Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
I wasn't aware of that, had thought they converted the greater part for shares rather than cash.
WMIH's OS was previously only 200M shares and after the merger that figure ballooned up to 1.089B, an increase of ~889M shares.
Series B holders received ~400M shares at conversion leaving say 449M. According to the merger docs NSM holders would own 36% (or 32%?) of the merged company.
That would mean 1.089B X 0.36 = 392M shares are earmarked for former NSM shareholders. Fortress was by far the largest shareholder of NSM with 68% of it's stock.
This means that they were entitled to 68% of the available 392M shares of WMIH which equals 392M X 0.68 = 266.6M shares.
Unless the merger details I cited are incorrect...something changed drastically that i'm unaware of. Only 68M shares being owned by Fortress is too low.
As previously pointed out by JWW which apparently was never read. Made up theories or opinions does not take precedence over stated FDIC guidelines. Are you actually insinuating that the FDIC never placed WMB into Receivership??? If so,...wrong yet again!!!
FACT 1: When acting as receiver of a failed insured depository institution, the FDIC succeeds to the books and records of the institution. 1 Section 11(d)(15)(D) of the Federal Deposit Insurance Act (12 U.S.C. 1821(d)(15)(D), hereafter ‘‘Section 1821(d)(15)(D)’’ and ‘‘FDI Act’’) provides that after the end of the six-year period beginning on the date of its appointment as receiver, the FDIC may destroy any records of a failed insured depository institution that the FDIC in its discretion determines to be unnecessary, unless directed not to do so by a court of competent jurisdiction or governmental agency or prohibited by law. In addition, the FDIC may destroy any records that are at least 10 years old as of the date of appointment.
FACT 2: The FDIC may also destroy any records that are at least 10 years old as of the date of appointment of the receiver.
FACT 3: Notwithstanding paragraph (d)(1) of this section, the FDIC may destroy records of a failed insured depository institution which are at least 10 years old as of the date on which the FDIC is appointed as the receiver of such institution in accordance with paragraph (d)(1) of this section at any time after such appointment is final, without regard to the six-year period of limitation contained in paragraph (d)(1) of this section.
That post should have read "former Series B and NSM holders who were issued 700-800M shares total now owns ~80% of WMIH". I can't see how Fortress would only own 5% seeing that they were the largest holder of NSM shares and post merger received 36% of WMIH. Didn't they exercise their maximum rights for conversion of NSM shares??? This would have left them with 22%-24.5% ownership of WMIH according to my calculations.
Who exactly do you think is advocating this RS!!! KKR and Fortress now owns ~80% of WMIH Corp., it's going to happen whether you like it or not.
RS + DONE DEAL!!! KKR and Fortress alone could approve this. The only issue is whether it remains 1:12 or it's reduced.
This is how I understand the securitization process works.....
1) WMB originates loans and ""sells"" (transfers) those loans to it's SPE (WMAAC, WMMSC etc).
2) The SPE pools and securitizes the loans, creates a Trust and then ""sells"" the MBS's to the Trusts.
3) The Trusts then actually sells Participating Interests in the Trust's mortgage assets to 3rd party investors. The SPE also retains a % of the Participating Interests for improving the Trust assets Credit Rating or for Investment purposes.
4) The cash collected by the Trust from the sale to investors is then transferred back to the Originator, in our case WMB, which then repeats the process.
From this point the process becomes murky in that we don't know how the cash produced from the Participating Interests retained by the SPE's, WMAAC, Long Beach and WMMSC etc, were allocated.
Was the generated cash pledged solely to WMI/WMIIC, shared proportionally between WMB and WMI or possibly another combination???,...all officially guided by inter-company agreements.
IMO there is little doubt that WMI as the parent company was entitled to receive some type of distribution, directly or indirectly, from these SPE interests. The question is, how much???
The LT was willing to settle but the FDIC objected citing that the WMILT was goverened by Golden Parachute Regs.
That means the LT cannot legally pay the Employee Claims and as such the employees court challenge should be dismissed.
The LT should file a motion for summary judgement since the CIC argument is nullified by FDIC regulations.
