Linda is biotch...! LOLz JayKay
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Right, lets talk about WAMUQ $24, 2x times value plus. j.k. eom
What I have learned is that no matter what someone says, they will do their own thing regardless. Some are too emotionally tied to their investment to do anything or listen to reason even if someone spells everything out for them.
There are a few people who are open minded and will listen.
Everyone here wants to make money. Some will make more than others.
imo
I am confident that end of Feb. WMI2 will emerge. Any objections will be dealt with during confirmation hearings with whatever concessions the judge bestows though her official Opinion. It is up to us to choose which tickets we want and make the best of it by riding whomever coattails. There is no wrong way of choosing your tickets, just maximizing the best your return on your investment.
Walrath, as well as eery other party, wants this case settled and out of her court.
imo
Got it, thanks. Unfamiliar territory for him and understandable.
imo
My questions stem my talk with my attorney friend. As I have mentioned previously, he is not a bankruptcy attorney. However, he has not seen a judge insert himself/herself into a settlement between parites.
Not only does he currently think that U's will not be cancelled out, he thinks there's little chance that JMW will change the 70/30 split.
But, to your point, this case is unusual and leaves the door open for JMW to do that. Whether she will or not remains to be seen.
Thanks for sharing your thoughts on the matter.
Jack
I am unaware of other cases because I have not followed them until the end since it resulted in a waterfall that NEVER reached lower tiered securities, however, the 70/30 split was a "proposal" as indicated by the EC Q&A. Keyword being "proposal".
The settlement resulted in a resolution of SNH disallowance claims, however, the "proposed" 70/30 split was not settled, otherwise it would have fixed and the word "proposed" would not have used, nor would have the EC or the Debtor include verbiage of the possible change in the "proposed 70/30 split.
So, settlement is concrete, however, 70/30 is still up in the air. So, since the 70/30 is "proposed", then APR is still up in the air. This infers that not everything has been settled and agreed to. Yes, APR is used as a template and is flexible in a settlement, however, there is still a priority.
As for the GSA not being changed by Walrath, all parties were in agreement and all distributions were "fixed" and accounted for. Not so with our settlement.
So you know, I do not believe commons will be zero'ed out, their releases are needed.
You should ask you attorney friend since he is in the legal field and has a stake in WMI securities. Tell us what his response is.
imo
Fasshon, i like you.
That said, it is called "disallowance of claims". HF's "claim" is approx. $2.5 billion. HF only really used approx. a couple hundred million to purchase that $2.5 billion claim.
The real actual loss is a couple hundred million by HF, but the value is $2.5 billion.
Let's say EC prevailed in the IT allegations and got $2.5 billion.
Now let's use your pension fund analogy:
HF used pension money to buy WMI securities. HF lost the money either by the PPS crashing or IT. The HF lost the money.
Now, if HF lost it because the PPS fell, then to bad for pension fund.
If HF lost it because of disallowance of claim, then it is up to the HF to use the pension fund money because that is what was used to purchase the WMI securities. Now that puts the HF up for liability because it was the HF's RESPONSIBILITY for their illegal act. What the HF will do is front up the money, that is why I say that a judgment is executable and HF have their own assets. The judgment is collectable in full because it was an illegal act performed by the INDIVIDUAL, i.e. HF.
You can ask anyone in the legal field if I am correct.
