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anyway i can find a mor on this?
thanks for the email i picked up 5 at 100 today
One of the first questions asked re: TMA.GB Senior Notes is where they stand in terms of Priority.
The Senior Subordinated Notes and the guarantees are secured on a second-priority basis, equally and ratably with all of our obligations under any future Note Lien Debt (as defined herein), by the Note Lien Collateral (as defined herein), which includes, among other things, the stock of certain of our subsidiaries, the mortgage servicing rights owned by our subsidiary Thornburg Mortgage Home Loans, Inc., and interest payment from the mortgage-backed securities underlying the Override Agreement (as defined herein). The Senior Subordinated Notes and the guarantees are effectively subordinated, to the extent that the value of the Note Lien Collateral, to our obligations under the Senior Notes, which are secured on a first-priority basis by the Note Lien Collateral.
http://edgar.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHtmlSection1?SectionID=6068999-3376-11495&SessionID=OaqjHeDu1WZboP7
Just like anyone else would say now, wish it had been me! Pricing seems to fluctuate widely, which appears common with bonds. Hope there is still a chance to get in?
<from May, 4 2010..to refresh memories in "bad actor" case>
Orrick Fires Back in Thornburg Fraud Suit
Orrick, Herrington & Sutcliffe has fired back against accusations that the firm and a key partner helped orchestrate an alleged fraud at the bankrupt company Thornburg Mortgage, court records show. Orrick and partner Karen Dempsey filed a motion late Monday to dismiss a suit Thornburg's bankruptcy trustee filed accusing Dempsey of helping Thornburg executives siphon millions from their own company. Dempsey is Thornburg's longtime counsel and also served as the company's assistant secretary, according to the trustee's original complaint.
The case is enormously complex and involves allegations of misappropriated money, stolen laptops, missing company information, and a group of law firms that backed out of representing Thornburg because they were uncomfortable with the company's requests. But Orrick, Dempsey and their attorneys at Howard Rice and DLA Piper claim in their motion that Dempsey and the firm did nothing wrong and were not aware of any fraud.
As we reported in March, the trustee's complaint accuses Dempsey, Orrick and four ex-Thornburg officials of using money and personnel from the bankrupt Thornburg estate to help set up a new company called SAF Financial. The suit accuses the executives of awarding themselves bonuses and paying out millions to satisfy contracts with vendors and laid off Thornburg employees, court records show. The trustee, Joel Sher of Shapiro Sher Guinot & Sandler, claims that much of that money should have stayed with the bankrupt estate for distribution to creditors. The executives--with Dempsey's help--allegedly re-structured the Thornburg management agreement in a way that allowed them to fast-track some of these payments, including expense reimbursements. Some of those payments took place without the bankruptcy court's permission, with the goal of clearing up obligations to ex-employees, vendors and other parties so that the new company, SAF, could start on solid ground, the complaint asserts.
Amending the management agreement in this way was apparently a step that other lawyers were not willing to take, court records show. As we reported in March, the Delaware firm Pachulski Stang Ziehl & Jones recommended against altering the agreement to speed up the payment schedule, suggesting instead that Thornburg file for bankruptcy and get the court's permission to make those payments. In an email sent last April, a month before the Chapter 11 filing, Dempsey told Thornburg's chief operating officer, Larry Goldstone, about "a really ugly call" she had with Pachulski attorneys about the management agreement and other issues, according to Sher's complaint. Goldstone asked in a later email about "dumping Pachulski," and Thornburg soon jettisoned the firm. Kirkland & Ellis also backed way from doing the work. Court records attest that Thornburg executives turned to Venable only to have a falling out with that firm over disagreements about its legal advice in matters separate from the management agreement. Lawyers from Kirkland, Venable and Pachulski declined comment, as did Sher.
Sher's suit also says the named executives had employees working for the debtor devote time on the clock to SAF matters. One such employee outlined many of these allegations in an anonymous letter sent over the summer to lawyers at Quinn Emanuel Urquhart & Sullivan representing the creditors committee in the Thornburg case, court records show.
Sher's complaint does not claim that Dempsey or Orrick received any of the money that rightfully belonged to the estate; rather, the suit claims they should be held liable for defrauding the estate. In their defense, Orrick and Dempsey say Sher's reasoning is flawed. They argue he is allowed to pursue money for the estate, but that he can only take that money back from people who actually received it--in this case, the executives who received the bonuses and the vendors and ex-employees who received other payments in question.