The ball imo is in the LT's court to end this farce!!! This is all referenced in mordacai's posts on Wednesday.
Thank you for your response. Any thoughts on the last question?
On an unrelated subject,...Why do you believe the FDIC granted DB a $3B unsecured claim when they knew, based on current assets held and existing Note claims, it could not be fully satisfied???
Imagine my absolute surprise when I saw a post from popcorn that our "Note 5" expert from yesterday was a Certified Bank Examiner...LOLOL.
Quote: "WMI was a Holding Corp, not a Bank Holding Corp. Therefore the FDIC had no oversite of WMB. Yes WMI bought FDIC Depositor Insurance and met all FDIC insurance guidelines."
But the OTS did and were instructed by the FDIC to seize WMB, which they did and the bank was placed into FDIC Receivership.
Quote: "WMB was a 5AT, see #5885 Foot note 2 (yes I know you don't read footnotes). Due to the Fact of WMB being an improper seizure, WMB needed to become a true sale. WMI became a willing seller. The Final Price needed to be determined."
Are you serious??? LOLOLOL. WMB is gone and never coming back...the end. Willing seller???LOLOLOL. The bank was seized, WMI didn't have a choice in the matter LOLOL. Good grief.
I won't even bother with the rest of your post, you are literally making cr@p up as you go along. It's hilarious.
This is just MY OPINION based on what info is available. I could be 100% wrong, 100% right or somewhere in between. We will get answers eventually, but until then, stay calm!
I fully agree with your assessment sir but I have two questions that may seem pretty obvious.
With the potent support of the FDIC regulations, why hasn't the LT or the FDIC enter a request for a Summary Judgement on this issue???
Instead we have this "Employee Claims" farce being dragged on for 6+ years now.
Also, do you view this case as being used as a delaying tactic by the FDIC or an excuse by the LT's counsel to continue "milking" the estate's coffers???
On an unrelated subject,...Why do you believe the FDIC granted DB a $3B claim when they knew, based on current assets held and existing Note claims, it could not be fully satisfied???
Thanks.
"So in the CFO quarterly report, the FDIC said for other banks (and it will apply to WAMU since the assets were not sold yet at the time of the report):"
No it won't. The document excludes WAMU assets as stated. In addition an FDIC employee directly involved in the seizure of WMB testified that the yet to be seen 118 pg WMB P&AA contained special provisions that had never been used prior or used since. IMO, the standard Receivership model would not apply at all.
"Since JPM only retained assets from WMB and if we get any small chunk of it, it is a bonus, isn't it? Since our main money will come from WMI and WMB assets that are securitized, or in safe harbor? Is that right?"
We are owed nothing from JPM, only the FDIC for any possible seized WMI assets (unlikely) and WMB/SPE assets held in SH that WMI may hold Beneficial Interests in. I contend again that JPM, as the current parent of WMB could be entitled to a percentage of any SPE SH assets, just as they shared the WAMU tax returns with WMI.
"And is it possible that after the FDIC retained 40B of assets supposedly from WMB, it may find out later that some belong to WMI and some have SPE owned by WMI and so it found out that it didn't retain enough money to pay its claims such as the bondholders and therefore the FDIC dragged its feet until today by not allowing WMILT to pay escrow markers by using the employee claims as dam holder?"
This is imo a huge stretch. If the $40B or even $26B are assets, there would be ample cash to pay Bonds. These valuations were from 2008 during the crisis, in 2018 the economy is strong so this scenario is unlikely. If however we have read this $40B wrongly and it is actually the deficit from JPM writing-down the value of WMB's $299B in assets then yes, Bonds, DB and Equity will receive nothing (Scenario 3). The figures do match up, which is alarming!!!
WMB total assets of $298.8B - Assets acquired by JPM $258.6B = $40.2B write-down by JPM, supporting Scenario 3.
To be fair however those same figures also correspond to the alternative which supports Scenario 2 where Equity receives ~$10B.
To be determined!!!