IMO
ARTICLE XXIII
PROVISION FOR TREATMENT OF PREFERRED EQUITY INTEREST (CLASS 19)
23.1 Treatment of Preferred Equity Interests: Commencing on the
Effective Date, and subject to the execution and delivery of a release in accordance with the
provisions of Section 41.6 of the Plan, each holder of a Preferred Equity Interest, including,
without limitation, each holder of a REIT Series, shall be entitled to receive such holder’s Pro
Rata Share of seventy percent (70%) of (a) subject to the right of election provided in Sections
6.2(b), 7.2(b), 16.1(b)(ii), 18.2(b), 19.2(b) and 20.2(b) of the Plan, the Reorganized Common
Stock, and (b) in the event that all Allowed Claims and Postpetition Interest Claims in respect of
Allowed Claims are paid in full (including with respect to Allowed Subordinated Claims), any
Liquidating Trust Interests to be redistributed; provided, however, that, in the event that, at the
Confirmation Hearing and in the Confirmation Order, the Bankruptcy Court determines that a
different percentage should apply, the foregoing percentage shall be adjusted in accordance with
the determination of the Bankruptcy Court and be binding upon each holder of a Preferred
Equity Interest. In addition, and separate and distinct from the distribution to be provided to
holders of the Preferred Equity Interests from the Debtors, pursuant to the Global Settlement
Agreement, and in exchange for the releases set forth in the Global Settlement Agreement and in
Article XLI herein, on the Effective Date, JPMC shall pay, or transfer to the Disbursing Agent,
for payment to each Releasing REIT Trust Holder its pro rata share of Fifty Million Dollars
($50,000,000.00), determined by multiplying (a) Fifty Million Dollars ($50,000,000.00) times
(b) an amount equal to (i) the principal amount of REIT Series held by such Releasing REIT
Trust Holder on the voting record date with respect to the Sixth Amended Plan divided by (ii) the outstanding principal amount of all REIT Series (which is Four Billion Dollars
($4,000,000,000.00)); provided, however, that the release of claims against the “Releasees”
delivered in connection with the solicitation of acceptances and rejections to the Sixth Amended
Plan shall be deemed binding and effective for each Releasing REIT Trust Holder; and,
provided, further, that, at the election of JPMC, the amount payable to Releasing REIT Trust
Holders pursuant to this Section 23.1 and Section 2.24 of the Global Settlement Agreement may
be paid in shares of common stock of JPMC, having an aggregate value equal to the amount of
cash to be paid pursuant to this Section 23.1 and Section 2.24 of the Global Settlement
Agreement, valued at the average trading price during the thirty (30) day period immediately
preceding the Effective Date. While JPMC’s maximum liability pursuant to this Section 23.1
and Section 2.24 of the Global Settlement Agreement is Fifty Million Dollars ($50,000,000.00),
JPMC’s liability shall be reduced to the extent the Releasing REIT Trust Holders comprise less
than all of the outstanding REIT Series holders.
23.2 Cancellation of REIT Series: Notwithstanding the provisions of Section
23.1 hereof, on the Effective Date, all REIT Series shall be deemed extinguished and the
certificates and all other documents representing such Equity Interests shall be deemed cancelled
and of no force and effect. For the avoidance of doubt, this Section 23.2 shall have no effect on,
and shall not result in the extinguishment or cancellation of, the Trust Preferred Securities and, in
accordance with the Global Settlement Agreement, JPMC or its designee is the sole legal,
equitable and beneficial owner of the Trust Preferred Securities for all purposes.
23.3 Cancellation of Preferred Equity Interests: Notwithstanding the
provisions of Section 23.1 hereof, on the Effective Date, all non-REIT Series Preferred Equity
Interests shall be deemed extinguished and the certificates and all other documents representing
such Equity Interests shall be deemed cancelled and of no force and effect.
No, the point was what the fuss was about regarding the 70/30 split and that the judge was NOT going to zero out commons because a release is needed and as consideration for releases, commons gets distribution.
Now, if you are asking me, and if you were going to buy already, I suggest buying P, instead of K. Better deal.
Have a nice day.
imo
I am not following you. You trying to assert that the HF is the Debtor. That is not true. WMI is the debtor. HF is the "individual" who used non public info to trade.
Like I said, it does not matter were the money came from. It is the INDIVIDUAL that is responsible if they lose.
Example: EC is the plaintiff. HF is the defendant. EC wins $3 billion and obtains judgment. It does NOT matter where the money comes from, the HF will come up with $3 billion. If the plaintiffs execute their judgment, they take the corp bank account, assets, whatever, it does not matter. It is the INDIVIDUAL that is responsible and yes, there will be $3 billion available for the taking.
What you are talking about is if someone files for BK, their IRA, 401K pension, etc. is exempt from creditors in an bankruptcy estate. HF is not the Debtor here. They are the defendants. All their assets are up for grabs.
"are ya feelin' me?"
... and I WAS actually a heavy heavy common holder... until the landscaped changed... I adjusted my positions long ago.
imo
Opps correction: "That is about 1/5th of the claim amount." it is actually about 1/30th of the claim amount.
Also, I signed no petition for the removal of Willingham. Let get that straight.
imo/eom
I am going to assume this response is not directed at me.
First of all, I DO NOT BELIEVE THE EC WILL WIN THE F&R APPEAL. Never have and never will. GSA was a settlement and Walrath did not adjudicate it. That is the hint.
Second, the burn rate is $10 to $13 million, not $30 million per month. Hint: FJR
Third, I won't comment on Willingham. Everyone has their opinions.
