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The trustee will most likely file a plan of liquidation.
Holders of Senior Notes would receive cash up the claim amount for the class.
With which they will do what?
RBC Capital Markets paid the $30.125 million settlement on March 7, 2017, according to the Monthly Operating Report filed today by the trustee for the month of March. Cash on hand now totals $66.6 million at March 31, 2017.
Amended Bond Designation Increasing amount from $42 Million to $68 Million Filed by US Trustee - Baltimore (3/20/17)
Source: PACER [Docket 2505]
Order Granting Motion to Approve Stipulation/Settlement And Compromise Of Controversy Between The Trustee And RBC Capital Markets, LLC (2/27/17)
Source: PACER [Docket 2495]
Trustee should have about $67 million in cash upon RBC payment.
Just a quick comment, that the last trade price of $17.50 that I saw posted would be a multi-year high for our notes:
http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?symbol=THMR3703969&ticker=C170460
Motion to Approve Stipulation/Settlement and Compromise of Controversy Between the Trustee and RBC Capital Markets, LLC. Notice Served on 1/10/2017, Filed by Joel I. Sher. Responses due by 1/31/2017 (1/10/17)
RBC has agreed to pay the Trustee $30,125,000.00 in full and final satisfaction of any and all claims, demands, obligations, liabilities, and causes of action of whatsoever kind and nature asserted in, which could have been asserted in, arising out of or related to the allegations set forth in the Complaint and/or the District Court Action, including, but not limited to, claims arising out of or related to any repo transactions entered into between RBC or any of its affiliates and any of the Debtor releasing Parties, margin calls in respect of such transactions, and the liquidation of collateral posted by the Debtor Releasing Parties in respect of such transactions.
Payment will be made within 10 business days of entry of an order granting this Motion approving the Settlement Agreement in its entirety.
Each Party shall bear its own legal fees, costs, and expenses.
Within three business days after receipt of the Payment by the Trustee, (i) the Parties shall file with the Circuit Court a stipulation of dismissal of the Consolidated Appeal with prejudice, and (ii) the Trustee shall file a line with the District Court marking the Judgment as settled and satisfied.
On the 8/26/15, the District Court (Judge George L. Russell, III) issued a Memorandum Opinion and Order [Dkt. Nos. 152 and 153 in District Court Action, respectively] denying RBC’s Motion for Summary Judgment, granting the Trustee’s Cross Motion for Summary Judgment, and entering judgment in the amount of $26,259,118 plus prejudgment interest at the rate of nine (9) percent from August 14, 2007 through the date of judgment.
In the Memorandum Opinion, the Court ruled, inter alia, that RBC breached the MRA by failing to provide credit to TMST for the liquidated MBS in the amount of the price for the MBS from a generally recognized source determined as of the default date and that certain take down prices assigned by RBC to the MBS on the default date were the relevant and appropriate measure of damages as compared to the amount actually credited by RBC.
1 The amount of the Judgment with pre-judgment interest totals $45,256,330.87 (inclusive of $18,997,212.87 of pre-judgment at the rate of nine (9) percent from August 14, 2007 through the date of judgment.
Source: PACER [Docket 2472]
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 (11/16/16)
Order granting Motion to Stay Enforcement of a Judgment or, in the Alternative, Motion to Approve a Supersedeas Bond; staying this Court's 08/26/15 judgment pending the disposition of RBD Capital Markets, LLC's appeal; approving the supersedeas bond.
Signed by Judge George Levi Russell, III on 11/16/2016.
Source: PACER {Docket 180]
Supersedeas bond is in the amount of $54,308,097.04 was approved.
