is making moves.
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You're going by a "feeling" and "opinion" that commons will be cancelled. I'm going by all of the DD that says otherwise. We have huge institutional common stockholders and all of their DD behind us. Moreover, recent communications between Matt2216 of the Yahoo! forum and several WMI attorneys confirm that there is no plan to cancel common stock -- on the contrary, they're working to get fair value for our shares.
For Matt2216's posts, see:
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=86316&tid=204601&mid=204601&tof=200&frt=2
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=86316&tid=205861&mid=-1&tof=-1&rt=2&frt=2)
Finally, we all know WMI is going to prevail -- whether by settlement or trial -- and assets will far outweigh liabilities.
I think there is a good sticky on this message board that should serve as a simple reminder.
There is no way commons are going to get cancelled.
Jest: The significance of the bondholders/noteholders is that they own WMI debt and are guaranteed either (a.) a percentage of the value of the debt upon liquidation of the WMI estate if we were to proceed in chapter 7; or (b.) a percentage of the value of the debt upon acquisition of WMI.
The noteholders/bondholders intervened in the litigation because they want to make sure the WMI estate recovers the most it can. The more WMI recovers, the more of its outstanding debt that it can pay off. Keep in mind that in the winding down of a company, the debt/creditors must be paid before any proceeds can flow to equity/stockholders. They don't care about equity like WAMUQ -- they only care about WMI debt being covered. The noteholders/bondholders group initially objected to the settlement over the savings plan and I wouldn't be surprised if they object to any settlement between WMI and JPM if the terms aren't as favorable to them. The recovery that the bondholders are anticipating (just like us) is either going to come from damages or settlement with JPM/FDIC.
This is of importance to JPM because I strongly believe it intends to proceed with the second option -- settling the litigation and acquiring WMI -- where its acquisition of WMI would hold JPM liable for WMI's debt and any/all exposure thereof. By filing this motion, I think JPM is trying to identify who holds WMI debt and how much they're due -- possibly to try and negotiate with these bondholders/noteholders to reduce the debt and leave more equity for acquisition -- that way, when the settlement is complete and aquisition takes place, JPM will be buying out a cash-rich company with controlled/limited exposure to debt.
That's just my honest opinion and I hope it answered the question you asked in your PM (I don't have PM capabilities with my account). Good luck to everyone and go WAMU!
Fish: I think JPM filed that motion because it wants to accurately gauge its exposure to WMI debt. The threefold increase over eight months is a little curious and I'm sure JPM wants to know who would be buying up all of the WMI bonds. This would be valuable information if JPM has intentions of settling the matter with WMI in the imminent future -- and most especially if it gives JPM an opportunity to negotiate with key noteholders for less exposure to WMI debt in the event of a settlement/acquisition.
I highly doubt this motion was filed to signal the markets because doing so would be frivolous and could potentially subject JPM to sanctions if the basis for the motion has no merit and/or it was filed in bad faith.
I would also be very curious to know who these noteholders are. Fortunately for us, if Judge Walrath approves the motion, the noteholders' identities will have to be disclosed if they want to maintain any kind of standing in the litigation. I know they'll have to disclose to the Court, but I'm not sure whether the information would be disclosed pursuant to a confidentiality order or available to the public. It's going to depend on Judge Walrath's Order.
Something definitely happened over the weekend. I wonder if it could be a leak or perhaps just a change in sentiment by some of the major institutional players.
Check out the article on Bloomberg concerning JPM's motion to compel the noteholders to cite their claims -- common sense alone will tell you that the only reason JPM wants to know anything about WMI debt is because it is interested in a potential settlement/acquisition of WMI.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aY_885H1VgN4
Our PPS and our bid/ask have not changed in over an hour.
This is very strange for a Friday afternoon.
haha, have a safe drive Jestiron...hopefully you'll have some great news to welcome you to Delaware!
Check out the bid/ask of 0.10/0.10 --- is something up?
Something is definitely up on the financial side too. JPM stock has appreciated nearly ten percent since the last hearing.
Matt2216 on Yahoo! confirmed with Quinn Emmanuel that we would be (theoretically) receiving the discovery documents from JPM by the end of the month, but does anyone know when we were going to present the Proposed Discovery/Deposition Schedule to Judge Walrath?
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=86316&tid=205861&mid=205861&tof=15&frt=2
Also, BOPFAN seems to think (and I agree) that the "discovery schedule" negotiations confirmed by Tal are really incogneto settlement negotiations. WMI nor its Counsel could ever reveal material non-public information without being in violation of the SEC Act of 1934. Moreover, Matt2216's communication with Quinn Emmanuel further supports this notion since the attorney he contacted yesterday stated he could not comment on whether settlement negotiations were ongoing or stalled.