Fourth, if you think $75 million and 95% of WMI2 out of $3 billion cause of action is a great deal, good for you. That is about 1/5th of the claim amount. You would accept "go away money". It does not take a genius to know after the Confirmation Opinion by Walrath that "colorable" claims are there. Where there is smoke, there is fire. Walrath saw the smoke, it was up to the EC/S&G to find the fire.
S&G = GM mechanics working on my BMW. They were out flanked by Weil, who are bankruptcy attorneys. S&G are not in their home field. If it was not for the shareholders, there would be no EC, no IT, Claims, no distribution to equity, etc.
Fifth, any appeal would be equitably moot and the POR would just steam roll it in to confirmation.
Sixth, pension funds, money from 401K, I skipped it because I have no idea how you are relating this to WMI. It is irrelevant to the bankruptcy proceeding.
Seventh, the litigation path would have resulted in the waterfall flowing down to prefferds BUT commons would have been zero'ed out. So your claim that equity would have been out of the money is false, only commons would have been out of the money. Hint: APR
Eighth, it does not matter where the money came from (ie pension money, your mom's money, 401k, etc.), it was what the "individual" did with NON PUBLIC information and traded on it. Hint: IT
Lastly, if you are a common holder, I suggest does not matter what you vote on the plan, all that matters is the release to get distribution. If you do not give the release, you will not get distribution.
imo
Upon information and belief, the quote below extracted from TPS's pleadings which basically states that EC had $3 billion possible to extract from SNH, however, EC decided to abandon a potential $3 billion in favor of $75 million and 95% of WMI2.
If we do the math, this does not make sense and it will not make sense to Judge Walrath either.
Now that being said, you have Willingham, I mean the EC come with a "proposal" of 70/30 split, but the EC abandoned their claims for $75 million and 95% of WMI2 out of $3 billion cause of action.
This looks really really bad on the EC's part and it was to the detriment of TPS because the settlement was not even close to a quarter or even a 1/5th of the amount of claim EC had on SNH.
EC obtained sooooooooooooooo little and yet wants to "propose" a 70/30 for do nothing but a piss poor job.
I don't even think the Judge needs to see the vote to even change the split. It is all there in the math.
It does not take a math genius to see that "something" caused a settlement of $75 million and 95% WMI2, from a $3 billion cause of action.
Analogy, but this is actually what happened:
The same thing happened when Weil Gotchal filed their adversary proceeding against JPM with all those causes of action ie trademark infringement, conversion of assets, unjust enrichment, fraud, fraudulent conveyance, etc. etc. and then all of the sudden, Weil gives the the majority of WMI's tax refunds and assets to JPM with a smile.
Like I said, something happened that the EC decided to throw away the case for peanuts.
IMO of course.
Abandonment of Potentially-Valuable Estate Claims
During the July 2011 confirmation proceedings in connection with the last version of
the Plan, the Equity Committee, with the support of the TPS Consortium, achieved a
significant victory in obtaining permission to proceed with litigation against certain hedge
funds accused of engaging in illegal insider trading in securities of the Debtors (the
“Settlement Noteholders”). In the September opinion denying confirmation of the Plan, the
Court provided a lengthy discussion and analysis of potential claims against the Settlement
Noteholders, finding such claims to be “colorable” even on the limited evidence adduced
through the minimal discovery conducted by the Equity Committee to that point. Recovery
on such claims could result in significant additional value being made available to members
of Class 19 (either through affirmative recoveries from the Settlement Noteholders or through
disallowance of their claims against the Debtors (resulting in more value flowing down to
Class 19 through the recovery “water fall”)).
But, rather than pursuing that litigation (or even conducting additional discovery), the
Equity Committee appears to have acquiesced to the revised Plan’s: (a) full release of all
claims against the Settlement Noteholders (including claims you might have in your
individual capacities); and (b) a demand that the Court’s September opinion (as it applies to
potential claims against the Settlement Noteholders) be withdrawn and vacated as if the
Court had never found such claims to be colorable. In the view of the TPS Consortium, this
extraordinary abandonment of potentially-significant value for Class 19 is not justified by the
Settlement Noteholders’ potential provision of a secured loan, post-bankruptcy, to the
“reorganized” Debtors3 or other minimal consideration supposedly to be provided by the
Settlement Noteholders in connection with the Plan.