Repeating the same useless line over and over doesn't make it accurate. The FDIC's case is crystal clear and even though i'm not a judge I don't see much hope that the employees will succeed in this case. The FDIC regulations TRUMPS any contract agreement WAMU offered. Footnote 5 says absolutely nothing to support your assertion whatsoever!!!
What is it called when one is presented with documented and verifiable facts but instead continues to ignore said facts in favor of a meritless or unsupportable theory! That was rhetorical...…
Have a good day gentlemen...i'm out.
Well rooonnnnn, it's evident you never actually READ my post or the link mordacai provided showing what the FDIC's argument is...facts do matter!
I will repeat...the FDIC's argument is not whether the CIC occurred or not, they claim the LT is a "Covered Company" that is subject to Golden Parachute Regulations which prohibits them from making such payments.
Those regulations state that NO PAYMENT can be made to these employee incentive plans after the failure of an institution ie WAMU, especially when some were only valid from August of 2008, one month before the seizure of WMB (convenient wasn't it???).
The Change In Control hearing in Feb. 2019 is to adjudicate whether the FDIC's "Golden Parachute" or Employees "CIC" argument prevails.
The End!!!
If you have some evidence that debunks what I posted, please by all means do share, and if it clearly states what you're inferring I will humbly admit to my error.
What I will not engage in is this vague exchange in speculation or conjecture. When I obtain a desire to play word games, I'll purchase a Scrabble Board off Amazon.
I was alerted that the 12-1 RS could also have implications for the NOLS, so indeed it could be lowered as you said to ensure it is not adversely affected.
My reservations were due to RS's done by POS companies I was vested in that left me with an overall negative view of that action.
WMIH is unlike any of those companies in every facet possible and will imo be an total success.
It will I believe will exceed $2.00 ((the pps at which I will become more engaged in WMIH daily)) before an RS is even voted on based on the next earnings report where the effect of the NOLS would be evident.
I suggest to all, hold onto your shares tightly, there could possibly be some ""false flag"" events along the way.
GLTA
Even though it's no longer my Sig...I still believe as I've done for years that we see a $2B-$10B compensation for our Releases. As for WMIH, I admit is was alarmed at the idea of a 1-12 RS but with some thought, I actually believe this could be extremely positive for WMIH. Wake me up when it hits $2.00, right now I'm bored!!!
There are a few possible scenarios to this issue, all based on the FDIC accounting method used to, IMO, portray the WMB Receivership as being insolvent. I will assume the assets were quoted at market value ie $1 quoted = $1 value. See post# 518718 for reference.
Scenario 1: The Asset-Related Equity Adjustment (A-REA) is comprised of $40.2B in assets ($26.4B + $13.8B). There are $16.2B in total allowed claims which would leave $24B ($40.2B - $16.2B) for equity if the LT is entitled to 100% of those assets...the ideal outcome!
Scenario 2: The FDIC recorded the A-REA as a deficit solely to conceal that $26.4B of the total $40.2B was an actual asset (-$26.4B + -$13.8B = -$40.2B ). Here the $26.4B asset - the total claim of $16.2B = $10.2B for Equity...an acceptable outcome!
Scenario 3: The A-REA is an actual deficit created when JPM wrote down the value of the WMB $299B portfolio by $40.2B, thus WMB assets valued at ~$258.8B were acquired by JPM from the FDIC in 2008. This leaves $0.00 for Noteholders, DB and Equity...we are idiots! :)
"Let say that the FDIC retained 40B of assets in 2008. In principle, the FDIC can only retain assets from WMB and not WMI, right?"
Yes...the FDIC could only legally seize and sell WMB's assets (not Safe Harbor), not WMI's. IMO due to the many instances of co-mingling of WMI and WMB assets, it is possible that some assets in which WMI held interests were seized.
"If the FDIC retains by mistake any WMI assets, will they have to return to the trust?"
Yes they will, but I don't believe the FDIC seized any wholly owned WMI assets but rather WMB and WMB SPE assets in which WMI held a beneficial interest.
"What happens if WMI has interest in some WMB assets that the FDIC retain?"
