is making moves.
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That was for the savings plan...no settlement news yet, buddy...lol.
The last docket number i'm showing in 08-12229 is #1283.
If Dimon allows JPM to proceed into discovery, JPM will lose all bargaining power in settlement talks -- especially if WMI finds the smoking gun necessary to ensure victory in the trial phase. Why settle for a "mere" $40-50B when the jury will likely award a hefty $150-170B?
I hope his ego doesn't cloud his business judgment. Dimon is a brilliant banker and he's come a long way from being Sandy Weil's protoge. I honestly believe he is going to settle this when JPM has exercised every alternative in its arsenal to avoid discovery.
Neither do I, which I why I stated that cash is king. I would be very happy with a straight cash buyout so I can move on with my life and invest in other things.
JPM's Background Activity -- I think JPM wants to have as much cash on hand as possible for a potential acquisition (umm, WAMU) in the near future. The warrants are an obligation, but if the government auctions them, JPM won't have to use cash...on the contrary, they'll just have to issue more shares and dilute their own PPS. I'm doubting there will be a conversion now...cash is king and WMI shareholders don't take credit, lol.
JPMorgan asks Treasury to auction warrants
Fri Jul 10, 2009 8:45am EDT
* Bank says fully supports Treasury Department process
* Auction would set market price for warrants
* JPMorgan shares down 1 percent in premarket trade
NEW YORK, July 10 (Reuters) - JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) has asked the U.S. Treasury to auction stock warrants the bank issued when it received $25 billion of federal bailout money, after failing to reach agreement on what the warrants are worth.
The second-largest U.S. bank last month repaid the $25 billion taken from the Troubled Asset Relief Program. Like other lenders that repaid TARP funds, JPMorgan had been looking to get out from under restrictions on executive pay that came with the money.
A spokesman for JPMorgan, Joseph Evangelisti, said of the proposed auction, "This action is consistent with the Treasury's process, which we fully support, and it will result in the true market price for the warrants."
Under the bailout plan, banks can buy back the warrants if they agree with the Treasury Department on a fair market value for them. Otherwise, Treasury can sell the warrants to the highest bidder through an auction process.
If the warrants were auctioned and ultimately exercised, it would result in the issuance of more JPMorgan common shares, diluting the holdings of present shareholders.
On the other hand, if JPMorgan were to repurchase the warrants, that cost would reduce earnings.
JPMorgan shares fell 1 percent to $33.30 in premarket trading. (Reporting by Elinor Comlay; editing by John Wallace)
Yes, but alot of the time it's paralegals and law clerks handling the filings and boilerplate documents, like notices.
I've seen some pretty egregious errors in my time and i'm just a law student who works at a law firm by day.
I don't think JPM will have many options left to exercise after the motion for reconsideration is denied and the $4B is returned to WMI. The next thing I expect them to do is file a motion for leave to appeal, which will surely be denied as a matter of law. I don't suspect they will proceed with litigation, because it'll surely be suicide and a really poor display of business judgment.
My only question is whether all of the foregoing can happen and lead to a settlement before the end of the summer.
I wish I could use the low PPS to my advantage and average down a bit, but i'm strapped for cash right now and money is tight.
That's a typo...the document includes Jolantyna's affidavit of service on JPM, so the subpoena was served on JPM.
I think that may be possible. She may have "so ordered" WMI's proposed order today and we're just waiting for the clerk to file it.
Same here, my friend. I'm 318,000 shares deep and praying for this to be the move of a lifetime.
I can't host it anywhere...if someone here can, I will email it.
PACER UPDATE!! - We just filed a Notice of Subpoena for Rule 2004 Examination on JPM.
Refer to Document No. 1279 on PACER (08-12229).
The MM manipulation is beyond frustrating, but keep your eyes on the prize, ladies and gentlemen.
I totally understand your point now and I agree, it would have increased the likelihood of liquidity issues.
Thanks for the clarification, it was very much appreciated!
SS, that was a very well articulated analysis.
The only thing I might disagree with is when you stated it, "would have been unfair to their Bank's customers and would have worsened their only potential problem: liquidity. Instead of the famous 16B deposit run, it would have been a 20B run. It seems to me they did the right thing for their customers.. keep the cash in their bank."
