Lovin' it !
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Just because TPG holds common shares does not make the common shares worth any more.
They converted their preferreds to commons in a last-ditch attempt to help WMI sell itself, but unfortunately WMI failed to do so.
WMI should have listened to Paulson.
If they get they $4 B back and proceed immediately with a reorg plan, it is game over for the commons AND likely the preferreds as well imo . If that happens, the bondholders win BIGTIME, which very well might explain why WMI bonds are trading higher than bonds of companies that aren't in bk.
Good luck !
"Ailing Washington Mutual Inc. moved into a better position to find a reprieve or rescue from its mounting loan problems Wednesday after a major investor removed a potential stumbling block to a sale or another infusion of capital.
The concession by the private equity group TPG came as government regulators tried to arrange a sale of the nation's largest thrift, reflecting their worries about another possible bank failure that would drain the already depleted Federal Deposit Insurance Corp.
TPG could have stymied that process because of protection that it got as part of a $7 billion investment made in April. A clause in its investment agreement could have required a buyer or another major investor to pay TPG hundreds of millions, if not billions, of dollars in addition to whatever money was injected into WaMu.
But TPG agreed to waive its anti-dilution clause, according to a Securities and Exchange Commission filing, potentially making it easier for WaMu to raise more money or for nervous banking regulators to push for a sale of the Seattle-based company.
"It became clear that it would be in the best interests of Washington Mutual and our investors to waive the ... provisions," Fort Worth-based TPG said in a statement. "Our goal is to maximize the bank's flexibility in this difficult market environment."
The government's efforts to find a buyer, though, are being complicated by uncertainty about the magnitude of losses still lurking in Washington Mutual's home loan portfolio.
"No one knows what's in their books," said a person briefed on the talks between regulators and banks. The person spoke Wednesday on the condition of anonymity because of the sensitivity on the matter.
Citing unidentified sources, the New York Post said the potential buyers include JPMorgan Chase & Co., Wells Fargo & Co., HSBC Holdings PLC.
The banks all declined to comment.
After losing $6.3 billion in the past three quarters, Washington Mutual believes it is slowly healing under a new chief executive, Alan Fishman, who will receive an $8 million bonus if he can keep the nation's largest thrift alive through 2009.
"I think people do know what is in our books and we've been pretty transparent," WaMu spokeswoman Olivia Riley said Wednesday, pointing to a financial update that the company released late last week. Those figures suggested WaMu's loan problems are becoming less severe compared to recent quarters, giving some analysts hope that the company can still be salvaged.
Nonetheless, analysts still expect the company to sustain a loss of about $1.8 billion in the current quarter ending Sept. 30. And investors are showing little confidence in WaMu. The company's shares fell 31 cents to $2.01 Wednesday, leaving the stock price with a decline of about 85 percent decline so far this year.
"Something needs to happen soon because WaMu is twisting in the wind," said Bert Ely, an Alexandria, Va. banking consultant. "It's a detrimental situation that has become corrosive to the franchise."
Assuming that Washington Mutual either can't find a buyer or doesn't want to be sold at the price being offered, the thrift could raise more money to fatten its cushion against the losses that are still expected to come.
In a Monday research note, Keefe, Bruyette & Woods analyst Frederick Cannon estimated Washington Mutual probably needs to raise at least $5 billion in additional capital to protect itself from upcoming losses. Cannon thinks Washington Mutual's credit costs could run as high as $28 billion through 2009. "
http://www.dallasnews.com/sharedcontent/dws/bus/stories/091808dnbuswamu.36a7fe7.html
"The TPG-led group paid $8.75 a share for stock and warrants potentially worth more than half the company. But WaMu shares have plunged further since then; they closed at $2.01 Wednesday.
TPG, which itself owns about 16 percent of WaMu, on Wednesday removed a big obstacle to any deal.
It waived an earlier agreement that, if WaMu sold more than $500 million of new stock — or the entire company — at a lower per-share price than what the TPG investors paid, WaMu would have to pay hundreds of millions of dollars as compensation."
"Yet another possibility: TPG and its partners could try to protect what's left of their $7.2 billion investment by kicking in more cash, or they could buy the rest of WaMu themselves — removing it from the scrutiny of the public markets and perhaps giving it more time to right itself."
http://seattletimes.nwsource.com/html/businesstechnology/2008187176_wamu180.html
18 September 2008 - The Wall Street Journal
TPG move opens doors for Washington Mutual
"Washington Mutual received a critical financial concession from its largest investor, setting the stage for the beleaguered thrift to raise more capital, divest branches or sell the entire thrift, according to people familiar with the situation.".......
