Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
AZ, when is the semiannual distribution for class 17? Do you know if they normally issue a statement before the distribition or it just happens on that date?
LG, I dont want to jinx it but I think you may be right. I think its settlement. I dont think the filing will be this late. So no filing = settlement...hopefully
RD, I dont want to jinx it but I could really use some holiday cheers right about now...
Didnt she pretty much tell them that at the last meeting? Didnt she basically tell the EC attorneys to not even think about golden parachute claims and just hope for at best for their attorney fees?
Matt, I think the attorney fees submission is a good sign..especially if the judge ordered it. It might indicate closure of employee claims. I hope Walrath can find the authority to grant the attorney fees and deep six this for good by the end of this week.
AZ, if PIERS are truly not allowed into the $66.5M creditor cash pool, then why didnt WMILT distribute the $0.5 million left in LTI pool years ago and be done with Tranche4?
I am confused about this claim of yours. Why dispute over the $66.5M creditor cash pool with the employees, if Tranche 4 is limited to LTI pool. Why didnt they just distribute the last remaining bit of LTI years ago?
Wow, wouldnt it be nice if escrow got paid this month? We can buy low into this market correction. Would be poetic justice for all of us who have been denied justice for 10 years.
AZ, so you are still hopeful this can move forward in time for the Class 17 distribution this month?
I think Wall Street is sending a message to the Feds to stop raising rates. Maybe the whole selloff is coordinated by the big funds to scare the Feds going into this weeks meeting.
LG, I'm hoping for a settlement also but what I fear is that EC will still need to provide evidence to the judge that attorney fees are allowed regardless of the golden parachute claim prohibition by FDIC.
So what I fear is WMILT may not have the legal authority to settle even for a much smaller amount of attorney fees. What I'm afraid of is EC will just go back and forth with WMILT until Judge Walrath shoots this back to FDIC court. Then more delays...
Thanks Ron, so if the carve out of the DCR is small enough due to attorney fees only allowance then there is still a chance that we move forward before year end correct?
So why do you suppose they WMILT releases that statement with regards to March? Are they implying that Walrath will likely not approve a smaller carve out of the DCR on the 19th?
Ron, is the Dec 19 court date still on schedule. Sorry, I have been away from the board for a few weeks. Just catching up. I read some mentioning of a delay until March?
So is Dec 19 court date still on for Judge Walrath decision to finalize the employee claims before year end or is there a new court date in March?
Is there a court date on Dec 3? or is Rosen just required to submit that redacted FDIC document by then? Anyone know?
TIA
Sam, your advice is dead on. Everyone who gets a life changing windfall from this Big Long speculation should sit tight for 6 months and not do anything.
I've heard this advice before from a few other mentors in my life. This is very sound advice ..
Sit tight for 6 months after windfall!
RD, I think you nailed it. I think DB probate finale last Dec is the key. There may be a 1 year distribution deadline requirement for class 17 and thats why Rosen is rushing to pay off PIERS so that safe harbor can be released for class 17 distribution.
I hope AZ can one day post something like...
"I got money!!" for his class 17 ownership
Here's a good article on bankruptcy remote assets (our loan portfolio in safe harbor).
https://www.lendinglawreport.com/2015/02/articles/bankruptcy/the-not-so-remote-possibility-of-the-bankruptcy-of-a-bankruptcy-remote-entity/
The creditors of our loan portfolio (i.e. Wamu deposit base and class 17 WMB bondholders) would have demanded the loans be placed in an bankruptcy remote SPV entity to separate the risk of the operating bank from the performance of the loans.
Now if you believe Wamu corporate attorneys were not idiots, they would have also securitized and placed the WMI beneficiary interest (2.9% profit margin on the loans) in the same bankruptcy remote entity. If you believe otherwise, then you should forget escrow and go live your life because there will be nothing left for escrow.
However, if you believe WMI beneficiary interests (2.9% profit margin on $300B loans) were also placed in the same bankruptcy remote SPV entities then keep reading the linked article above.
Notice towards the end of the article it says...
Once the assets of a bankruptcy remote entity are within the jurisdiction of the bankruptcy court, the bankruptcy court can authorize the sale of the lender’s collateral under section 363 of the Bankruptcy Code, free and clear of the lender’s liens.
Basically, Rosen can legally deny all he wants of safe harbored assets because they are bankruptcy remote in SPV entities....until the assets falls within the jurisdiction of the bankruptcy court. When does that happen? I'm assuming when all the creditors of WMI has been paid off. So according to this article, we should be able to ask Rosen about our bankruptcy remote (safe harbored) assets once PIERS is paid off. I dont think he can legally deny the assets then.
Samurai, yes, FDIC is responsible for class 17, WMB bonds, but I believe the funds to pay them is also stuck in safe harbor along with the rest belonging to WMI.
Sound, did you call TD to verify this is a new note?
Is there a class 17 distribution deadline in Dec 2018?
We know DB exited their probate at end of Dec 2017.
We know JPM got paid $650M immediately after the put pack claims settlement with DB...but not a single cent has yet to be distributed to class 17...