The TPS Consortium does not believe the Debtors’ estates are receiving sufficient value in
exchange for the release of significant potential claims against the Settlement Noteholders,
and recommends that members of Class 19 vote against the Plan and support further
investigation into such claims.
The TPS Consortium does not believe the Debtors’ estates are receiving sufficient value in
exchange for the release of significant potential claims against the Settlement Noteholders,
and recommends that members of Class 19 vote against the Plan and support further
investigation into such claims.
In sum, the TPS Consortium believes the Plan fails to provide members of Class 19
with an appropriate recovery on account of their interests and is another in a series of
proposed settlements negotiated against the interests of Class 19. In that regard, the TPS
Consortium believes members of Class 19 should vote against the Plan and elect to “opt out”
of the releases proposed to be granted to JPMC, the FDIC, the Settlement Noteholders and
others. To the extent you share our concerns regarding the Plan, we would also encourage
you to voice your opinion to others who will be voting on the Plan.
Jack, here is what the fuss is about and some answers to your questions:
As noted above, the TPS Consortium believes the diversion, to holders of
common equity, of 30% of the value of the stock of the “reorganized” Debtors
and proceeds from litigation against third parties, before the payment in full of
preferred equity holders’ liquidation preferences, to be inappropriate. Upon
information and belief, the chairman of the Equity Committee holds only the
common shares that would be benefited by the contravention of the absolute
priority rule to divert potentially-significant value away from preferred equity
holders. In considering the propriety of that distribution scheme, members of
Class 19 are entitled to know the existence and extent of the Equity Committee’s
members’ holdings of the preferred equity they have chosen to disadvantage.
The Court has already conducted lengthy valuation proceedings and determined the
“reorganized” Debtors (including their residual tax attributes) to have significant value,
which value would accrue to holders of the stock in the “reorganized” Debtors. Moreover,
the TPS Consortium believes the estate’s claims against the Third Party Litigation Targets
could result in significant additional recoveries that could otherwise be available for
distribution to Class 19 upon satisfaction of remaining claims against the Debtors (if any). In
connection with the last confirmation hearing, over the Debtors’ strenuous objection, the TPS Consortium obtained Court authority to include in the trial record excerpts from a detailed
report by the United States Senate’s Permanent Subcommittee on Investigations illustrating
the types and potential value of just some of the claims that might be brought against Third
Party Litigation Targets. For your consideration, a copy of the TPS Consortium’s submission
is attached hereto at Exhibit A.2 In sum, the diversion of 30% of the foregoing value to
subordinate classes may result in your forfeiture of significant additional recoveries.
Under Bankruptcy Code Section 1129(b)(2)(C), holders of preferred equity interests
are entitled to receive payment of their full liquidation preferences before junior classes can
receive any recovery. That entitlement (commonly known as the “absolute priority rule”) is
triggered when a class of preferred equity votes against a Plan. If, however, the class of
preferred equity votes in favor of a plan that provides for a recovery to junior classes before
payment in full of applicable liquidation preferences, the protections of the absolute priority
rule may be lost. As such, the TPS Consortium urges you to vote against the Plan to
prevent the diversion of potentially significant value to subordinate classes before you have
received payment, in full, of the liquidation preferences to which you are otherwise
entitled.
Abandonment of Potentially-Valuable Estate Claims
During the July 2011 confirmation proceedings in connection with the last version of
the Plan, the Equity Committee, with the support of the TPS Consortium, achieved a
significant victory in obtaining permission to proceed with litigation against certain hedge
funds accused of engaging in illegal insider trading in securities of the Debtors (the
“Settlement Noteholders”). In the September opinion denying confirmation of the Plan, the
Court provided a lengthy discussion and analysis of potential claims against the Settlement
Noteholders, finding such claims to be “colorable” even on the limited evidence adduced
through the minimal discovery conducted by the Equity Committee to that point. Recovery
on such claims could result in significant additional value being made available to members
of Class 19 (either through affirmative recoveries from the Settlement Noteholders or through
disallowance of their claims against the Debtors (resulting in more value flowing down to
Class 19 through the recovery “water fall”)).
But, rather than pursuing that litigation (or even conducting additional discovery), the
Equity Committee appears to have acquiesced to the revised Plan’s: (a) full release of all
claims against the Settlement Noteholders (including claims you might have in your
individual capacities); and (b) a demand that the Court’s September opinion (as it applies to
potential claims against the Settlement Noteholders) be withdrawn and vacated as if the
Court had never found such claims to be colorable. In the view of the TPS Consortium, this
extraordinary abandonment of potentially-significant value for Class 19 is not justified by the
Settlement Noteholders’ potential provision of a secured loan, post-bankruptcy, to the
“reorganized” Debtors3 or other minimal consideration supposedly to be provided by the
Settlement Noteholders in connection with the Plan.