Dempsey's broader defense is that she knew nothing about any alleged fraud and thus could not have aided the Thornburg higher-ups in committing it. Her lead attorney, Pamela Phillips at Howard Rice, declined comment.
http://www.law.com/jsp/tal/PubArticleFriendlyTAL.jsp?id=1202457661513
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Law firm partners can ill afford losing a case like this...is this why you see a settlement with no admission or denial of guilt?
LouMannheim asked:
Portions were dismissed.
I call this the "Bad Actors" case.
There were 20 counts in the complaint. The defendants were Larry A. Goldstone, Clarence G. Simmons III, Deborah J. Burns, Amy Pell, SAF Financial, Inc. (“SAF”), Karen A. Dempsey, a partner attorney at the firm of Orrick, Herrington & Sutcliffe, LLP and Orrick.
Count V seeks the removal and return of property or value of property from Goldstone (former CEO, President and Director of TMST) and Simmons (former CFO of TMST) and SAF (the business started up while still employed by TMST).
Count X seeks damages arising from his breach of the standard of care and duties he owed to TMST pursuant in an amount not less than $12,000,000.
It appears the counts related to Dempsey and Orrick remain.
Mediation was held on 11/14-11/15.
Magistrate Judge Susan K. Gauvey presided.
Source: PACER [Docket 219]
Joel Sher v. SAF Financial, Inc.,et al (10/11/11)
A Motion to Dismiss was granted by Judge Richard D. Bennett on Counts I through VI (Avoidance of Fraudulent Transfers) and Count VII (Avoidance of Preferential Transfers) as they pertain to Thornburg. Judge Bennett denied the Motion to Dismiss as to Count V (Avoidance of Fraudulent Transfers) and Count X (Breach of Good Faith and Fair Dealings ) as they pertain to TMAC.
1:10-cv-01895-RDB
U.S. credit raters set back on First Amendment: judge
Reuters – Fri, Nov 25, 2011 3:13 PM EST
By Jonathan Stempel
(Reuters) - A federal judge has said credit ratings are not always protected opinion under the First Amendment, a defeat for credit rating agencies in a lawsuit brought by investors who lost money on mortgage-backed securities.
The November 12 decision was a little-noticed setback for McGraw-Hill Cos' (NYSE:MHP) Standard & Poor's, Moody's Corp's (NYSE:MCO) Moody's Investors Service and Fimalac SA's (LBCP.PA) Fitch Ratings, which have long invoked First Amendment free speech protection to defend against lawsuits over their ratings.
These agencies had argued that the Constitution protected them from claims they issued inflated ratings on more than $5 billion of securities issued in 2006 and 2007, and backed by loans from former Thornburg Mortgage Inc and other lenders.
<To read more>
http://finance.yahoo.com/news/U-S-credit-raters-set-back-rb-4270951352.html?x=0
Former Countrywide Whistleblower: Mortgage Fraud 'Systemic'
With mortgage lenders now facing allegations of misconduct on several fronts, a former top ranking employee at a major home lender has come forward saying fraud at her firm wasn't the exception, but the norm.
http://www.huffingtonpost.com/2011/12/05/countrywide-whistleblower-mortgage-fraud-systemic_n_1129637.html
Not exactly a new revelation but it's thing like this that put more heat on BoA et al settling with Thornburg imo.
wow...someone picked up a nice buy @ $60 last week...and they've allready doubled.
Hey LM good to see you. You're far from a novice bud.
EI's main body of work RE: anything Thornburg started on the THMRQ board a couple years ago and he'll more than likely continue that with an occasional post here. I opened this board so we could keep the peace with common shareholders. Our strategies, goals and discussions are as different as the securities themselves so it made sense to open this for Senior Note holders. For a long time Ihub wouldn't allow it but they finally realized just like the other large BK cases involving different classes it makes sense to give them each a board.
Yes -lots of litigation to plow thru here too. The fulcrum security in this BK is the Senior Notes. Period. Not sure you can buy Senior subordinated...they were all held by Matlin-Patterson and he needs $1.3 Billion. Highly doubtfull any water falls to classes below Senior when this is done.