Could it be because the source of class 17 funds is part of safe harbor? Hence they cant technically distribute until the last creditor class (PIERS) has been taken care off.
Is the reason Rosen is rushing because there is some sort of 1 year time limit requirement from end of DB probate to distribution to class 17?
Thanks Az, btw, what do you think about Rosen's sudden rush to distribute? I know you have some class 17 and those are yet to receive any distribution eventhough DB probate ended in Dec 2017 and JPM already got their $650M.
Do you think there is some sort of 1 year deadline from DB probate to distribution date? Is there some sort of time limit on safe harbor assets that is compelling Rosen to rush?
Any thoughts?
Thanks distro. Its a very weird bug that only affects COOP ticker in the app.
Also, I dont think Rosen is rushing out of the goodness of his heart to get us $40mil to escrow.
Maybe there is a critical Dec 2018 distribution deadline for safe harbor assets?
Remember, DB probate ended Dec 2017.
Maybe there is a 1 year deadline requirement for distribution??
Anyone having problem loadin COOP ticker into TD Ameritrade Android App? Everytime I click on that ticker in my app, the app would freeze. It has been like that since day one of ticker change from Wmih to Coop. But before, it would load up during market hours and freeze after market. Now its freezing at all hours. Anyone having this problem?
General, its even better than that. Years ago when I did some research on safe harbor, I found old Wamu documents on safe harbor agreements going back to 2003 if I recall. So it was normal business all along to protect the rights to the profit margin on their loans in the holding company. In my opinion, that was the only way to raise $20B from class 17 and 19. If you recall, Wamu was already in trouble in early 2007, so why would TPS lend billions of dollar in the summer of 2007 without any kind of collateral that would be protected in safe harbor in case of bank failure.
Ok, so your beef with me is that you believe the parent corp (WMI) only kept a smaller portion of the rights to that 2.9% profit margin on $300B portfolio and the rest were kept under WMB. Wheras, I believe it was mostly kept under the parent holding corp.
Ok here are my arguments for why I believe its mostly under the parent corp.
1) future rights to the 2.9% profit margin portfolio does not do anything for bank capitalization purposes..so it was pointless to keep those securities under WMB. if CBA09 was still on this board he will testify to that
2) I believe the original WMI mark to market estimate of its assets at time of seizure was $34B assets with $8B liability. They never accounted for most of that $34B. Most of $8B liability was paid off with tax refunds and cash on hand. So, I say most of that $34B (lets say $30B) was bankruptcy remote and hence must be the value of the profit margin on the loan portfolio in safe harbor.
So now the question is why that 2.9% interest profit margin on $300B portfolio was only booked at $30B and not like $86B in 2007.
Answer: Mark to Market
The $30B was probably the liquidation mark to market value of the rights to that 2.9% profit margin on the day of the bank takeover in Sept 2007 -- as you recall in a very depressed market.
Also, if you were to liquidate all those securitized rights to the profit margin (ABS/MBS) you will not get the true run off value of the life of the portfolio (greater than 10 years). It would be discounted and you will only get a portion of the life of the portfolio. Additionally, in a depressed market like 2007, it will be heavily discounted.
So after 10 years in safe harbor run off mode, with the economy not having collapsed, that $30B marked to market value of the portfolio in 2007 is probably worth more like $80B today.
It is not inconceivable. It is probable.
Nothing false about Wamu owning 2.9% profit margin on $300B portfolio. Clearly stated on top of 2007 10K.
The only argument here should be whether that 2.9% profit margin was somehow protected by clever Wamu attorneys under the WMI "holding" company or they let it be seized and given away to JPM for $1.8B and no constitutional illegal taking lawsuits by bondholders who are $20B in the hole.
I am a speculator I choose to believe the former because it doesnt involve any conspiracies of FDIC gifting away Wamu to JPM for measly $1.8B.
If you believe in the latter then good luck on living life with no hope.
Wamu owned 2.9% profit margin on $300B loans otherwise it would be illegal to state that net interest income on top of their 2007 10k.
Yes, they packaged more than $2T in loans over the previous decade and most were sold to other investors but they kept 2.9% on $300B. Its stated clearly as net interest income on top of their 2007 10k. They werent stating the net interest income of $2T for other investors. It was Wamu 10k. not 10k of outside investors.
Additionally, 2.9% on $2T will be more like $58B and Wamu 2007 10k clearly did not state $58B net interest income.
Dr. A was no fool. Wamu wasnt great because of office towers, mineral rights, or their "wahoo" trademark slogan. Wamu was great because it retained a very fat 2.9% profit margin on a $300B portfolio with only $16B subprime loans.
Dr. A did not come up with $86B value because of office towers, wahoo branches, or mineral rights
The $300B loans dont have infinite life. Its essentially the profit margin on theoretical payoff value minus some margin for early loan termination.
The 2.9% profit margin on the payoff value of the $300B portfolio is somewhere between $80B and $140B in my original estimate...which happened to match the $86B estimate by Dr. A in court...which gave me confidence on going "all in" back then.