The TPS Consortium does not believe the Debtors’ estates are receiving sufficient value in
exchange for the release of significant potential claims against the Settlement Noteholders,
and recommends that members of Class 19 vote against the Plan and support further
investigation into such claims.
The TPS Consortium does not believe the Debtors’ estates are receiving sufficient value in
exchange for the release of significant potential claims against the Settlement Noteholders,
and recommends that members of Class 19 vote against the Plan and support further
investigation into such claims.
In sum, the TPS Consortium believes the Plan fails to provide members of Class 19
with an appropriate recovery on account of their interests and is another in a series of
proposed settlements negotiated against the interests of Class 19. In that regard, the TPS
Consortium believes members of Class 19 should vote against the Plan and elect to “opt out”
of the releases proposed to be granted to JPMC, the FDIC, the Settlement Noteholders and
others. To the extent you share our concerns regarding the Plan, we would also encourage
you to voice your opinion to others who will be voting on the Plan.
I believe that TPS would win the liquidating trust issue because that is being observed through out the waterfall from seniors all the way down to the creditors up until it hit equity where it is split with TPS/P/K Dimeq/$54 million sub claim/old commons. ... but it could also boil down to "consent".
The 70/30 split is unknown and can only be swayed by vote or depending on how the Judge's mood is, however, you bring up valid points on whether the settlement included on voting "yes" or "no" by the SNH to the plan.
All we know is TPS's vote, heavy prefferds holder's vote and heavy common holder's vote.
Heck, the smart commons who are aware of reality would sell and take a loss and buy higher tiered securities if they want to make "more" recovery. It is a no brainer with DIMEq, $54 sub claim coming to dilute commons and reduce the float of 30% to oblivion.
Nothing to lose, but all to gain.
imo
I don't know other than it is a bunch of disputed claims, one of which was the $15 million that was reduced from several billions.
The other was, if I rememeber, $54 million to be converted along with DIMEq into new commons sharing that 30% proposed commons share float.
So the 30% from the (70/30 split) will be comprised of OLD commons, DIMEq and $54 million claim converted to NEW commons.
I there is more, but I don't know them.
imo
Upon information and belief, and the various allegations in the pleadings and comments reviewed, this is the way I look at it through "clear" glasses as opposed to "rose colored" glasses since I believe in reality rather than fantasy.
Why the 70/30 as being proposed (key word is "proposed"): Prefferds are commons within the EC could not agree on a fixed split. Basically NO AGREEMENT within the members. Willingham only holds commons, so you see commons as proposed 30% split. The compromise is, let the "vote" and judge decide and let the EC member have post confirmation employment to cover your deficiency if commons were to get the 30%.
Why did Willingham settle: He is a business man. He realized that going to litigation with SNH will result in ZERO for common shareholders because HUQ is deficient approx $500 million, Sub claims at least by $15 million ( I know there is more), prefferds at $7.5 BILLION, all the while the estate is burning money. Plus, there is the uncertainty all of the $2.5 billion PLUS would prevail in litigation.
The waterfall would NEVER REACH COMMONS in litigation path. Potential disallowance is approx. $2.5 billion plus $$ of the time wasted by the estate, ie atty fees, burn rate, etc. Settlement was the only prudent path.
So, from an "individual" looking from the outside, how does potential disallowance of $3 billion be reduced to a settlement of $75 million and WMI2? See the above response: Litigation = no money in the waterfall for Willingham, cough, I mean commons shareholders. Some got post BK employment which will far exceed any return on their actual WMI security holdings. No only that, I would not be surprised if one of them becomes a board member, they are "awarded" more NEW commons shares as it is a "custom" to do.
imo of course.
Question re 70/30 split: If two of the three EC members hold preferred (one of them preseizure), why did the EC propose a 70/30 split?
Willingham, who only owns U's, comprises only one vote, so at least one of the P holders had to agree, as they needed a majority.
Thoughts?
WamuVooDoo: You would not have "baught" P's if you were so sure that commons was the best security. The fact is you wavered and instead of buying more commons, you chose to buy a higher tiered security because you were no longer confident in your common only holding. Doubt in your mind about commons recovery caused you to buy a high tiered security, otherwise you have been loyal to commons.