Correct me if i'm wrong, but the $4B belonged to WMI - not WMB - therefore, it would logically follow that the money did not belong to the bank's customers either. Accordingly, if seizure was imminent and expected - as JPM states in it's answer - then WMI had a right to move its own cash so it wouldn't be seized along with WMB assets. This transfer would represent a deposit liability for WMB and an asset for WMI. I think this is the essence of WMI's claim.
Anytime!
I saw that too..
What would cause such a huge jump? Could news have leaked out?
No. She denied WMI's motion for reconsideration on her order granting JPM and extension of time to respond to WMI's motion for summary judgment. There is still no decision on JPM's motion for reconsideration (Index No. 08-12229).
The Order you're referring to was issued in a different adversary proceeding (Index No. 09-50934).
Now if we could just get another order from Judge Walrath denying JPM's Motion for Reconsideration and directing JPM to produce docs within 30 days as per WAMU's opposition papers - then we'll have something to celebrate over.
Oh, and the $4B would be nice too.
This is an excellent point. It indicates that the shorts are being covered in anticipation of upward movement in the near future. Once shorts are covered, I think we'll see the stock gradually rise in proportion with its true intrinsic value until the parties settle and the PPS presumably explodes.
There are only so many delay tactics left - i.e., motion for leave to appeal, which will surely be denied. After that, they are headed straight for discovery.
If JPM/FDIC so much as tries to cause delays vis-a-vis more frivolous motions, they will subject themselves to FRCP Rule 11 Santions and Motions by WMI to Compel. I'm not worried. Once we get through the motion for reconsideration and any motion for leave to appeal, we're set and it's only a matter of time before they settle with WMI or allow the skeletons to pour out of their closets.
Thanks for the link!
I noticed that WAMU is planning on filing its opposition to the motion in the coming weeks -- hopefully Judge Walrath won't let it get that far and she'll deny the motion without an exchange of briefs or a hearing on the matter. Given the slow pace of things lately, I doubt that'll happen.
As expected, JPM will be filing a motion for leave to appeal, which will surely be denied as well and cause further delay. However, I think this is the last delay tactic JPM will have up it's sleeve. After this is denied, it will be bound to comply with discovery.. unless, of course, JPM chooses to settle.
It seems as though JPM will lose all of it's bargaining power in the settlement proceedings if it waits until then to settle. JPM won't have any more tactics to execute and it will have already materially delayed the proceedings. My guess is that Weil has already give JPM a settlement amount - which JPM refuses to agree on. After it's antics in court fail miserably, it'll be left with no choice but to take it. (assuming Weil doesn't up the ante even further given the proximity to open and infinite discovery, of course)
Like most of us, I hope this settles quick. I want to enjoy at least some of this summer without the anxiety I've experienced until now.
I agree. I can't understand why JPM is using these antics to delay things. Just settle the case and get it overwith so we can all go home and move on with our lives.
I don't think it's great news - because it only delays the prospect of settlement even further, but I don't think it's bad news either - because JPM's arguments have no merit.
I expected JPM's stall tactics after last week. Judge Walrath will see this for what it is and nothing more.
I think so..
From what I read thus far, they're claiming that the R.2004 discovery is improper because WAMU filed counterclaims against JPM. In it's brief, JPM categorizes WAMU's counterclaims as "other proceedings" for the purposes of arguing that the R.2004 discovery is improper.
I may still be in law school, but I think JPM's logic is flawed because an "issue" should not be mistaken with an "action" or a "proceeding." I believe the federal rules of joinder (of claims, not parties) required WMI to assert their counterclaims because they were relevant to the proceeding initiated by JPM. WAMU did not file another, separate adversary proceeding. It merely filed counterclaims within the same proceeding. For those reasons, I think JPM's logic is facially flawed and this is merely an attempt to drag this action out and stall even longer.
JPM is stalling -- it filed a motion for reconsideration of Judge Walrath's decision regarding Rule 2004 discovery last night. See document #1237 on PACER.
They're dragging this thing out. The hearing isn't until 07/27. Something tells me we're not going to see a settlement come anytime before that (or anytime this summer, for that matter).