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_W/threadview?bn=86316&tid=204794&mid=204794
I guess I'm just curious as to what (if anything at all) we will be presenting to Judge Walrath. There is no way JPM is going to move forward with discovery -- and this Motion to Compel the noteholders is independent of the Rule 2004 discovery motion, so it really shouldn't cause any delays with respect to JPM's responsibility to comply with the Court's order to produce documents.
Very good point, Fish!
I don't think this Motion by JPM to compel the noteholders is anything us "common" folks need to worry about -- nor do I suspect it is a delay tactic by JPM to further evade or delay settlement. This is action against the noteholders group, which happens to be the same group that objected to WMI's motion to approve settlement on the savings plan issue last month. JPM can proceed in its settlement negotiations with WMI (as I suspect they are given the effect of the Rule 2004 examination) and this motion to compel the noteholders will have no effect. If anything, I imagine JPM is going to try to negotiate some kind of third-party settlement with the noteholders while or after it finalizes the settlement with WMI -- and it wants to ensure that the noteholders do not object to settlement with WMI.
What isn't so clear to me is why JPM wants to go through the trouble of dealing with the noteholders at all. Needless to say, the timing of the omnibus hearing on August 24th would be perfectly convenient for Judge Walrath to hear any oral argument on a joint motion by WMI to approve settlement with JPM. I sure hope that happens and I'll be monitoring PACER like a hawk today in case anything comes through!
Read the footnote on the preceeding page -- JPM was referring to the WMI Noteholders Group's objection to WMI's Motion for Approval of Settlement with JPM (the settlement over the savings plan, which was recently granted by Judge Walrath). JPM isn't referring to any current settlement talks by that statement.
Keep telling yourself that.
I just hope for your sake that you're not sitting in the station waiting while this train takes off.
Sure, but WMI cannot be acquired until it is reorganized and emerges from bankruptcy -- and WMI cannot reorganized and emerge from bankruptcy until this litigation is settled or decided.
It's a viscious cycle. First thing is first -- settlement must happen before acquisition can happen.
I believe so.
I don't have the time to sift through his/her posts on Yahoo! but I've attached a link to all of them. See below:
http://search.messages.yahoo.com/search?.mbintl=finance&q=bopfan&action=Search&r=Huiz75WdCYfD_KCA2Dc-&within=author&within=tm
Other offers from whom?
The settlement of litigation between the FDIC, JPM and WMI is one issue. The reorganization of WMI and subsequent offers for acquisition thereafter is another issue.
Judge Walrath is going to encourage settlement between the parties with respect to the litigation and claims therein. I highly doubt she would obstruct any mutually agreed settlement if the parties agree to it. I do, however, agree that she will entertain a variety of offers following the settlement and reorganization in effort to maximize the value of the debtors' estate.
Very true. But even if that were the case and the insiders did have a direct/indirect interest in WAMUQ as a result of accumulation over the near twelve-month period, we would not be seeing the crazy increases in PPS right now that some people seem to expect as we approach settlement.
The people who are in, are already in, IMO. That's why there is not going to be any crazy run in PPS before settlement is announced. The craziness is going to ensue after the document is filed on PACER and/or we all read the PR stating the settlement has been made.
Because (1.) that would violate SEC insider trading laws, which would result in liability for the lawyer and quite possibly his or her aunt and uncle; and (2.) that would violate the ABA rules of professional responsibility, which would likely result in the lawyer getting disbarred.
We're talking about tens of billions of dollars and lots of potential liability (not to mention, during a time when the government is starting to come down on financial regulators and banking institutions) here. This is going to be subject to the highest confidentiality.
Excellent post, Desperado90.
I think your reasoning is dead-on accurate. However, I don't think negotiations are stalling -- if anything, I think they're being expedited and subject to strict confidentiality.
For the many reasons you stated (and more, i.e., criminal liability, etc.), there is no way JPM would proceed with discovery. Based on what we know, it's probably safe to say that the lack of production on Saturday, August 1st confirmed that sentiment. The lack of filings on PACER, however, suggest (as BOPFAN predicted) that WMI may have granted a forbearance on the production subject to agreement over the predominant terms of the settlement contract. If this wasn't the case, we'd be seeing Motions by JPM for an Extension of Time to Respond to WMI's Rule 2004 Subpoena, Motions by WMI for Rule 11 Discovery Sanctions, or Stipulations Extending the Time for JPM to Produce Documents, filed on PACER -- but we're not. Clearly, something is going on behind very tightly closed doors as we speak.
We're very close. JPM has exhausted the majority of it's delay tactics and now it's just a matter of getting the settlement agreement in order and into the public eye.
Hysterical...Geithner curses out Bair, Bernanke & Co. over policy matters.
http://www.businessinsider.com/enough-2009-8
I like the analogy fsshon. I think we're close to the end of this charade.