Funny you mention how quiet he's been on all of his boards...we talked about that just last night on the phone. There's a couple of reasons really...he wasn't feeling well off and on over the last couple weeks. His day job hours have been increased significantly and even include some weekends...and he's having to study for a course he's taking...so when you add it up he's just had other things take priority. I think between all of that and everyone seems to be experiencing the "my investments are parked waiting for something to happen" mode there isn't much to say. I know i'm in that boat as well. I hate it but such is life for Distressed & BK plodders.
How about you LM? anything new?
I may be a novice at what you guys do, but the case looks like early WaMu - filled with lawsuits. What is EI working on? He has been too quiet here!
excellent analysis. Thanks again, it really give me a lot of inside info.
Your welcome.
There could be duplicate claims in that $3.430 Billion in liabilities...but at the end of the day the A & L spread will still be overwhelming. Add that to the most likey outcome for the $2.2 Billion dollar lawsuit(s) will end as settlement(s). With that in mind it's a bit of a stretch to see a full recovery for the Senior Subordinated Note holders who are owed $1.3 Billion.
With the odds being that the lawsuit(s) end in settlement(s) the odds remain very high that the SN will still be made whole. To do that they only need a little less than $160 Million (or just 7+% of the total amount sought).
EI pointed out something back on June 1st that was very significant and very telling about that first residential loan judgment involving Countrywide Home Loan. He saw that as a "trial balloon" case that the Trustee (Joel Sher) sent up to see what kind of recovery rate he might expect on a much bigger lawsuit.
Here is that post:
Countrywide Home Loans/BofA suit recovery rate: 68 percent.
Original relief sought was $1,392,377.11, plus attorney fees and the cost of this action.
Source: PACER [Docket 1]
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=63763290
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Strickly hypothetically speaking, but not unreasonable to do, if we use that trial balloon recovery number (68%) as some kind of "guage" as to what we might expect out of a total settlement amount then that puts it in the neighborhood of $1.496 Billion. If we divide that by 2 to be conservative it still comes to $770 Million which is still a half billion dollars more than we need to make SN's whole.
Should this [$770MM] be the case then SN's are whole @ $878.12.
Senior Subordinated Notes recover somewhere in the neighborhood of .47 cents on the dollar.
Junior Notes would be out of the money.
All 4 issues of Preferred would be out of the money.
And Commons would be toast with no jam.
Thank very much. Actually, I did not see it until you showed to me.
Looks like the assets are so much apart from liabilities. It seems that SNH could not recoup at FV provided Susman wins 2.1B in court. Of course, commons are zero.
Originally, I thought the difference is around 3-400 milliion dollars between A and L. Looks like I am pretty naive. Any thoughts? TIA
Ouch..that even hurts just hearing about the hit!
EI has been under the weather this week. I'm sure he'll respond when he's up and well. He did post the MOR financials for August on the THMRQ board ..perhaps you saw it allready but if not :
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=67348726
I am a common holder. I got at the highest price in 2007 approximately $30.00/share before the reverse split 10:1. Such a bad luck.
You're a pre-filing holder of Senior Notes or Commons?
I'm a pre-BK holders. Do you know what is the current A & L? have you hear any news regarding litigation from Susman? TIA
You're absolutely right! Thank you for the correction.
Revised Class 6 (Senior Notes) claim: $266.1 million
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45205352
How to buy Thornburg Senior Notes
Senior Secured Notes the ticker is TMA.GB. cusip # is 885218AB3.
You won't find these quoted on the OTC markets nor by most brokerage firms. You have to go to a broker who quotes Bond prices. I use Zions Direct but there are others (opening an account on Zion's direct is free btw and they only charge $10 no matter how many bonds you buy).
Adfitech was a Non-Debtor subsidiary. Senior Note Holders, who had a claim of $304.7 million, received a package of Adfitech securities and cash valued at $38.6 million. For each $1000 in principal amount of TMA.GB, holders received $121.88 in value comprised of $78.26 in Adfitech Inc 8% Sr Secured Notes due 3/05/20 (ADFT.AA), $37.60 (20 shares) in Adfitech common stock (ADFT) and $6.02 in cash. This lowered the remaining claim to $878.12 per $1000 principal amount. The remaining claim is $266.1 million.
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.
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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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