"Those efforts moved forward yesterday when private equity firm TPG (formerly called Texas Pacific Group), which led a $7bn capital infusion into WaMu in April, let drop a provision that provided downside protection to its investment."
http://www.wealth-bulletin.com/home/content/2451865128/
They willfully gave up their "protected" status
a while ago.
If you see one of the articles below, you will read that TPG wrote down their investment and imo, they are just waiting to sell. There have been references in the court filings about the removal of restrictive legends recently, and imo, it is almost time for the shares that TPG does have left to maybe hit the market. You be the judge on that one because I can't predict the future.
I know that Toscafund sold out, and they were part of this same deal.
"Toscafund, the London-based hedge fund set up by Martin Hughes, a former executive at Tiger Management, is believed to be another big loser from the deal. The hedge fund revealed on July 31 that it had amassed 105 million shares in WaMu, amounting to a 6.1 per cent stake and making it the second-largest investor in the group. That holding, which was valued at $500 million on July 30, the day before Tosca’s share purchases came to light and boosted WaMu’s stock by 20 per cent, is now worthless. "
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4833529.ece
I believe they may have cost WMI some of their NOLs as indicated by a recent billing document.
Also, I find it odd that the # of shares that AF and VG have are just about equal to the # of shorts that were out there from the get-go. Probably just a coincidence though.
Here are some other articles about TPG and WaMu.
"Tuesday, April 8, 2008
Washington Mutual raises $7B from TPGDallas Business Journal"
http://dallas.bizjournals.com/dallas/stories/2008/04/07/daily15.html
"Untapped private equity could help banks recover"
Mon Jan 26, 2009 3:18pm EST
"Some private equity firms have already been burned by being too quick to invest in the banking sector, most notably Texas-based TPG, which lost $1.35 billion in an investment in Washington Mutual."
http://www.reuters.com/article/reutersEdge/idUSTRE50P6GJ20090126
"TPG writes down recent buyout fund by 29 pct -document
Wed Mar 18, 2009 9:43pm EDT"
http://www.reuters.com/article/rbssInvestmentServices/idUSN1830358020090319
"TPG had a total investment in WaMu of $1.35 billion but that was spread across three of its funds."
(from page 2 of that article)
"TPG to let clients cut funding pledges: source
Tue Dec 23, 2008 10:31am EST"
http://www.reuters.com/article/americasPrivateEquityNews/idUSTRE4BM0SR20081223
Debtors' Fourth Motion for Order Pursuant to Section 1121(d) of the Bankruptcy Code Extending Exclusive Periods for the Filing of a Chapter 11 Plan and Solicitation of
http://www.kccllc.net/documents/0812229/0812229091020000000000010.pdf
WMI has requested that the plan period be extended through and including January 19, 2010 and are also requesting that the solicitation period be extended through and including MARCH 22, 2010 .
Here are responses to those posts, with the exception of the middle one which doesn't even warrant a response (which I also never saw because I don't see "those" posts).
WMI is a tiny creditor of the bank.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=43321030
Reporters did, and still to this day, refer to Washington Mutual Inc as WAMU.
"In addition to asking Collyer to stay the Washington, D.C. litigation, WaMu's lawyers asked the judge Wednesday to dismiss counter-claims made by the FDIC."
"Lawyers for the FDIC argued that Collyer should not postpone her consideration of the case, and they asked her to dismiss most portions of WaMu's lawsuit."
http://online.wsj.com/article/BT-CO-20091104-721655.html
"Proof is in the pudding!"
Also, Bonderman never owned shares of WMB, and that is a FACT !!
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=43290968
So yes, imagine that, reporters got it wrong. Back then they referred to WMI as WaMu just like they are continuing to do today.
That's what I thought, but I just wanted to check.
Thanks.
Order Scheduling Omnibus Hearing Dates to be Held on January 20, 2010 at 3:00 p.m. (EST); February 22, 2010 at 3:00 p.m. (EST); and March 18, 2010 at 10:30 a.m. (EST)
http://www.kccllc.net/documents/0812229/0812229091104000000000002.pdf
There will be no reorg until all claims and other items are finalized, and if you look at the following document, you will see that WMI has requested that the plan period be extended through and including January 19, 2010 and are also requesting that the solicitation period be extended through and including MARCH 22, 2010
Debtors' Fourth Motion for Order Pursuant to Section 1121(d) of the Bankruptcy Code Extending Exclusive Periods for the Filing of a Chapter 11 Plan and Solicitation of
http://www.kccllc.net/documents/0812229/0812229091020000000000010.pdf
What happens if TPG doesn't get paid?