Now that you bought the P's, it is funny because I would not be surprised if your 1,000 shares of P's are now worth a lot more that your 850k shares of commons.
If you factor in the dilution from DIMEq and this other claim for $54 million (I did not check if the $54 million claim is associated with DIMEq or it was a subordinated claim that was settled to convert to common)to be converted into commons, the float gets really really small when it is time for distribution.
If you also factor in the liquidating trust, P's have a much higher chance to get to face value (not saying they will, but P's have much more potential to get 50% face value, if not higher).
Most of this hinges on the 70/30% split. So, since I did not do the math for you, I would say that 1,000 shares of P's you are worth far more that your 850K common holding.
imo of course.
This also includes the 70/30% split in the liquidating trust, which is also valuable because there are worthy pockets being targeted and the fact that prefferds are not far off from being next in line fore liq trust distributions since they are not many creditors that didn't get paid in full up to the allowed claim already.
imo
".take 70% or chance getting zero"
I think there is zero chance of the prefs getting "zero" because they vote no. No chance at all.
Certainly looks to me like the prefs will get at least 70% regardless of how they vote on the plan. But if they vote "no" there is a good chance that the judge will determine that the prefs have not consented to giving commons 30% and she may find that the law requires her to increase the prefs percentage to something more than 70%.
Response has changed after thinking about it. Under the right conditions. imo/eo
EC is the client of Susman & Godfrey. EC says "settle," then S&G settles.
S&G is NOT in control here, it is the EC as the client.
Who makes the $$ here? EC post employment as alleged by TPS and others.
imo
Dimeq "are lower than whale Doo Doo."
"...very difficult to overturn on appeal."
media.bloomberg.com/bb/avfile/vm38LgbMKwsU.mp3
Source: Bloomberg Law / Rochelle
Original Post: Y by Govinsder
Dimeq "are lower than whale Doo Doo."
"...very difficult to overturn on appeal."
It is one or the other. imo/eom
EC Q & A
Mr. Sargent,
Will the EC be putting out an additional Q & A for the benefit of the shareholders?
I am concerned about the lockup period of the shares and if they will be tradable after confirmation. Also, is the NewCo looking to be traded on an exchange and how long is the application period?
Thank you for your response.
Sincerely,
XXXXXX
Response:
Hi, thanks for the message. Yes, we are preparing the Q&A. These things always take longer than I hope and expect, and I know there are many shareholders eager for information, but I believe it will be available within the next few days. Our current plan is to file it with the court as a supplement to our letter to shareholders in support of the plan. It will contain a discussion of the restrictions on trading the shares that I hope will answer your questions. I believe proposed articles and bylaws of the reorganized debtor will be filed at some point before confirmation and those documents too may provide you with the information you are looking for.
Best,
Edgar
EC Q & A
Mr. Sargent,
Will the EC be putting out an additional Q & A for the benefit of the shareholders?
I am concerned about the lockup period of the shares and if they will be tradable after confirmation. Also, is the NewCo looking to be traded on an exchange and how long is the application period?
Thank you for your response.
Sincerely,
XXXXXX
Response:
Hi, thanks for the message. Yes, we are preparing the Q&A. These things always take longer than I hope and expect, and I know there are many shareholders eager for information, but I believe it will be available within the next few days. Our current plan is to file it with the court as a supplement to our letter to shareholders in support of the plan. It will contain a discussion of the restrictions on trading the shares that I hope will answer your questions. I believe proposed articles and bylaws of the reorganized debtor will be filed at some point before confirmation and those documents too may provide you with the information you are looking for.
Best,
Edgar
my seniority comment was mainly regarding how tps has more leverage as for as the 70/30.was concerned and bring the split to more favorable.terms.
I do.agree, that dimeq may take the majority of that 30% (subject to any change in percentage) and commons lose out because of.the dimeq ruling. as for.the ec, I really don't think.they care as much because of their post bk employment. plus, I wouldn't be surprised if they were" awarded" more common shares as compensation. heck, if I was them, I would probably do.the same. ha ha j.k.
as to the nols, they belong to the company, not shareholders. as to the change in ownership re: nols, there are two sets of nols with one tied to onwership change and the other is "loosely" tied. ec is going after nols that are loosely tied and unresticted. so a significant amount of. nols are.still available.
imo
That 51% is a falsehood because you have hedge funds who also have a decent stake in prefferds. So in reality, the hedge funds still.had control regardless. Imo
I personaly would not use that math.
if$ 7.5 billion got 70% out of 100% of wmi2, what does $337 million get out of the balance of 30% shared with commons? keep in mind that 30% could get smaller and prefferds are more.senior.and have more.rights than dimeq and.commons.