Order of USCA "consolidating" USCA Case Nos. 16-2130 and 16-2196 as to 176 Notice of Cross Appeal filed by Joel I. Sher and 154 Notice of Appeal filed by RBC Capital Markets, LLC. (10/17/16)
Source: PACER [Docket 179]
USCA Case Number 16-2196 for 176 Notice of Cross Appeal filed by Joel I. Sher. Case Manager - Richard Sewell (10/17/16)
Source: PACER [Docket 178]
USCA Case Number 16-2130 for 154 Notice of Appeal filed by RBC Capital Markets, LLC. Case Manager - Richard Sewell (9/30/16)
Source: PACER [Docket 174]
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
Notice of Rescheduled Hearing Amended Complaint filed by Plaintiff Joel I. Sher, Chapter 11 Trustee. Hearing scheduled for 8/31/2016 and 9/1/2016 at 10:00 (7/22/16)
Source: PACER [Docket 240]
Hearing Set On Motion to Compel Production Of Documents By Non-Party MatlinPatterson Global Advisers, LLC filed by Defendant Credit Suisse Securities (USA) LLC, Defendant JP Morgan Chase Funding Inc., Defendant Citigroup Global Markets Limited, Defendant Citigroup Global Markets, Inc., Defendant Credit Suisse International, Defendant RBS Securities, Inc. (f/k/a Greenwich Capital Markets Inc.), Defendant Greenwich Capital Derivatives Inc., Defendant Royal Bank of Scotland PLC, Defendant UBS AG (as successor to UBS Securities LLC). Hearing scheduled for 7/28/2016 and 7/29, 2016 at 10:00 AM at Courtroom 2-A, Baltimore - Judge Alquist (6/29/16)
Source: PACER [Docket 234]
Not yet.
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
Updated Timeline
Requests for production of documents, if any, shall be served no later than 8/19/16.
Interrogatories, if any, shall be served no later than 9/16/16.
Requests to admit, if any, shall be served no later than 9/16/16
All fact discovery shall be completed by 12/16/16
Source: PACER [Docket 206]
Request for on behalf of Credit Suisse International, Credit Suisse Securities (USA) LLC, Greenwich Capital Derivatives Inc., RBS Securities, Inc. (f/k/a Greenwich Capital Markets Inc.), Royal Bank of Scotland PLC - Request for Hearing on Defendants' Joint Motion to Compel Production of Documents by Non-Party MatlinPatterson Global Advisers LLC (5/12/16)
Source: PACER [Docket 211]
Order Consolidating Miscellaneous Proceeding 16-90003 Into Adversary Proceeding 11-0340-NVA. Interdistrict Transfer from SDNY Manhattan (5/06/16)
Defendants Joint Motion to Compel Production of Documents by Non-Party MatlinPatterson Global Advisers LLC.
Source: PACER [Docket 208]
Monthly Operating Report (3/2016)
http://dm.epiq11.com/TMI/Document/GetDocument/2796570
Monthly Operating Report (2/2016)
http://dm.epiq11.com/TMI/Document/GetDocument/2771464
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
RBC is not appealing the $26.3 million judgement, only the 9% rate for prejudgement interest.
It is seeking prejudgment interest in the amount of $2,210,224.53, composed of prejudgment interest at the of 1.15% from 8/14/07 to 4/30/09 and prejudgment interest at the rate of 1% from 5/01/09 to 8/26/15.
The difference in prejudgement interest is sizeable - $16.5 million.
Source: PACER [Docket 155]
Monthly Operating Report (1/2016)
http://dm.epiq11.com/TMI/Document/GetDocument/2763383
RBC is not appealing the $26.3 million judgement, only the 9% rate for prejudgement interest.
It is seeking prejudgment interest in the amount of $2,210,224.53, composed of prejudgment interest at the of 1.15% from 8/14/07 to 4/30/09 and prejudgment interest at the rate of 1% from 5/01/09 to 8/26/15.
The difference in prejudgement interest is sizeable - $16.5 million.
USCA has yet to docket the appeal in the RBC case (3/17/16)
The clerk has sent notice to the USDC on 9/23/15, 12/8/15 and 3/17/16 indicating that an appeal had been received by this office but would not be docketed until action by the district court.
