I last posted here NINE years ago. Checked in for a laugh to see if the soldiers abandoned on a lonely Pacific island were still fighting to win World War II for the Japanese emperor.

I was not disappointed!

It's no different than selling an option on a piece of land or something. It's done all the time:

"I, Kirby96, as holder of x,xxx escrow shares in the Washington Mutual bankruptcy shall transfer all rights to any distribution made to John Doe in exchange for the sum of $xx,xxx.

When any such distribution is made, Kirby 96 will transfer the proceeds according to the terms of this document to the account designated by John Doe."

Obviously you want an attorney to draft that doc to protect both parties from any unforeseen events and to cover all the bases/contigencies, and it'll probably be a 20 page doc when it's done but that is basically the gist of it.

If anyone is up for it, make me an offer. I'll pay the legal fees to the attorney of your choice.

Yup. Given the series of sales on the decline, and the large buy right at the close, I'm guessing leak of a deal that pretty clearly values WMIH at about $2.50 a share.

...because the administrator made a decent estimation of the proceeds available to distribute.

"Hmm. Looks like there will be slightly more than enough assets to pay off the PIERS, so everyone below them gets an escrow marker."

...never mind the fact that all these ideas for lawsuits, etc. always start with, "someone should"...

..as in "someone that isn't ME should...". Probably because they realize on some level how absurd it is. Can you imagine the reaction you'd get cold-calling a lawyer with this so-called 'case'? You'd be lucky to even get an initial meeting.

There are reams of blood-thirsty lawyers that sniff this stuff out and find clients, not vice-versa for the scale the unicorns believe. And as you have pointed out, the fact there are NO lawyers sniffing around this is just more evidence that there is no case, and nothing for escrows.

...boy, that last clause is typical of the faulty logic displayed so often here. It's kind of like saying, "since no one has told me that there is NOT pirate treasure buried in my back yard, I'm going to believe that there almost certainly IS pirate treasure in my back yard. And I'm going to tell my neighbors about it for months and years. And every time I dig a dry hole I'm going to tell them that it actually makes me more convinced that the treasure is there somewhere and I just need to dig one more hole. ...dig one more hole. ...dig one more hole."

...in other words, basically the scenario TheNurse has been suggesting since the predictions made by 'the experts' started to crumble after the annual meeting. But, but, but... How can that possibly be?!? From the responses to TheNurse I thought those were just wild rants?

I'm absolutely shocked that TheNurse's predictions of nothing soon for Escrows are not only coming true, but now being endorsed by others! Shocked I tell you!

Make it $500 per P, and I'll take that deal right now. In fact, I'll even pay the legal fees.

Completely false. Bankruptcy/Liquidation claims are traded all the time at very steep discounts. Trading your escrows markers would be no different. There are people (many lawyers for example) who make their careers doing just this. Bond claims, unsecured bi-lateral contract claims, derivative contract claims, equity claims, etc., etc., etc.. They can all be traded. Many hedge funds are still trading Lehman claims to this very day.

Until recently I worked for a firm that made a lot of money trading Lehman and Madoff claims. Claims purchased from banks, business partners, and even widows and orphans who had the misfortune to invest with Bernie. There is no impediment to writing a binding contract transferring one's rights in a bankruptcy. Believe it or not.

I'd definitely sell my Escrows. Given the value that some presume here, something in the high 5 figures should be an absolute steal for my position (smirk). I'll even pay the bills of the attorney of your choice to draw up the binding contract. Absolutely 100% serious.

Believers, here's your chance! Put your money where your mouth is! Pick up some more of these golden tickets!

It is interesting. Makes it fun to check in on this board from time-to-time. In 10 years I have no doubt people will check in on this board and find the same conversations going on. It's sort of like those Japanese soldiers they found on Pacific Islands in the 60's who still thought World War II was going on.

Those of us with escrows who do not believe in the unicorn theories of billions wonder why the folks here spend so much time doing so-called 'diligence' and 'analysis' when it makes no difference, and distracts from WMIH.

