is making moves.
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I think the FDIC's motion was really a "hail mary" attempt to intercept the deposits as they know the money will be awarded to WMI in summary judgment. I will never forget hearing counsel for the FDIC threaten Judge Walrath and I have no doubt in my mind that the fair judge has been biting her tongue in anticipation for friday's hearing as a result.
This friday, the FDIC will know exactly where it stands as the court will form a presumption that the FDIC "gave away the farm" when it seized everything from WMI. This ruling, in conjunction with the senate committee investigation, should be grounds for the FDIC to throw in the towel.
My guess is that the parties will settle before that money is ever turned over to WMI.
Fish, what are your thoughts on settlement taking place before SJ is awarded to WMI?
Does that seem like an accurate theory in light of JPM's likely reluctance to hand over so much cash?
Any case can fall under U.S. Supreme Court jurisdiction. However, as I said in my post, this will not go past the bankruptcy court and it will certainly not go to trial.
SJ has already been briefed and argued before the court. However, subsequent to the SJ hearing, the FDIC filed a motion to modify the automatic stay - seeking to recover the $4B for itself so that it could distribute the money to WMB creditors. That hearing will take place on Friday and I suspect that will mark the last chapter in this exhausting SJ charade.
Agreed. This will not go past the bankruptcy court. Dimon and the FDIC won't allow this to go to trial - only to lose everything on account of catastrophic valuation of seized assets.
I agree with your thoughts on JPM letting the FDIC take the blame. In fact, I wouldn't be surprised if that was the major hold up keeping this matter from being settled last year.
I agree and that's why the FDIC moved to modify the stay - to avoid the inevitable turnover to WMI.
I don't see how this has anything to do with WMI's net worth. On the contrary, I think the underlying issue behind settling before summary judgment is JPM's reluctance to hand over $4B in cash when it can settle this case, hold onto the $4B and finance the settlement through other means.
Does anyone think JPM/FDIC will allow this to get as far as summary judgment?
I'm wondering whether the court-ordered turnover of the $4B would push the parties over the edge and into settlement. This next week buys the parties some more time to negotiate before Judge Walrath denies the FDIC's Motion to Modify the Stay and possibly grants WMI's Motion for Summary Judgment.
What's the likelihood they will allow it to get that far?
Article I, Section 8 of the U.S. Constitution
"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;"
I have no idea what dannoninvest is talking about. I think he/she might be venting about peoples theories on settlement and/or damages, but I could be wrong.
See the below-referenced post for a quick answer to your question:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46067890
There's always a chance but in the FDIC's case, I think the likelihood of a favorable decision is minimal at best.
Yes and it also indicates that the FDIC had no idea what it was transferring when it handed WMB to JPM - which will subject it to much needed liability.
The FDIC has no right to determine which creditors get priority distribution - that is the function of the bankruptcy court and the reason the automatic stay is in place.
The court is going to deny the FDIC's motion. Judge Walrath has already proven herself to be extremely methodical. I suspect a favorable summary judgment ruling will follow her denial of the FDIC's motion.
Just got in from class and read the great news....congratulations to all of my fellow WAMUQers!!!!
Jest,
Thank you for your insights. This is exactly the direction I'd like to take with this topic - particularly because of the effects on WAMUQ. I guess we'll see what happens and what I can put together but I'll try to keep everyone posted on my progress.
RR
I think this is the topic I'm going to write about - although I may touch on aspects of electronic trading. I'll be sure to keep everyone posted on the outcome either way. Thanks guys!
Writing Topic
I have to present a topic for a 20-page paper in my securities regulation class that I will be working on for the duration of the semester to fulfill the advanced writing requirement for my JD.
I'm thinking about (1.) electronic trading and its effect on the securities marketplace; or (2.) the issues surrounding MM manipulation and its effects on the market - particularly in the context of pink/OTC stock.
I want to write about WMI but the litigation is not over and there is no case law or law review articles available to support any argument I make. Moreover, my professor was an Assistant General Counsel for JPM - so it might not be a wise move for my GPA to discuss how I feel about her company. I might be able to touch on WMI/JPM by getting into the discussion of WAMUQ and NITE, so that's what I'm leaning towards.
Any thoughts?
Many thanks to HFields, John Gyver and Gmenfan for the information. I appreciate your sharing the tip and I'll try to start doing my DD over the weekend.
Interesting find. Do you guys think I should invest some DD time into this?