I didn't do the math, but I am pretty sure p's are still a better value. if someone.wants to.do.the math for a more accurate conversion, please do so. would be intersting.
just saying from a different perspective.
imo
Wamutrader: my vote is no to plan and yes to releases, unless TPS's gets us more favorable.terms which will result in an amended POR before we actually vote.
We know.judge, jpm, fdic, snh all.want to pass this plan, but as long as there are objections, judge will accommodate to a certain degree.
While I know tps is pushing absolute.priority, they are only postuering to more favorable.terms and rightfully so. I don't believe they are try to cancel commons. Tps's motives are.aligned with preferreds.
Imo
Imo
As noted above, the TPS Consortium believes the diversion, to holders of
common equity, of 30% of the value of the stock of the “reorganized” Debtors
and proceeds from litigation against third parties, before the payment in full of
preferred equity holders’ liquidation preferences, to be inappropriate. Upon
information and belief, the chairman of the Equity Committee holds only the
common shares that would be benefited by the contravention of the absolute
priority rule to divert potentially-significant value away from preferred equity
holders. In considering the propriety of that distribution scheme, members of
Class 19 are entitled to know the existence and extent of the Equity Committee’s
members’ holdings of the preferred equity they have chosen to disadvantage.
The Court has already conducted lengthy valuation proceedings and determined the
“reorganized” Debtors (including their residual tax attributes) to have significant value,
which value would accrue to holders of the stock in the “reorganized” Debtors. Moreover,
the TPS Consortium believes the estate’s claims against the Third Party Litigation Targets
could result in significant additional recoveries that could otherwise be available for
distribution to Class 19 upon satisfaction of remaining claims against the Debtors (if any). In
connection with the last confirmation hearing, over the Debtors’ strenuous objection, the TPS Consortium obtained Court authority to include in the trial record excerpts from a detailed
report by the United States Senate’s Permanent Subcommittee on Investigations illustrating
the types and potential value of just some of the claims that might be brought against Third
Party Litigation Targets. For your consideration, a copy of the TPS Consortium’s submission
is attached hereto at Exhibit A.2 In sum, the diversion of 30% of the foregoing value to
subordinate classes may result in your forfeiture of significant additional recoveries.
Under Bankruptcy Code Section 1129(b)(2)(C), holders of preferred equity interests
are entitled to receive payment of their full liquidation preferences before junior classes can
receive any recovery. That entitlement (commonly known as the “absolute priority rule”) is
triggered when a class of preferred equity votes against a Plan. If, however, the class of
preferred equity votes in favor of a plan that provides for a recovery to junior classes before
payment in full of applicable liquidation preferences, the protections of the absolute priority
rule may be lost. As such, the TPS Consortium urges you to vote against the Plan to
prevent the diversion of potentially significant value to subordinate classes before you have
received payment, in full, of the liquidation preferences to which you are otherwise
entitled.
Abandonment of Potentially-Valuable Estate Claims
During the July 2011 confirmation proceedings in connection with the last version of
the Plan, the Equity Committee, with the support of the TPS Consortium, achieved a
significant victory in obtaining permission to proceed with litigation against certain hedge
funds accused of engaging in illegal insider trading in securities of the Debtors (the
“Settlement Noteholders”). In the September opinion denying confirmation of the Plan, the
Court provided a lengthy discussion and analysis of potential claims against the Settlement
Noteholders, finding such claims to be “colorable” even on the limited evidence adduced
through the minimal discovery conducted by the Equity Committee to that point. Recovery
on such claims could result in significant additional value being made available to members
of Class 19 (either through affirmative recoveries from the Settlement Noteholders or through
disallowance of their claims against the Debtors (resulting in more value flowing down to
Class 19 through the recovery “water fall”)).
But, rather than pursuing that litigation (or even conducting additional discovery), the
Equity Committee appears to have acquiesced to the revised Plan’s: (a) full release of all
claims against the Settlement Noteholders (including claims you might have in your
individual capacities); and (b) a demand that the Court’s September opinion (as it applies to
potential claims against the Settlement Noteholders) be withdrawn and vacated as if the
Court had never found such claims to be colorable. In the view of the TPS Consortium, this
extraordinary abandonment of potentially-significant value for Class 19 is not justified by the
Settlement Noteholders’ potential provision of a secured loan, post-bankruptcy, to the
“reorganized” Debtors3 or other minimal consideration supposedly to be provided by the
Settlement Noteholders in connection with the Plan.