They could have purchased more shares before the filing of bk and before the trading order placed the restrictions on the amount of stock that could be acquired, but they didn't. Also, I would recommend reading the post below as it contradicts what many here believe to be true about the kinds of shares TPG had.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=43290646
In your opinion, would one of those options explain why WMI bonds are trading at close to $100 ?
Thanks.
"WMI will have to prove that the value of the banks was over and above the bank debts,in order to prove there was value to it's shares,of course . "
I agree.
"However WMI isn't suing on behalf of the bondholders and WMI will not be paying them. "
I agree.
"If successful WMI will ultimately/ inadvertently prove the bank bonds have value."
I agree.
"The FDICs deal with JPM made the bank bonds worth zero and the non publicly traded shares of the banks,which is what WMI owned, also worth zero. "
I agree.
"The bondholders can take the issue up with the FDIC/JPM,just as WMI currently is. "
I agree.
It's definitely just a matter of time, and there are definitely certain parties just waiting in the wings for the right time to get more involved.
imho yho is spot on, and hopefully your perspective will shed some light on some others.
Have a good night rattlewatch!
"Overall, not so impressive. The 10K of several months ago had 3 times as many listed. Notably missing is Second and Union LLC. which owns the WaMu tower. WMI must have transferred it to WMB at some point.
And don't get your hopes up about Providian -- it looks like the below covers only the credit card access website, not the card business itself. Cannot find much info about any of these on the web. Any ideas what they are and what they are worth? "
Now that is actual dd, unlike some people who just claim that WMI has MEGA BILLIONS in subs without actually doing any reasearch. The link you provided is only a partial link, but anyone who wants to find it knows where it is imo.
Also, marayatano was correct when she responded to you.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=43330903
So when is this going to dollarland ?
: ^ )
There are definitely several issues related to the solvency/insolvency, but I would like to clear one thing up.
TPG converted their WMI preferreds into WMI commons.
I don't know why people think that TPG had preferred shares in WMB. That simply isn't the case. TPG purchased WMI securities and not WMB securities.
WMI used the money from the sale of those shares to capitlize the bank, but that, in no way, means that those shares were preferred shares of the bank.
wamuq, wamkq, and wampq are indeed equity and IN FACT are not debt.
Also, the wamuq ibox states "The following screenshot is from WAMUQ Ch11 filing in Delaware. It shows that the company anticipates having enough funds available for
unsecured creditors, i.e Shareholders. " which is more than misleading as shareholders are NOT unsecured creditors.
If WMI gets their capital contributions "back", then that means they were insolvent.
If they were insolvent, then they would actually owe the bank billions and billions of dollars that the bank paid WMI in dividends that shouldn't have been paid out because of insolvency.
WMI will not get their capital contributions back.
Stick to whatever you'd like.
The bank was seized because of the outflow of deposits that put them in an "unsafe and unsound condition".
That's all that needs to be said about that as regulators can, and will, stand behind that.
Now people can try to claim that the seizure was illegal, but as far as the regulators ability to seize the bank, they had every right to do so.
FYI, the OTS seized the bank and placed it in the receivership of the FDIC.
That amount is not debt, and that is a claim to try and get capital contributions back, which they will not get because they were solvent.
If they weren't solvent, then they would get that money back but they would also be liable to give even more money than that back to the bank from dividends paid by the bank to WMI that should never have been paid if they were insolvent.
lose lose
win lose
WMI is a tiny creditor of the bank.
Thanks Dan. Sounds like that case is even more of a circus than the others.
You misinterpreted my post. I was referring to the shares of WMB, and yes, the shares of WMB are currently worthless and are NOT trading at .13 .
The shares that are trading at .13 are shares that represent a company that used to own a bank, a bank that had creditors, and those creditors of the bank come before the former "owners" of the bank.
"...along with fair value for its 100% share ownership of the banks. "
Creditors of the bank come before shareholders (aka "owners") of the bank.
Just like in this case, the creditors of WMI come before shareholders (aka "owners").
Until the bank creditors are paid, the shares in, and "ownership" of, the bank are completely worthless.
So who thinks the omnibus hearing scheduled for March 18, 2010 will be the last one?
Simply because the money is in a demand deposit account does not mean that the money should have been transferred there. Everybody knows that the money is in a dda, and nobody is arguing that it is not.
There will be discovery concerning the transfer of this money.
Logan's testimony was only the beginning.
Money and more money.
billable hours = $$$$$$$$$$$$
No decision will be made without actually gathering evidence and having a trial with full discovery.
