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Purchase Premium IS NOT Purchase Price ==> proof
"Purchase Premium" never was and is not the same as the "Purchase Price"
Otherwise this sentence would NOT MAKE ANY SENSE:
http://www.upi.com/Archives/1986/03/28/Failure-leads-to-first-branch-bank-in-Kansas/9954512370000/
'Silver Lake Bank will pay the FDIC a $15,000 purchase premium and will purchase certain of the First State Bank's failed loans and other assets for $3.8 million,' said FDIC spokesman Bill Olcheski in Washington.
Bids to the FDIC usually include assumptions of deposits, with or without deposit premiums. During 2008–2011, most resolutions have included no deposit premium. Assets are purchased generally based upon their book value at the date of the failed bank's closure.
WaMu Asset Acceptance Corp., here is the newest filing (2015-05-12)
http://www.sec.gov/Archives/edgar/data/1317069/000092963815000513/0000929638-15-000513-index.htm
especially the exhibit (the asset list, $21 billion! now):
http://www.sec.gov/Archives/edgar/data/1317069/000092963815000128/wamu-67348_exhibit991.htm
Simple "Copy & Paste" error! But I guess the judge will be pissed
Should we draft another FOIA request all together!?
Thank you dspencer, that helps a lot! I think answering my questions is in the public interest and thus a waiver of fees should be "more than fair and reasonable"
Perhaps we should draft a new FOIA request all together which meets the FDIC's FOIA requirements.
I could check it against the answer I've received and verify that all the requirements are met.
JWW, I believe you need to ask for a specific document. They won't answer questions. Also, here is a section on fees and when they can be waived:
www.foia.gov/faq.html#fees
Can I ask that any fees be waived?
You may request a waiver of fees. Under the FOIA, fee waivers are limited to situations in which a requester can show that the disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations and activities of the government and is not primarily in the commercial interest of the requester. Requests for fee waivers from individuals who are seeking records on themselves usually do not meet this standard. In addition, a requester's inability to pay fees is not a legal basis for granting a fee waiver.
The Senior FOIA Specialist explained on 2(!) A4 pages why he won't answer my SIMPLE question instead of saying
"Yes, JPM bought WMB and WMBfsb for a final payment of $1.88!"
This reply on 2 pages from the Senior FOIA Specialist was more expensive than saying that short sentence above, although one of the points he argued was the costs...
A little bit ... odd? Right?
FDIC's reply to my FOIA request...
...regarding the $1.88 billion "purchase premium".
In short, they DID NOT answer my questions:
1. whether the $1.88 bln. JPM paid to the FDIC as "Initial Payment" according to the P&AA is only a deposit PREMIUM?
2. Whether the $ 1.88 bln. reflects the PURCHASE PRICE as a final payment FOR ALL ASSETS of WMB, including the assets of WMB fsb
The available information includes FDIC Press Release PR-85-2008, dated September 25, 2008, which provides, in part, "JPMorgan Chase acquired the assets, assumed the qualified financial contracts and made a payment of $1.9 billion. Claims by equity, subordinated and senior debt holders were not acquired."
[...]
Please note that the disclosure of information relating to failed financial institution bid documents is subject to the Failed Financial Institution Bid Documents disclosure policy.
On Thursday it was at $1.65!
Damn, what a spike!
AQXP: Chart: http://schrts.co/kVXIKb
I guess FNMA would be very similar when released...
For those that don't believe in the short squeeze, take a look at $AQXP 's trading from Friday and today. Just imagine $FNMA 's squeeze once released.
Perhaps they really did not see the forest for the trees but I admit that would be very unlikely. Also that these suspensions occurred 1 whole month after the amicus briefs does not support this unless the court is very slow!
Net Worth Sweep is void ab initio (Myron T. Steele)
Treasury lost big-time!!!
http://cfif.org/v/images/pdfs/Amicus-Curiae-Brief.pdf
CONCLUSION
Preferred stock cannot be given a cumulative dividend right equal to all the net worth of a corporation in perpetuity. For the foregoing reasons, the undersigned respectfully submits that this Court should hold that the Net Worth Sweep is void ab initio and unenforceable under the corporate law governing the Companies and, accordingly, reverse the decision of the District Court.
Respectfully submitted,
/s/ Myron T. Steele
Myron T. Steele
POTTER ANDERSON & CORROON LLP
1313 North Market Street, 6th Floor
Wilmington, DE 19801
Tel: (302) 984-6030
Fax: (302) 658-1192
Counsel for Amicus Curiae
Center for Individual Freedom
Myron T. Steele is a partner in the firm's Corporate Group. He is the former Chief Justice of the Supreme Court of Delaware.
I hope without a new gap
My guess is the bondholders registered their claims with the FDIC and now are WAITING (just as we do) and don't sell...
I just want to add "Thackeray III Bridge LLC"
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=111722953
Thanks UncleBo for your great DD
The only gift from Sheila to Jamie was...