Thanks John, very much appreciated.
FYI, the terms for the management executives would have to change if WMI was acquired by JPM. IMO, this is consistent with the notion of settlement -- especially since we know they plan to emerge in 3Q and they're doing away with the board of director committees.
Read my last post on the two possibilities. I think this is good.
The market didn't tell us that Judge Walrath granted our Rule 2004 Motion or that she denied JPM's Motion to Dismiss.
Who knows. At this point, anything is possible.
Thanks!
That's a good question and I'm honestly not sure. I've never been in this position before.
These board of director committees are necessary for compliance and corporate governance. If they are dissolved (because they're no longer needed, as the 8k says), it yields one of two possibilities: (1.) that WMI will not be conducting corporate business going forward; or (2.) that WMI will exist (likely via acquisition) within another company (likely JPM) and it's respective board/committees going forward.
Since WMI has stated that it expects to restructure and emerge from bankruptcy in 3Q, the first scenario runs contrary to such a claim. Moreover, with the pursuit of litigation and the onset of recent success with the R.2004 discovery and high likelihood of the $4B being returned, there is no reason for which the first scenario should play out.
Accordingly, the second scenario -- a settlement/buyout -- seems to be the most logical deduction we can make from the statements made in the 8k.
I don't think there will be a "halt" per say. If the settlement/buyout does occur over the weekend, I just think the market will open up on Monday and we will be unable to trade.
It is very possible that JPM will make a move after the market closes today -- and as Billiam stated earlier, this would be a great time to do it. If you look back to JPM's recent settlement with WMI over the employee savings plan, it was filed last friday, June 19th, after the market closed. Accordingly, I see no reason why nothing would happen after 4PM today.
Right on, Billiam_2...very well said!!
It was a rhetorical question.
There is no reason for WMI to do away with any board committees if they plan to reorganize and emerge out of bankruptcy by 3Q. Thus, the inference he (and many of us) made is that WMI will not need the committees because it may exist and function under the JPM umbrella in 3Q by virtue of a settlement/acquisition.
We've discussed how the Rule 2004 discovery can encourage JPM to settle soon (especially given the likelihood that an interlocutory appeal will be denied), but has anyone considered the fact that it might also encourage the FDIC to join in quick settlement?
It's pretty likely that our attorneys will uncover evidence implicating the FDIC in fraudulent behavior if the said behavior is linked to JPM and arises within the scope of discovery. I think a dead givaway would be if the FDIC submits memos in support of JPM's Motion for Leave to Appeal (if and when such appeal is filed).
If so, perhaps we ARE looking at settlement in the imminent future.
lol, yeah, I was away from home/computer all weekend and quick to jump the gun on Monday morning.
My pleasure and many thanks for the acknowledgment. I hope we see a really happy ending to this soon enough.
We know that she denied JPM's motion, so therefore we know it's not theirs. We also know that she was going to "decide" on the $4B by or before today - to me that means she was going to either grant JPM's motion to dismiss or WAMU's request for summary judgment (within WMI's opposition papers). We know the former is out of the question, but there is no mention of the latter. My guess is the $4B is ours.
Here's the text:
Delaware judge retains control over WaMu dispute[/B]
"Delaware bankruptcy judge denies motion transfer WaMu-JPMorgan dispute"
By Randall Chase, AP Business Writer
On Wednesday June 24, 2009, 3:49 pm EDT
WILMINGTON, Del. (AP) -- A Delaware bankruptcy judge on Wednesday refused to cede control over a dispute between Washington Mutual Inc. and JPMorgan Chase & Co. involving billions of dollars in bank assets.
Judge Mary Walrath denied requests by the Federal Deposit Insurance Corp. and JPMorgan to stay two adversary proceedings in Washington Mutual's Chapter 11 case, or to transfer the dispute to a federal district court in Washington, D.C., where Washington Mutual has sued the FDIC.
"I do have exclusive jurisdiction to decide what is property of the estate," the judge said.
Walrath also denied JPMorgan's motion to dismiss a complaint in which Washington Mutual seeks to force JPMorgan to turn over more than $4 billion in deposits.