Logan's testimony is not enough for Walrath to make a decision. WMI executives will be questioned during discovery before any decision is made.
Lawyers on both sides have had over a year to do this, but lawyers on both sides have chosen to draw this out for obvious reasons.
Reporters did, and still to this day, refer to Washington Mutual Inc as WAMU.
"In addition to asking Collyer to stay the Washington, D.C. litigation, WaMu's lawyers asked the judge Wednesday to dismiss counter-claims made by the FDIC."
"Lawyers for the FDIC argued that Collyer should not postpone her consideration of the case, and they asked her to dismiss most portions of WaMu's lawsuit."
http://online.wsj.com/article/BT-CO-20091104-721655.html
"Proof is in the pudding!"
Also, Bonderman never owned shares of WMB, and that is a FACT !!
Here's the deal.
Bonderman converted his preferred shares into commons to help WMI sell itself (yes , sell WMI, not WMB, WMI as in the whole package). By doing so, he gave up his make-whole provision which means he was willing to accept less than $9.25/share for WMI in its entirety. He did this because he knew WaMu was in trouble, and he atleast wanted to get something. By doing this, it was also like him saying that YES, the bank was worth less than $9.25 per share, because the bank didn't make up all of WMI's value.
$9.25 per share x 1.7 billion shares = $15,725,000,000.00
So, if Bonderman since Bonderman willing to give up his make-whole clause, he not only felt that WMI was worth less than $9.25/share, but he also felt that the bank was worth less than 9.25/share.
People can spin this situation however they'd like, but once the bank went into receivership, bidders were only bidding on WMB and not WMI. So if THJC decides that the BANK alone was worth $10 -12B (which is less than what Bonderman thought WMI in its entirety was worth), all of that money would go to the BANK CREDITORS (bond holders and noteholders of the BANK), and none of that money would go to WMI shareholders. WMI is a small creditor of WMB, per filings, so when more is paid for the bank, WMI will only see a small fraction of that money.
"...then, a division/allocation of assets can take place. "
Exactly, and any money that is paid for the bank goes to
THE BANK CREDITORS FIRST.
If THJC decides that the bank was actually worth 7 times the initial price of 1.888 B, then that money would go to the creditors of THE BANK.
The $1.888 billion, along with additional money that could be paid for the bank, goes to the BANK CREDITORS.
Do you actually think the $1.888 billion was supposed to go to WMI ?
Do a little research on receivership sometime.
I suggest you check your facts . The money will not be turned over to WMI.
One of the valid claims is regarding the Preferred Securities totalling $3.9 billion in value, and that alone is enough to prevent WMI from getting the cash.
I could list more, but that one alone is enough to set-off the money in the dda.
I suggest you read my post regarding set-off .
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=43255501
"In addition to the ownership of the funds, the bankruptcy court must also determine if claims by JPMorgan and the FDIC against Washington Mutual exceed the value of the disputed deposits."
http://www.reuters.com/article/etfNews/idUSN0512265520091105
Even if Walrath decides that the money in the dda is WMI's (which likely won't be ruled on until there is an actual trial with related discovery), that money will not be turned over to WMI if claims against WMI exceed the value of the deposits.
Got it?
Well, JPM had unclean hands in another case as well, and they didn't have to turn over $16B + in cash because of claims against that estate, and don't forget that WMI doesn't exactly have clean hands either. A different Federal Judge refused to drop former WMI executives from a lawsuit in another case, so I am not convinced that the cleanliness of hands is entirely relevant.
If CHBO was smart, they would have spent the entire day yesterday fast-tracking the necessary paperwork to issue additional shares to dump on people that actually believe they are worth $2.70+ per share.
Unbelievable!
That is correct, he hasn't said a word yet, and it is my understanding that he actually doesn't have to.
They haven't been shot down by Sleet yet.
We'll see if he wants to ruin the Lady Judges' Stew.
Highly doubtful, but possible, especially if he is in the pocket of you-know-who.
Order Scheduling Omnibus Hearing Dates to be Held on January 20, 2010 at 3:00 p.m. (EST); February 22, 2010 at 3:00 p.m. (EST); and March 18, 2010 at 10:30 a.m. (EST)
http://www.kccllc.net/documents/0812229/0812229091104000000000002.pdf
These will more than likely "string this out past Nov. 24" .
Sticky?
"..."YEARS" ?? "
Yes, YEARS.
"the LONGER JPIG/FDIC play the MORE loot WAMU'S GREAT LEGAL TEAM GETS..... "
That is correct. That is the name of the game, which is exactly why lawyers on both sides will draw this out as long as humanly possible.