No, this is in the turnover action and it pertains to JPM's opposition to WMI's motion for summary judgment. This has nothing to do with discovery or the documents that are due tomorrow.
Here's a theory...albeit a crazy one...but a theory nonetheless:
If settlement has been on the table but not given the green light by JPM management, I presume that the MMs are free to trade/short/manipulate as much as they want.
However..
If JPM management has directed counsel to finalize the settlement with WMI to avoid proceeding with discovery, it might be liable for insider trading violations if it allows or encourages Knight (and other MMs with which JPM has a financial or fiduciary interest) to proceed with any trading/shorting/manipulation. Accordingly, the volume we usually see from MM activity would be on the calm side until settlement is executed and made public.
Any thoughts?
Any idea why we're trading with such low volume today?
We're on the virge of a potential settlement weekend and most of the trading went on from Tuesday through Thursday. It's so weird. Any thoughts?
Yes, I put in one last order of 6500 to round me up.
I agree. There is absolutely NO way JPM will be able to drag this out into the fall/winter without proceeding with discovery. IMO, this will be over very soon -- the first round of documents are due on Saturday.
+1. There won't be a run. Everyone knows settlement discussions are (and have been) on the table, yet the stock has barely reflected that knowledge. The only run we'll see is the one after settlement is announced.
No, because this is not a derivative lawsuit where certain WMI shareholders are suing -- this is a direct action on behalf of all shareholders where WMI is suing the FDIC and JPM. Thus, if you are a shareholder, you have an ownership interest in WMI and will be entitled to the proceeds/damages of the litigation thereof.
It's going to be lovely seeing these MM's get screwed when we settle.
You're 150% right. The audio recordings indicated that settlement talks have been underway. The PPS did not reflect this notion whatsoever. Moreoever, we have yet to see Weil's billing statements, which would present us all with a bit more insight on the status of settlement negotiations.
We can't go by PPS. I suspect one day we'll be at $0.10-0.12/share (pre-settlement) and the next we'll be at $12.00+ (post-settlement).
As far as the market can tell, yes...however, I suspect JPM has been pretty busy and will continue burning the midnight oil as it determines how to come to a settlement in time for Saturday.
Same here. The crazy thing is that we're going to see some fantastic numbers as a result of the settlement, but we're going to see even better numbers after we emerge from bankruptcy and get acquired by someone else. How much better is going to depend on the financing of the settlement -- for example, if JPM finances the deal through debt, the post-acquisition value should be significantly more than it would be if JPM were to finance the deal with cash.
I agree that 'mo money results in 'mo problems. That's why I think it's a good idea to have a general idea of what you plan on doing with the return before settlement comes -- that way you're making plans while in a more rational, frugal state of mind.
Today seems like a rather quiet day. I really, really hope JPM's attorneys are working diligently with management to finalize a settlement agreement with WMI in time for Saturday.
If Bopfan is right and we settle for 2x book value, we're talking about a settlement of roughly $52B. The proceeds flowing to the commons from that kind of number would be absurd. It would change lives and transfer wealth for sure. The sheer thought of it makes me even more proud to be a part of our justice system!
lol, I didn't have a cliche phrase for "multi-million."
I know. Life would be grand.
You are dead on, Billiam. Very well said -- just like your i-hub signature.
BOPFAN Post from Yahoo!
July 28, 2009 -- 3:18PM
"I didn't anticipate the process would take so long, and it has run on because of JPM's recalcitrance over the magnitude of its share of the payout. A friend of mine who worked with Jamie Dimon told me that he is extremely shrewd and pragmatic over money (hasn't been seduced by the jet set lifestyle) that he would fight over the last nickel. This convinced me that he will press the P&A against the FDIC to assure that JPM's share is as low as possible.
Nevertheless, I reiterate my long-held beliefs about WMI receiving far more than book value. A couple of weeks ago I encouraged people here unfamiliar with accounting to research this term. Those who do will understand how paying book value would be a gross undervaluation of WMI's equity in what was once the nation's sixth-largest bank. Imagine valuing Manhattan (the world's most valuable city) at 1x what Peter Stuyvesant gave the native Americans for it. In no way could JPM have replicated the WaMu banking franchise for $26 billion, and to allow the FDIC and JPM to settle the seizure for that amount would be a travesty that won't happen. Others can disagree, but I see at least a 2x payout, and it would only be that low because of the rash of bank failures."
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=86316&tid=198368&mid=198487&tof=2&rt=1&frt=2&off=1
Are discovery documents still due on Saturday, August 1st?
Peg Brickley from Dow Jones News Wires was present at the hearing according to the court room sign-in sheet (Docket No. 1395). I wonder whether she plans to write an article on the matter or at least on the status of the litigation.