Investment analysis and diligence is generally done in order to facilitate a buy, sell, or hold decision. Decisions that can't be made with escrows regardless of how much time you spend on it. Regardless of the time you spend, regardless of the conclusion you reach, you will hold. Thus that time is wasted. I spend no time analyzing escrows, and I will participate or fail to participate in equal proportion to those who spend hours on silly analysis.

So why do they do it? I think they do it because deep down they realize they will likely get nothing for escrow and it's a desperate attempt to convince themselves.

That's true, but let me put it to you this way. If, miracle of miracles, the lottery ticket escrows pay out, I will participate equally with the folks that have spent countless hours here, and I have spent nothing more than 10-15 minutes making about 5 posts since 2010, and another 10 minutes here and there trying to find out if there's actual WMIH news on here (which actually MIGHT pay off).

If, on the other hand, the overwhelming odds hit and escrows are worthless, I'll have invested almost no time here, and the other items I've focused on in the mean time will continue paying just fine thank you very much. Just some food for thought.

I would humbly suggest that since the 'Escrows are worth BILLIONS' crowd are the ones actually suggesting that something will happen, the burden of proof falls on them, NOT on the folks who think nothing will happen. Thus far the nonsense spouted on this board falls woefully short of proof.

Escrows are a lottery ticket. You could win a little, you could win a lot, but the overwhelming odds are you will win nothing.

The folks that have spent so much time analyzing lottery tickets the past few years would be much wealthier if they had devoted that time to analyzing other investment opportunities and just left the lottery tickets in the drawer to pull out when the numbers are drawn. That's the crime in all these empty promises and wasted hours spent on dubious so-called 'analysis and diligence': it has stolen people's attention away from time to spend on other far better risk/reward propositions.

...and this is why I stopped checking this board years ago.

The 100 billion in deposits has nothing to do with anything related to WMIH. Nada. Zip. Zilch.

All that is happening is that JPM is going to start charging institutional depositors to hold their cash because under BASEL III, they get penalized to a certain extent and it lowers the capital ratio they report. So they figure $100B of depositors will say to heck with that and put their money somewhere else. That's it.

Buy the rumor, sell the news.

This mornings trading makes perfect sense.

The KKR deal was 'very likely' before today, so was basically priced in but slightly discounted to account for the small risk it would fall apart.

Jump at the open as some folks think this is a game change when in reality it is simply same story as yesterday with a small amount of uncertainty cleared up. Now back to the level that represents how the market priced the risk of the deal falling apart. Basically we got paid about 15 cents for absorbing that risk the past few weeks.

Me neither. IMHO, they are walking it down slowly so they can get OUT. Not IN. Leak shares slow so you don't tank it. That's how you EXIT large positions, not ENTER them.

Warren Buffet has many times more debt than I do. You'd better tell how horribly he has mis-managed his finances.

Can't help but think the Galleon verdict may have made a few folks nervous and helped push this in a new direction...

It's over.

You're not missing anything.

That's a good point, but the holding company would be expected to try and keep the bank capitalized as a regular part of doing business. That is, there's a compelling argument that this was simply a bad business decsion (given the benefit of hindsight knowing the FDIC was about to swoop in and take over).

I suppose you are right that this could be a voidable preference simply because of the timing, but who benefitted? No WMI stakeholder, and given the Bank is the primary asset of WMI, they would be expected to protect it. In order for this to rise to the level of fraudulent conveyence (or transfer, which I guess is a better term in this instance), I think you would have to show that WMI knew the bank was insolvent (which obviously hurts other arguments), and committed resources they knew would end up in the hand of another party of their choosing.

Steved, you are of course correct, despite the protestations of many here. For a fraudulent conveyence to exist a transaction would have to occur that would result in one WMI stakeholder ending up with more than they 'deserve'. For example, if WMI knew they were going BK, and they sold a bunch of buildings and used the proceeds to issue a dividend to common rather than pay off debt holders, fraudent conveyence would occur. The proceeds of the asset sale would have been fraudulently conveyed from the rightful owners (sr. in the capital structure) to more junior holders. If WMI simply sells these same buildings for a crappy price and uses the proceeds to pay off the debt holders and doesn't have enough left over to pay common (which is analagous to what is happening in the BK), they haven't fraudulently conveyed anything, they've just made a really crappy business decision.