Get the assets of WMB now (in the crisis year 2008), pay for them later (maybe in 2015)
...to help JPM to survive the crisis in my opinion!
Like you I also believe that the $1.88 bln. (exactly 1% of all deposits by coincidence! ) was only the initial payment (=downpayment) as stated in the P&AA and was only a PURCHASE PREMIUM for "All Deposits" and the franchise value of WMB. All assets have/had TO BE PURCHASED for BOOK VALUE as reflected on the books as of bank closing.
I personally don't think JPMC will give much, if anything, back to the FDIC. I believe that JPMC will pay the FDIC for assets received from the "transaction" back in 9/08. The $1.88B was a downpayment,imo. Time for JPMC to pay up, IMO.
Better call it "senior preferred stock purchase enforcement"
Yes, according to the senior preferred stock purchase "agreement"
Net fair value gains were $2.6 billion in the second quarter of 2015...
...compared with losses of $1.9 billion in the first quarter of 2015. Fair value gains for the second quarter of 2015 were due primarily to increases in longer-term interest rates positively impacting the value of the company’s risk management derivatives. The estimated fair value of the company’s financial instruments may fluctuate substantially from period to period because of changes in interest rates, the yield curve, mortgage spreads, implied volatility, and activity related to these financial instruments.
Fannie Mae Posts $4.6B Profit in 2Q; Paying $4.4B Dividend
http://abcnews.go.com/Business/wireStory/fannie-mae-posts-46b-profit-2q-paying-44b-32916788
Fannie Mae Reports Net Income of $4.6 Billion and Comprehensive Income of $4.4 Billion for Second Quarter 2015
http://money.cnn.com/news/newsfeeds/articles/prnewswire/PH73762.htm
Thank you for your explanation, I've read your post wrong. I thought you've said the claims of DB and others are only $2.75 billion, sorry!
Is there an example where additional shares were issued to a CTG? And what do you mean by "issued". Will these shares be issued for free, or do you mean a rights offering and the CTG has to pay for these shares if they want to increase their position. The 5% MUST accept the offering and buy these shares, all the others can buy more shares if they want to?!?
TIA
Where do you read that?
From your post:
As of June 30th the FDIC-R had only about $2.75 billion with claims from DB, Jr bonds and equity per the Uncle Bo post.....
As of June 30, 2015, the Receiver has approximately $2.75 billion to distribute to holders of claims allowed by the receivership, according to the priority established in 12 U.S.C. § 1821(d)(11)(A).
Interesting and in addition to your post...
https://books.google.de/books?id=YPfwCAAAQBAJ&pg=PA159#v=onepage&q&f=false
At the auction a uniform package is offered to bidders. This package consists of deposits and other nonsubordinated liabilities and a like amount of assets, less the amount of the premium bid.
In a deal brokered by the federal government, JPMorgan Chase will pay $1.9 billion for deposits and branches. WaMu depositors will be protected
[...]
For his $1.9 billion, Dimon gets WaMu's deposits along with $176 billion of home loans, on which JPMorgan is expected to lose some $31 billion.
What do you mean exactly? Why I've sent the FOIA request today and not 7 months ago?
In fact it started with this post from "wwhatthe" only 8 days ago...
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=115586784
...and the sudden appearance of "scrivenerserror" which both motivated me to dig deeper.
Then I found one book mentioning a "purchase premium" ...
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=115592609
...and bit by bit I found more information that absolutely supports this "theory":
http://investorshub.advfn.com/boards/profile.aspx?user=482550
Thanks boarddork, all pieces of the puzzle fit together perfectly at the moment, at least for me, with all the links, "proofs" and explanations I've found regarding the FDIC's bid process in connection with the terms "premium", "discount", "initial payment". Everything seems logical for me, and at a certain point of time the scales fell from my eyes:
The 1.88 bln. could not be the purchase price, NEVER! And all the information I've found support this "theory" (in MY understanding)
Of course the expected reply to my FOIA request from the FDIC could shatter all the hopes in one second when they say, it WAS the final PURCHASE PRICE for all WMB and WMB fsb assets...
Thank you for the information!
Courts May Not Enjoin the Receiver
Page 30 (=PDF page 35):
https://www.fdic.gov/about/freedom/drr_handbook.pdf
Courts May Not Enjoin the Receiver
Congress has provided the FDIC, as receiver, with additional protection by prohibiting courts from issuing injunctions or similar equitable relief to restrain the receiver from completing its resolution and liquidation activities. For example, U.S.C., Title 12, section 1821(j) bars an injunction to prevent foreclosures or asset sales. Similarly, courts are prohibited from issuing any order to attach or execute upon any assets in the possession of the receiver. These statutory provisions, however, do not bar the recovery of monetary damages.
Courts may not enjoin the receiver.
Congress has provided the FDIC as receiver with additional protection by prohibiting courts from issuing injunctions or similar equitable relief to restrain the receiver from completing its resolution and liquidation activities. For example, the FDI Act bars an injunction to prevent foreclosures or asset sales. Similarly, courts are prohibited from issuing any order to attach or execute upon any assets in the possession of the receiver. Those statutory provisions, however, do not bar the recovery of monetary damages.
