfall to the TMST, inc. parent?
I'm looking into that now. Have been burned in distressed before (dimeq comes to mind) and therefore wary of the "unknown unknowns."
That said, as far as I can tell so far, this looks like a pretty clean situation.
Thanks for the welcome!
Being gone all day, Chevy you just barely beat me to it responding with pretty much the same answers.
BTW: Olmsted is a recruit from Project TwitLinkBook aka Pagz trying to preach the gospel on our illiquid and goofy securities through word of mouth and social media.
Welcome aboard!
Welcome to the board Olmsted.
I'm sure EI will respond but I have a couple comments/questions.
My general concern is that this seems to good to be true - and I'm trying to figure out what I'm missing.
A basic question - read the operating report - why is the ~$270m of senior note claims not recorded under pre-petition secured liabilities?
I don't understand their limit order policy. I've never before been restricted to putting in a bid only a certain amount below the ask.
A basic question - read the operating report - why is the ~$270m of senior note claims not recorded under pre-petition secured liabilities? Only $38m has been discharged with the Adfitech reorg, correct?
My general concern is that this seems to good to be true - and I'm trying to figure out what I'm missing. EG are the senior notes guaranteed by some sub that is long gone; after the Adfitech reorg, were they lumped in pari-passu with other claims; etc...
I don't see any DIP. Accrued professional fees are on the monthly operating report. So no surprises there...
(accidentally posted this over at the commons board. oops)
I almost forgot to mention that at the end of the day yesterday Zion's gave me a call and asked if I wanted to bust my trade since apparently it was so much higher than the recent $50-$60 ones. I told them how that was the lowest possible limit I could put in and asked how I could get in on the even lower prices they just told me. Best they could do was their reply....such is the sad uphill battle of the retail investor.
FYI, I doubled down at $80 today to re-balance and re-allocate. The ask on Zion's Direct was (and still is) $100, so I put in the lowest allowable limit order and was filled this afternoon.
Question for the board: Anybody else buying under $100 (which I consider a large margin of safety)? If not, I might start voicing this around the Twitter value world to see if anyone is interested....the bond traders seem to keep to themselves somewhat.
As Chevy and me have discussed, this is the modern (and poor man's version) of activist investing using the social network effect.
Have a great day,
-Pagz
Encouraging news! We've waited a little over a year just to get to the point we're at least seeing the word - 'arbitration' in dockets.
Monthly Operating Report Apr. 30, 2012
Docket # Docket Date
1579 04/26/2012 Monthly Operating Report for Filing Period April 1, 2012 through April 30, 2012 on behalf of Joel I. Sher Filed by Joel I. Sher.
http://chapter11.epiqsystems.com/TMI/docket/Default.aspx?rc=1
Sher v. RBC Capital Markets, LLC (Civil No. BEL-11-1998)
Order Referring Case to Magistrate Judge Stephanie A Gallagher for Settlement. Signed by Judge Benson Everett Legg on 4/12/12.
The parties have not consented to proceed before a United States Magistrate Judge for all purposes. Accordingly, the case will remain before Judge Legg. The parties have advised, however, that they believe a settlement conference would be beneficial after the completion of fact discovery. Judge Gallagher will, therefore, be requested to preside over such a conference in October 2012. If settlement negotiations are unsuccessful, Plaintiff’s Rule 26(a)(2) disclosures will be due 30 days after the completion of the final settlement conference.
Settlement Conference scheduled for 10/04/12 at 9:30.
Source: PACER [Docket 44]
Sher v. Goldman Sachs (Civil No. CCB-11-2796)
Order granting Motion to Compel Arbitration; the action is Stayed and Administratively closed. Signed by Judge Catherine C. Blake on 4/19/12.
Judge Blake concluded, first, that the arbitration clause is valid, and second, that the parties have agreed to have the threshold question of the arbitrability of TMST’s claims decided by the arbitrator. Accordingly, the court granted Goldman Sachs’s motion to submit the matter to arbitration on the question of arbitrability and stay the action pending arbitration.
https://ecf.mdd.uscourts.gov/doc1/09314256399
With 300,000 Senior Notes issued if it all ended today and Sher didn't get another dime from the banks the Senior Notes would fetch $353 based on $106M assets (I'm not sure there is $106M but I'd have to look). To do the math divide whatever the assets are by 300,000.
$106,000,000 divided by 300,000 = $353
Hopefully we get some kind of news soon. It seems time never grinds so slow as when you're waiting on the courts.
i remember before we talked about if the money was liq. tma.gb would get a certain amount per share.
currently they have 106 mill in cash any idea what that would come out to per share. and the total shares outstanding
This ? is to either 56chevy or EI Thanks!
ZD was detailing 288(5) at 15 Ask.
FINRA shows the last transaction on 4/26/12 as 50,000 at 6.
Sorry, that's what I have too. I've been keeping an eye on it so I'll keep you updated.
can u give me a curent ask price ? yesterday i saw 150 on the ask from etrade crazy since its trading at 60 today
I tested it and it looks like it has to be within 2 of the posted ask on Zion.
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Sr Subordinated Note holders have a claim of $1.3 billion, while Jr Subordinated Note claims are $213.8 million.
All claim amounts listed above do not take into account any post-petition interest payable from the filing date forward.
Court - Case Numbers- Defendant(s)
USBC Maryland | Docket Date | USDC Maryland | Defendant(s) | Damages | Recovery |
10-00137 | 3/2/2010 | 10-01895 | SAF Financial et al | $22 Million | Settled for $6.5 Million |
11-00329 | 4/28/2011 | 11-01982 | Barclays Capital Inc | $94 Million | Settled for $23 Million |
11-00337 | 4/29/2011 | 11-03192 | Countrywide Home Loans | / | Settled for $3.1 Million |
11-00338 | 4/30/2011 | 11-02796 | Goldman Sachs | $71 Million | Undisclosed |
4/30/2011 | 11-01998 | RBC Capital Markets LLC | $35 Million | Settled $31.125 Million | |
11-00340 | 4/30/2011 | JP Morgan Chase et al | $1.3 Billion | RBS Settled for $23.5M |
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