Source: PACER [Docket 162]
Notice of Appeal by RBC Capital Markets, LLC. (9/22/15)
Fourth Circuit Court of Appeals
Source: PACER [Docket 154]
Good for the note holders.
thats good for the company and shareholders or nothing
TMST received $5,924,009 from RMBS Settlement Fund on 10/27/15.
Monthly Operating Report (10/2015)
http://dm.epiq11.com/TMI/Document/GetDocument/2685430
Monthly Operating Report (9/2015)
http://dm.epiq11.com/TMI/Document/GetDocument/2675648
Monthly Operating Report (8/2015)
http://dm.epiq11.com/TMI/Document/GetDocument/2668990
The waterfall:
Senior Notes
Senior Subordinate Notes
Subordinate Notes
Preferred Stock
I am sure!
are u sure nothing to shareholders after all settelment
I would like to know if there will be any overflow for the shareholders after they will give the creditors their money
Last trade now up to 17.1 it looks:
http://finra-markets.morningstar.com/BondCenter/BondTradeActivitySearchResult.jsp?ticker=C170460&startdate=08/01/2012&enddate=11/01/2013
The scenario you state would be quite interesting, never thought it would even be possible but doesn't take an insane recovery rate to get there in theory!
Bond trading activity has really slowed down.
I am confident large blocks have been in the hands of hedge funds for some time.
If the case against JPM et all produces more then enough cash to make the Senior Note holders whole (including post-petition interest), any waterfall would result in the Senior Subordinated Secured Note holders gaining control of the shell and the NOLs.
And that would be one truly amazing result!
ZD BondStore details 10 x 17.375 (8/31/15)
The book details 25 on the offer with a minimum of 5. There is an additional 4 available at 25.03.
Mental note:
$45MM / 0.3MM Notes outstanding = $150 per
Last MOR had ~ $115 per note of assets currently
$115 + $150 = $265 per vs. $160 for the last trade:
http://finra-markets.morningstar.com/BondCenter/BondTradeActivitySearchResult.jsp?ticker=C170460&startdate=08/01/2012&enddate=11/01/2013
Overly simplistic, but anyway value remains intact.
-Pagz
Judge Rules for Thornburg Mortgage in Suit Against RBC (8/28/15)
Failed mortgage lender entitled to $45 million after ruling that RBC undervalued seized assets
A federal judge has awarded the court-appointed trustee overseeing the liquidation of Thornburg Mortgage Inc. $45 million in his crisis-era lawsuit against Royal Bank of Canada, finding the bank shortchanged the mortgage lender when it seized and subsequently sold some of its assets.
U.S. District Judge George L. Russell III ruled Wednesday in Baltimore that RBC Capital, the lender’s investment-banking arm, improperly sold the assets backing repurchase agreements the mortgage lender had used to fund its business. RBC seized the mortgage securities after Thornburg defaulted during the turmoil in the mortgage market in August 2007.
In granting the Thornburg trustee’s motion for summary judgment, the judge said RBC undervalued the seized mortgage-backed securities at issue by $26.3 million. With interest, Thornburg is owed $45 million in damages.
A spokeswoman for RBC didn’t respond to requests for comment.
Joel I. Sher, the bankruptcy trustee overseeing Thornburg’s liquidation, sued RBC Capital Markets in a breach-of-contract lawsuit over what he said were improper margin calls and the subsequent seizure and sale of $573 million in mortgage-backed securities Thornburg financed through RBC.
Before its collapse, Thornburg was a publicly traded real-estate investment trust that invested in residential mortgages and mortgage-backed securities.
The company financed its business, including its purchase of mortgage-backed securities, through a series of repurchase, or repo, agreements and swaps deals with banks and securities firms like RBC. Those mortgage-backed securities were typically then pledged as collateral in the deals.