You're absolutely right, Doc. It was briefly discussed yesterday and I also hope people adhere to the proper decorum - especially if they are associated with the EC and/or WMI.
That's pretty interesting, thanks for sharing. I didn't know that.
Really?
When I think of Denke (or any of his many aliases) I think of riddles, lyrics, random news clips and $24, lol.
It's so true though. I don't know whether this will be covered up but if it is then I really have to question whether this is really a government of the people, for the people - or whether its an oligarchy of some sort.
Tools include the use of lots of paralegals, document binders and bates stamping.
Actually, the parties have no duty to write to the court to clarify what they found. What ends up happening is that they use the discovery evidence to build their case for trial - to craft depositions, prepare for direct/cross examination of witnesses and present to the court and jury why their side should prevail over the other.
Its alot of work and alot of thought must go into it to build a strong case as well as to defend against your adversaries.
Lawyers in these cases usually don't tack on a percentage of settlement (though that tactic is employed by many big M&A law firms, such as Wachtell), they usually charge by the hour - and some of these bankruptcy attorneys have rates approximating $1,000/hour, which is just ridiculous.
Ok, good.
I have to wonder whether we will ever see the true injustice that underlies this travesty. While I will be happy to receive a life-changing return on settlement, I am disappointed in the fact that crooks can actually get away with this virtually unscathed in our own country. If there is one thing history has taught us, it's that he who has the gold makes the rules.
The courts aren't getting the documents, the parties seeking them are and it's their duty to move the court to compel the other parties to produce the requested documents if they refuse or hold out on them.
In the WMI BK, I think the delays are actually hurting JPM/FDIC and helping out WMI. While JPM's share price continues to drop below $40/share and Congress continues to investigate the FDIC, WMI is getting more documents in discovery, gets the added benefit of new law extending the NOLs, gets the $3.5B in caymans, gets the formation of an EC and will likely get $4B in summary judgment. All this while costing the parties more $$ in legal fees.
Absolutely.
I beg you all to stay modest and humble - regardless of your wealth and material possessions - after we are rewarded in settlement. There are lots of good people on this board and I hate to see any of them sell themselves out for greed.
Does anyone know whether he voluntarily agreed to comply with our discovery requests or is he waiting for Judge Walrath to grant the motion and force him?
I have faith in Walrath. She has been a fair judge to date. While some of her critical decisions have taken a long time, there might be a method to her madness. Imagine what would have happened if she granted summary judgment in November without the EC being formed - if a settlement was finalized soon thereafter, we might have been left out in the cold.
That fool. I would like to see him grilled on WaMu.
Looks like the Judge Walrath is planning on tying up all loose strings this week - two days back to back.
Good post, Jest. Thanks!
Thanks Mordicai. Reading Viv's post was the only insight I received on the facts surrounding the $39B claim. Piercing the corporate veil isn't limited to nickel and dime entities - check out Sinclair Oil v. Levien. It's a case I covered last year in my Business Associations class and it clearly articulates the broad scope of the doctrine. I don't think the standard would work here though because of the facts Viv stated and as you mentioned, the bankruptcy avoidance powers. Moreover, the $39B is really FDIC/JPM's problem now.
I just read this on Yahoo! and I thought this was an excellent summation of the $39B claim referenced by WMI-Weil. Great job Viv! My only two issues are, (1.) the remaining $11B; and (2.) under agency law principles, piercing the corporate veil, which might be an avenue under which a parent may be liable for actions of its subsidiaries.
Thoughts?
Thank you for the warm welcome, Joseph.
I plan to get very involved in some of these plays once we see a resolution of the WMI litigation and bankruptcy. Many of the members on this forum - yourself included - have been an invaluable resource for me since I made my first dive into the WAMUQ pool. At the very least, I would just like to return the favor and make a few friends in the process. It will be nice putting faces to the names when all of the complex WMI litigation comes to an end and we all toast to future in Vegas.
-Richie
Thanks John!
I couldn't help it. I'm usually not one to jump on the bandwagon but I think in the spirit of WaMu it's totally justified.
Lots of friendly faces on this forum. Good stuff!
Same here. My mind brings me back to the Bear Stearns case, where shareholders complained about the paltry $2/share and Dimon quickly proceeded to offer them $10/share. I wonder how easy it would be for them to suddenly "include" equity in their settlement numbers given the Bear scenario.
Hey fellas, John Gyver told me about this board and I thought I'd come and check it out.
Got Parlay?
If anyone gets out of line, just say they work for JPM or the FDIC, lol.