Once those WMI--SPE agreements were not voided by the Receivership they will I believe have to be returned to the LT, simultaneously or soon after claims higher in priority to Equity are paid in full.
NOTE: The FDIC has approximately $16.2B in claims against the Receivership, $13.8B by Snr and Sub Noteholders and $2.4B owed to WMB. Once those claims are paid and probably some minor administrative expenses, the remains should belong to Equity @ 75%/25%.
(???) As I indicated before, JPM could possibly also be compensated by virtue of being the current owner of WMB, and now successor to any interests they held in those SPE assets (???).
What I find most interesting is how assets are readily quoted while completely ignoring the obvious liabilities.
A basic reading of any comprehensive study about Retained Interests would show that they are reported on the balance sheet under assets.
This was proven in WAMU's last issued Form 10Q when they IMO are reported as Available For Sale Securities.
The idea that there are $100's of Billions in assets owed to WMI is just not supported or credible.
Another issue up for debate is whether WMI receives all or a portion of the cash returns from the Retained Assets that were held by WMB's SPE's.
It very well may be that the WMILT may only be entitled to a percentage of that $40B, only after FDIC claims are paid in full.
JPM could also possibly benefit by virtue of their purchase of WMB, the direct parent of the SPE's that retained and held those Participating Interests.
Retained Interests in Securitizations (1)
Retained Interests in Securitizations (2)
LG, it's been proven that the FDIC HAD in it's possession $299B in WAMU assets, they no longer do.
$258B of those assets were ""acquired"" by JPM in 2008, the document is cited in post# 518718.
IMO the FDIC keeps referencing these assets to conceal the fact that they could be holding ~$40B in WAMU assets ($299B-$258B).
That number may also be speculation but it's actually supported by the available documentation.
We're one month away from the 10yr anniversary of the WMI bankruptcy, isn't it about time we return to reality!!!
I suggest you read the FDIC link in post# 534659 (pgs 1 - 4) by mordacai. The FDIC does not assert that the CIC did not occur. Their claim is that the CIC occurred but as a result of WMB's failure/insolvency. This means the WMILT, a "Covered Company", are subject to Golden Parachute Regulations which strictly prohibit making any such payments. The court will be deciding if the CIC triggered the employee compensation clause or whether the "Golden Parachute Regulations" void those claims. The CIC has already occurred!!!
Quote: "On these facts, the FDIC reiterates its previous administrative findings that WMILT, as successor in interest to WMI, is subject to regulation under Section 1828(k) and Part 359 as a "covered company." In making this finding, the FDIC specifically rejects any contention that WMI's bankruptcy filing, wind-down, abandonment of WMB stock, and the creation of a liquidating trust, served to remove WMILT from the purview of Section 1828(k) and the Golden Parachute Regulations. Section 1828(k)(1) grants authority to the FDIC to "prohibit or limit, by regulation or order, any golden parachute payment." Section 1828(k)(4)(A)(ii) prohibits payments made "on or after the date on which ... [an] insured depository institution or covered company, or any insured depository institution subsidiary of such covered company" is deemed to be in "troubled" condition. Here, any payments the Trust would make to the Settling and Non-Settling Claimants necessarily would be made "after the date on which" the bank or holding company was deemed to be in troubled condition, given that they would be made after WMB failed and was placed into receivership, and after WMI filed for bankruptcy. 12 U.S.C. § 1828(k)"
If you can present the language that contradicts my post then fine, but "Keep Reading"??? Very telling imo.
Thanks
The other option was negotiating with AAOC to only allow Preferred (PQ, KQ and TPS) to receive shares of the Newco and any benefits from the LT. Commons would have received NOTHING and be permanently cancelled!!! This could have possibly happened if both Preferred and Commons were represented by separate counsel. In any event this is now irrelevant since it's a done deal with no do-overs.
Will have to return to the respective filings from each of the parties to determine the facts. I only remember snippets on info regarding the core issues.
The employees are contending that the CIC has occurred and the payment provision has been triggered,...i'm not sure what exactly is the LT/FDIC's rebuttal regarding that assertion.