Mr. Sher claimed RBC breached the provisions of the repo deal by improperly valuing Thornburg’s collateral to create deficits that justified its inflated margin calls.
The trustee filed similar lawsuits against other banks, including Barclays PLC and Goldman Sachs Group Inc., alleging they made improper margin calls that helped drive the mortgage lender into bankruptcy. Barclays settled last year for $23 million. The Goldman suit was settled last year for an undisclosed amount.
Mr. Sher also sued some of the biggest players in Wall Street’s mortgage-finance business for nearly $2 billion, claiming a number of banks—including J.P. Morgan Chase Co. , Citigroup Inc. and Credit Suisse Group AG —engaged in series of “collusive” and “predatory” schemes that resulted in Thornburg’s demise. The banks, in court papers, have denied wrongdoing.
A judge last year dismissed the bulk of that lawsuit but said Thornburg could still go after the banks for breach of contract and other claims totaling about $1 billion. The suit is pending.
Thornburg, based in Santa Fe, N.M., filed for chapter 11 bankruptcy-court protection in May 2009. Mr. Sher was named the trustee of Thornburg, now named TMST Inc., in 2009 after it was discovered the company’s former managers had used the lender’s employees and assets to launch a new company.
http://www.wsj.com/articles/judge-rules-for-thornburg-mortgage-in-rbc-capital-suit-1440769477
Judge orders RBC to pay $45 million in housing crash suit (8/28/15)
A federal bankruptcy judge ordered a division of the Royal Bank of Canada this week to pay about $45 million in damages for undervaluing assets it seized from a now-defunct real estate firm in the 2007 housing collapse that fueled the recession..
Judge George L. Russell found that RBC Capital Markets LLC extended credit to Thornburg Mortgage Inc. in 2007 based on a bid for the company's mortgage-backed securities that was lower than RBC's internal valuation when it had declared Thornburg in default several days earlier.Russell held RBC liable for $26.26 million — the difference between the two values — plus interest.
RBC declined to comment. The money will be distributed to creditors of Thornburg, which is now known as TMST Inc.
Thornburg, a large real estate investment trust based in New Mexico and registered in Maryland, filed for bankruptcy protection in Maryland in 2009, disclosing $24.7 billion in debts arising from its dealings in bonds backed by pools of residential mortgages.
Baltimore attorney Joel Sher of Shapiro, Sher, Guinot & Sandler was appointed trustee after the Department of Justice said former Thornburg executives continued to collect salaries from Thornburg after the bankruptcy filing — and after they started a new, similar firm.
As trustee, Sher filed suits against multiple companies, alleging that their actions had helped drive Thornburg into bankruptcy. A suit against five of Wall Street's biggest players is still pending.
Barclays Capital Inc. settled claims similar to those brought in the RBC suit for $23 million last year. A suit against Goldman Sachs moved to arbitration and was dismissed.
http://www.baltimoresun.com/business/bs-bz-rbc-settlement-20150828-story.html
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
All fact discovery shall be completed by 5/18/16.
Unless there is a settlement, resolution will be a late-2016 event at the earliest.
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
Order Denying RBCs Motion for Summary Judgment; Granting Trustees Cross Motion for Summary Judgment; Entering Judgement in favor of Joel I. Sher; Denying as moot RBCs Motion to Exclude the Testimony of the Trustees Expert, Gregory W. Minard. Signed by Judge George Levi Russell, III (8/26/2015)
Source: PACER [Docket 153]
Opinion. Signed by Judge George Levi Russell, III (8/26/2015)
Source: PACER [Docket 152]
Monthly Operating Report (7/2015)
http://dm.epiq11.com/TMI/Document/GetDocument/2621108
TMST will reorganize.
How quickly is a function of outcomes to lawsuits seeking in excess of $1.4B against the likes of JPM and others. Noteholders do not need the whole thing. About 20 percent of that amount should cover it.
The Debtor currently has over $40 million in cash and equivalents.
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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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