Lawyers for the FDIC immediately asked Walrath to certify her ruling on their motion for appeal. She declined to do so but said she would accept briefs from the FDIC and WaMu on the request for an appeal.
The FDIC seized the banking assets of Seattle-based Washington Mutual last year, then immediately sold them to JPMorgan for $1.9 billion, a price that WaMu claims was much too low.
Washington Mutual filed a lawsuit against the FDIC in March in U.S. District Court in Washington, D.C., arguing that if WaMu's assets had been liquidated properly by the FDIC in receivership, they would have been worth more than $1.9 billion. The lawsuit also argues that the FDIC improperly denied Washington Mutual's proof of claims.
In a separate lawsuit that is part of the Delaware bankruptcy case, Washington Mutual claims that JPMorgan has refused to turn over billions of dollars in deposits that are part of its bankruptcy estate. JPMorgan has filed a countersuit claiming the money was included in the assets sold to it by the FDIC.
Thomas Califano, an attorney for the FDIC, argued Wednesday that federal law limits jurisdiction regarding assets in which the FDIC, as receiver of a failed financial institution, claims ownership interest to the district court in Washington or the district in which the failed institution is located.
Califano said that under the purchase agreement with JPMorgan, the FDIC has the power to direct JPMorgan to withhold payments of deposits until the respective rights are determined. He also said the FDIC may have potential setoff rights regarding some of the assets in question.
"They're not being denied their day in court," Califano said in response to WaMu's objections. "What we're asking is that they litigate these issues in the district court as opposed to litigate the issues here."
"There are some very significant policy concerns here," he added.
But Michael Carlinsky, an attorney for Washington Mutual, argued that the FDIC no longer has a claim because, as receiver, it already has sold Washington Mutual's banking assets to JPMorgan, which is not in receivership.
Carlinsky said the core issue is ownership of the deposit accounts, an issue that is for the bankruptcy court to decide.
"We belong here; this court has exclusive jurisdiction over the assets," he argued.
Attorneys representing Washington Mutual's creditors committee, as well as noteholders holding more than $3 billion in debt, also urged the court not to give up its authority to determine what assets are part of a bankruptcy estate.
"The court should not give it up lightly, or at all, just because the FDIC says you should," said David Stratton, an attorney for the creditors committee.
Link:
http://finance.yahoo.com/news/Delaware-judge-retains-apf-1270516254.html?x=0&.v=3
As per the article I just posted, Judge Walrath denied JPM's motion to dismiss (on the $4B). Assuming that she granted WMI summary judgment on the issue as it requested on its opposition papers, then I would say she ruled in favor of us.
http://www.google.com/hostednews/ap/article/ALeqM5iCSHGJJRrVKHPDKgup2TV9yM5hhwD9917FPG3
Walrath denied JPM's Motion to Dismiss -- no news as to whether she granted the summary judgment sought by WMI in it's opposition papers though. This is VERY good news.
See below:
From Reuters (Courtesy of Yahoo! Forums Poster)
WILMINGTON, Del. (AP) -- A Delaware bankruptcy judge has refused to cede control over a dispute between Washington Mutual Inc. and JPMorgan Chase & Co. involving billions of dollars in bank assets.
Judge Mary Walrath on Wednesday denied requests by the Federal Deposit Insurance Corp. and JPMorgan to stay two adversary proceedings in Washington Mutual's Chapter 11 case, or to transfer the dispute to a federal district court in Washington, D.C., where Washington Mutual has sued the FDIC.
The judge also denied JPMorgan's motion to dismiss Washington Mutual's complaint that seeks to force JPMorgan to turn over more than $4 billion in deposits.
The FDIC seized the banking assets of Washington Mutual last year, then immediately sold them to JPMorgan for $1.9 billion.
Appeals are great. They are decided as a matter of law, not fact. If JPM's "stipulation" is on the record, it's doomed to fail the appeal process.
I think they're navigating a big ship into dangerous waters if they continue proceeding forward with litigation. Discovery is going to mark an iceberg in their path -- and I think that's the smoking gun that Judge Walrath has at her disposal right now since the parties already exchanged briefs and held oral argument in May. That decision can come down at any time.
I must have overestimated JPM in thinking it would see settlement as the best cost avoider -- makes good legal and business sense.