The TPS Consortium does not believe the Debtors’ estates are receiving sufficient value in
exchange for the release of significant potential claims against the Settlement Noteholders,
and recommends that members of Class 19 vote against the Plan and support further
investigation into such claims.
The TPS Consortium does not believe the Debtors’ estates are receiving sufficient value in
exchange for the release of significant potential claims against the Settlement Noteholders,
and recommends that members of Class 19 vote against the Plan and support further
investigation into such claims.
In sum, the TPS Consortium believes the Plan fails to provide members of Class 19
with an appropriate recovery on account of their interests and is another in a series of
proposed settlements negotiated against the interests of Class 19. In that regard, the TPS
Consortium believes members of Class 19 should vote against the Plan and elect to “opt out”
of the releases proposed to be granted to JPMC, the FDIC, the Settlement Noteholders and
others. To the extent you share our concerns regarding the Plan, we would also encourage
you to voice your opinion to others who will be voting on the Plan.
If you or your counsel wish to discuss the foregoing prior to casting your ballot,
please feel free to contact our counsel Robert Stark (212-209-4862) or Jeremy Coffey (617-
856-8595) of Brown Rudnick LLP.
Yes, imo, record date and settlement is only good for divies/interest distribution, etc. All other purposes should not matter, just the record date. imo
Agreed, TPS is posturing their position to get everything they are entitled to, but will settle on a more favorable allocation of WMI2 and hopefully the Liquidating Trust.
imo
Well, imo only, if preferreds get the liquidating trust via APR, then I believe that there is some substantial money that preferreds can recover (before commons/dimeq up to $1,000 face value) because most of the creditors are already paid off, with the exception of PIERS (which is capped at $250 m ?) and sub claims. Next in line is preferreds, but the DS has the Liquidating Trust shared equally with commons (and now Dimeq).
Lets see what TPS can extract as far as 70/30 and Liquidating Trust. After all, EC did give the shaft to Preferreds and they know it as evidenced by the verbiage of the 70/30 split is not set in stone.
Preferreds can only benefit from riding the coat tails of TPS.
S&G will have a sizable war chest for litigation. Must need it if there is a target(s).
Strictly my opinion.
Off the top of my head, it is January 5 or 6, 2012. eom
OBJECTION OF THE CONSORTIUM OF TRUST PREFERRED
SECURITY HOLDERS TO DEBTORS’ MOTION FOR APPROVAL OF
DISCLOSURE STATEMENT FOR THE JOINT PLAN OF AFFILIATED DEBTORS
PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
http://www.kccllc.net/documents/0812229/0812229120104000000000017.pdf
OPPOSITION OF THE OFFICIAL COMMITTEE OF EQUITY SECURITY
HOLDERS TO THE MOTION OF THE CONSORTIUM OF TRUST
PREFERRED SECURITY HOLDERS TO DETERMINE PROPRIETY OF
PROPOSED CLASSIFICATION OF INTERESTS SUBJECT TO TREATMENT
UNDER CLASS 19 OF THE SEVENTH AMENDED PLAN OF LIQUIDATION
http://www.kccllc.net/documents/0812229/0812229120104000000000019.pdf
Lets see if TPS can get the 70/30 more favorable to Preferreds as well as the Liquidating Trust to retain APR. If they can, the Preferreds hit the JACKPOT!
IMO
Yes, there is common stock election. I am out to lunch. GLTA eom
Yes, the 250 million max value is the $10.86, but that $10.86 is "value", not cash. That is why H's are where they should be. imo/eom
I don't actually remember, but it is something like $3'ish or $250 million max "value", etc.
As for the PPS moving up, I think only initially because DIMEq got Class 21.
So I would say that the PPS is about right where it should be.
imo
Done deal. Por will be confirmed this time around. Any objections will be resolved during confirmation.
Any appeals from dimeq will be equitably moot. As for a writ, I doubt because that is just more fees for the plaintiff and imo, a losing battle.
Dimeq has always been equity with a claim that was moot.
Imo.
Yup, $337 million dimeq reserve back into waterfall for the benefit of huq. Imo/eom