The FDIC could be blamed for not getting enough compensation for the assets, but probably not for fraudulently conveyence. JPM would be EXPECTED to try and get the assets for the best price possible. In theory, it's not their fault if the FDIC are idiots (ignoring the possibility of collusion for a moment). Assets are sold for far below their fair value in BK all the time, and FDIC receivership is really nothing more than a quickie out of court BK.

Yup. And rightly so. The value to pay pref's has to come from SOMEWHERE. A piece of paper that says they'll get something but says nothing about where it will come from is meaningless.

I completely agree with you. However, if today's closed door proceedings mean what we have been speculating they mean, it seems it would directly relate to the size of a potential recovery (i.e. any settlement MUST include higher recovery for pref than current MOR/Assets reflect). I'm concerned there is a much more mundane explanation for today's court activities.

That's my interpretation as well, and now that we've had a couple hours to digest, is probably the conclusion of all the bright people out there. So that said, why no movement in share price? I've always believed this will only move on prospects for actual recovery (and as such doesn't generally 'move on news'), but the notion of serious talks in lieu of examiner seems like a slam dunk that recovery prospects have improved dramtically.

Something doesn't seem right.

Good point. Helps keep us from reading too much into anything at this point.

Last ditch settlement talks?

Again, this is factually incorrect. CLASSES vote, not COMMITTEES. Common and Preferred equity are in different classes. The reasons for this are obvious. Consider a bankruptcy (not WMI) where there is $50 of debt, $50 of preferreds, and then equity. Let's say this estate has $75 of cash and no other assets. The court would not allow the common equity holders to supercede the best interests of a class senior to them and vote against distributing $50 to the debt holders and $25 to the preferred holders. This is why a plan needs the consent of one impaired CLASS. A committee has nothing to do with it.

That is factually incorrect. The plan of record that is ultimately accepted by the court needs only the acceptance of one impaired class.

What's going to happen here is after eons of negotiation, we will see a POR that gives preferreds 'something' (call it 20%). Preferreds will be happy, and the plan will receive the support that it requires: majority in number + support of one impaired class.

This is right on. At the end of the day, the hope for preferreds is that more of the tax refund ends up in the WMI estate. If that happens, and it looks like Preferreds will see, say, a 20 cent or greater recovery, they will vote to accept so fast it will make your head spin. I count myself amongst those who would do exactly that.

As a 'P' holder, I would take that deal in one second flat. Make that a half a second. Forget all the kumbayah crap. this is finance. In BK, it IS everyman for himself. Including common vs. preferred. Get over it folks.

Perhaps, but the FDIC's own lawyer said yesterday they were close to signing after negotiations this week...

Well you're obviously getting a few steps ahead, but that is a very interesting theory. Gives one a lot to think about...

They can put me down as a yes vote for the 20% payout to P's right now.

Exactly. You can read absolutely nothing into the use of the word 'negligible' (either high or low). The important thing is that there is now essentially open acknowledgement that P's are in the money. While a donut is still possible, the worst case downside is looking increasingly unlikely. I'm usually a pessimist, but in the past few days feel much better. We are finally to the point where true negotiation must happen. At this price, we look pretty good. While I still think a mid-single digits is my base case, a triple or quadruple from here would not be out of question. That's a pretty decent upside/downside profile.

Got it. So it's the FDIC's portion. I see your point. JPM's 'offer' is likely why the FDIC was willing to reduce their split of the tax asset with WMI. So in that respect it is already accounted for in the revised DS.

Could be. I can't reconcile the $1.4B that the story refers to with any split or total of the tax refunds as I understand them, so it could mean anything I suppose...

That would be huge, and is basically the catalyst that some of us have been expecting for some time to put P's squarely in the money. Let's hope it's true.