If there were additional clauses in the employee contracts that would cause the nullification of the "parachute payments" then I suppose the LT/FDIC would submit that defence.
Will need to reread the full filing to understand each sides respective argument(s).
Exactly and this is the reason for my belief that this is purely being used as a delaying tactic,...for exactly what purpose, who knows.
With each passing quarter fees are being expended while there seems to be, at the moment, zero sources of incoming revenue.
There are no tax issues that could provide cash to the LT's coffers since I believe they lost their appeal regarding a large tax return.
There also seems to be no case to be made that a CIC has not occurred since JPM has been in possession of WMB since 2008.
The Employee Claims litigation arose from the contract between WAMU and employees stipulating that they were to be compensated once a CIC of ??WMB?? occurred.
NOTE: I'm not 100% certain of the details of the WAMU-->Employee contract that contains this provision or whether there are any exceptions to the CIC payment clause.
What's your point??? Based on the info the LT has provided in it's own founding documents, there will I repeat, NEVER, be an S4V sale of legacy WMI assets from the LT to any entity. I posted it, hence it is MY OPINION, therefore if one decides to accept it or not is their own personal choice. Absolutely irrelevant to me making my statement. Good grief!
That's usually the point of a question, relying on those who have already located read, possess the answers so that, in this case, I won't have to. It's a very simple concept.
I could be misremembering but wasn't the LT willing to pay the claims but the FDIC intervened and objected, thereby scuttling any resolution?
Also, the insolvency you referred to was back in 2008 which led to the seizure of WMB correct???
What is at issue is whether there was a Change in Control, since that event would have contractually triggered the parachute payments to those employees.
I believe the hearing on the CIC issue is scheduled for February, 2019.
Both PQ's and KQ's were Non-Voting shares but they were higher in priority to Commons and were not paid in full before Commons received a distribution.
The EC, as representative of both Preferred and Common equity, negotiated a compromise with the TPS and AAOC that allowed all Preferred to vote and also receive the lion share of the Newco and LT Assets, ie 75%.
Can anyone remind me as to which party or parties are responsible for delaying a resolution to the Employee Claims litigation?
Is it solely the FDIC that is refusing to settle, or rather a combination of both the FDIC and the LT prolonging the issue?
Thanks.
There are several reasons why payments to WMI for ?ANY? retained interests are possibly not being made or have been suspended since 2008.
These include the interests being held in low priority Equity tranches, the existence of "first-loss agreements or the WMI/WMIIC bankruptcies .
Based on the data from the WAMU June, 2008 Form 10Q we know that their investment in equity tranches were minimal (<5%), thus limiting their exposure.
The first-loss agreements would also be a non issue since most Trusts have a default rate of <2% according to info posted here.
IMO, the bankruptcy is the reason why any payments due to WMI have been suspended and will not resume until this issue has been resolved and closed.
I've read previously that in many, if not most cases, bankruptcies result in Trusts suspending payments to some or all holders of participating interests.
In every case when this occurs, the Debtor's payment is always withheld by the Trust until the bankruptcy case is closed.
There is ample evidence that WAMU held interests based on the 10Q and that it was a common industry practice since retaining these interests enhanced the offering's credit rating.
To date there is actual documentation that WAMU held anywhere from $26B-$30B in these interests,...where they are currently being held is what needs to be determined.
Globic did not suffer any losses....that was the name of the settlement between the FDIC and DB.
I believe you were referring to the Long Beach MBS's which suffered those losses.
To date only DB filed a claim for compensation, no one else, so it's safe to assume there will be no more.
DB claimed because they had a repurchase agreement with WAMU, in that non performing loans would be replaced with performing ones so the investor returns would not be severely affected.
If no one else made any claims then one could correctly assume that either there were no repurchase obligations or their Trust loans continued performing as intended.
Look at it this way...DB, a huge multinational corporation, had to wait 9 years before they received a partial payment on their claim.
The bulk of the claim amount granted, $3B, is still to be paid.
Compare them to us Equity in the grand scheme of this case and you may get your answer.