The WMILT is the legit successor of WMI's Ch11 estate, and the other thing is the FDIC's resolution process of a failed bank (WMB) which has IMO not finished yet. Two very different animals. Why should someone contact the WMILT?
Then I guess they won't answer although they've accepted it. Let's wait and see!
But can anybody tell me if I am allowed to post the reply (if any) to my questions here?!? I mean a quotation. Or is the answer only for the one who made the request?!?
Reply from FDIC for my FOIA request
They ACCEPTED my FOIA request (got a log number assigned). It can take up to 20 business days, and under certain circumstances even longer.
The request was:
1. whether the $1.88 bln. JPM paid to the FDIC as "Initial Payment" according to the P&AA is only a deposit PREMIUM?
2. Whether the $ 1.88 bln. reflects the PURCHASE PRICE as a final payment FOR ALL ASSETS of WMB, including the assets of WMB fsb
Made an FOIA request to the FDIC (to the Senior FOIA Specialist, FOIA/Privacy Act Group - Legal Division) regarding the $ 1.88 billion (only a deposit premium or the total and final purchase price?) this morning!
I hope he will answer soon (or at least reply at all) and the answer is as unumbiguous as my question!
I will keep you up to date...
BTW, it is undoubted by me that JPM purchased all assets. My only doubt is they got it all for $1.88 bln.
No, I only wanted to show that it cannot be as simple as "a positive PURCHASE PRICE is called premium" and "a negative PURCHASE PRICE is called discount".
I really do appreciate everyone's opinion, believe me!
BTW, I've made an unambiguous FIOA Request to the FDIC this morning! I hope they will answer soon, or at least reply at all!
That's YOUR understanding of PREMIUM and DISCOUNT, here are two other ones:
From GrantThornton...
http://www.grantthornton.com/staticfiles/GTCom/Financial%20services/FDIC/Web_What%20you%20need%20to%20know%20about%20FDIC-assisted%20transactions_Feb%202011.pdf
...and PDF page 11: http://www.frbsf.org/economic-research/files/84-2_16-30.pdf
...and even from the FDIC's bid instruction for WaMu:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=115625930
Also have a close look (red circle) at the bid from JPM:
Again, I don't doubt that JPM purchased the assets, but NOT for $ 1.88 billion. I am not interested in assets explicitly excluded in Schedule 3.5
Blue, I said "Schedule 3.2", not chapter 3.2 or 3.1
Page 35 (=PDF page 40) of the WaMu P&A:
SCHEDULE 3.2 - Purchase Price of Assets
For most items "Book Value" !
https://www.fdic.gov/about/freedom/washington_mutual_p_and_a.pdf
My recent posts: http://investorshub.advfn.com/boards/profile.aspx?user=482550
Blue, NONE of these 4 posts show that JPM purchased all assets FOR 1.88 billion.
It is undoubted by me that JPM purchased the assets of WMB, but NOT for the 1.88 bln. BUT for book value / market value as listed in Schedule 3.2
Please reread my post you replied to (and all my other recent posts where I show the $1.88 billion was only a PREMIUM for "All Deposits" and the failed banks "franchise value"...)
The P&A unequivocally says the $ 1.88 billion is an "Initial Payment". It was not me who "implied" it. I just wanted to show the FDIC does not say "purchased all assets for X $" but instead say "...made a payment of $1.88..."
Look at the original FDIC press release from September 2008...
https://www.fdic.gov/news/news/press/2008/pr08085.html
They wrote:
JPMorgan Chase acquired the assets, assumed the qualified financial contracts and made a payment of $1.9 billion. Claims by equity, subordinated and senior debt holders were not acquired.
That can also easily be answered. The FDIC auctions are "first-price sealed-bid" auctions. Each bidder gets access to the virtual dataroom where all bidders can find the same information of the failed bank (list of assets, book values, premises and so on). All bidders can do the same DD and can make their bids. Only ONE SINGLE opportunity!
Search for "first-price sealed-bid auction": https://en.wikipedia.org/wiki/Auction
Or look here: http://www.econport.org/econport/request?page=man_auctions_firstpricesealed
JPM bid 1% of "All Deposits" as premium IMO, another bidder could have bid 2% which equals $3.76 bln. Another bidder could bid -1% which equals -$1.88 bln. and another bidder -3.00 bln. for example. The bid form requires parentheses for negative bids!
Since all bidders have to pay the same book value for the assets visible in the dataroom, and this bid amount is only a premium (if positive) or a discount (if negative) (I called it offset) which is applied against the paid book value, the FDIC then can choose the (for them) least costly bid. Easy!
The calculation of FDICs resolution costs can be found on page 9 to 11 (=PDF page 10 to 12)
https://www.fdic.gov/bank/analytical/cfr/2014/wp2014/WP_2014_04.pdf