Btw, I'm not claiming hundres of billions "pie in the sky". I'm just explaining how the $86B estimate by Dr. A court testimony is possible.
Its very simple and you dont need to go into too much details. You'll have to have faith in just one speculation.
WMI attorneys were smart enough to legally isolate the rights to the 2.9% profit margin of the $300B loan portfolio under the parent holding company..such that it would be shielded in safe harbor by prearranged safe harbor rules with FDIC from years ago in case of bank seizure.
If you believe in that 2.9% profit margin on the loans have been shielded in safe harbor then you can easily arrive at the $86B estimate by Dr. A
Yes and no. Its the way the accounting is done. I'm not CBA09 so I dont have the expertise to explain the exact mechanism to you. The 2.9% profit margin would have been packaged into some form of securitized assets like MBS and held under the holding corp. The main portfolio loans could have been held under WMB to offset the deposit base cost liability.
If you belief the beneficiary interest to the 2.9% profit margin went along with WMB to JPM as part of the $1.8B sale then you shouldnt waste your time on this board. You shouldnt expect anything returning to the estate from safe harbor.
I admit I'm not an insider but simply a speculator. I've explain to you my speculation and thats why I'm here. Why are you here? Are you expecting JPM to make additional payment to FDIC-R for the 2008 purchase?
FACT: FDIC couldnt seize holding company (WMI) assets back in 2008. JPM stated that they didnt buy any assets belonging to WMI. Also, thats why they changed the law in 2010 so that in the future they could seize holding company assets.
Speculation: Which of the following is more probable?
A: The securitized rights (i.e. MBS) to the 2.9% interest profit margin to the $300B loan portfolio was held under the parent holding company (WMI) for 1) to protect it from potential bank (WMB) seizure and 2) because holding those securities under WMB dont do anything for bank cash capitalization purposes..so it was pointless to hold them under WMB
B: WMI corporate attorneys are a bunch of dumb asses and held the securitied rights (i.e. MBS) to the 2.9% interest profit margin to the $300B loan portfolio under WMB, because they didnt understand the liability separation and protective concept of a "holding" company such as WMI.
Which do you think is more likely? A or B.
If you pick A, congratultions!! You have been sitting on a once in a life time lottery ticket.
Bonus Hint: How do you think Dr. A arrived at the $86B value in court testimony?
Yes and no. See my post again. The principal assets plus some interest cost went to JPM because that is the cost of the deposit base. The securitized rights to the profit margin of the portfolio is sitting under WMI..not WMB.
If FDIC sold the rights to the 2.9% profit margin to the portfolio to JPM for $1.8B, there would be lawsuits for illegal taking. Also, WMI BOD would have been sued by shareholders for stupidity for holding those seecurities under WMB and not in the "holding" company of WMI.
I disagree, if you look at the 10k there is a separate listing for loans for sale (I recall around $30B??). These would be the ones sitting under WMB. So those could have potentially gone with WMB to JPM. The rest of around $300B portfolio should be sitting under WMI and those would have gone into safe harbor.
When I say $300B, I dont mean the ownership of the principal value of $300B. I mean the securitized rights (i.e. MBS) of around 2.9% interest profit margin on that $300B that generates about $8B income per year. That principal plus some interest cost goes back to JPM to pay back the deposit base that went with WMB.
But the 2.9% profit margin is our crown jewel that belonged to WMI...and protected by safe harbor...and generating lots of posits every year we get delayed.
AZ, Judge Walrath's 1 Posit ($10B) for common is actually quite accurate for circa 2012. If you look at the wamu 2007 10k it states total loan portfolio interest income around $8B per year. So around end of 2012, it would have earned about $32B in safe harbor. If you subtract $20B owed to class 17 and 19, you'll have about $10B left for common plus future income value of left over loan portfolio at end of 2012.
However, since this thing has dragged into end of 2018, today, we probably have closer to $80B collected in safe harbor plus future earning value of whatever loans left.
So your $8 per common is conservative based on earnings as of 2012. I dont want to get our hopes high but there is a likely chance we are looking at much higher returns for common -- well north of $30 per common if your 75/25 theory holds true.
Dmd, it started out as a creditor claim and not equity. So I would imagine the estate in granting class 19 escrow would give them a return sufficient for a creditor...so multiple returns of 3x or more would seem unreasonable for a creditor claim.
DM I think its a significant clue to the 75/25 deb
ate
LG, I really dont have the legal expertise to argue one way or the other for the 75/25 to the end argument for the preferreds.
I just picked up on the $96mil claim that Dmd was referring to where they were awarded class 19 escrow. Based on that award amount, if you assume 75/25 to the end and say the final safe harbor return ends up around $50B, that $96mil claim would be awarded $350 mil and that seems excessive. But if you assume the preferreds get face plus accrued interest, they will receive around $70mil plus accrued interest, which would bring them very close to the original $96mil.
So just based on that analysis, I think AZ's thesis on the 75/25 to the end argument might be highly probably.
Again, I'm not making any legal arguments based on any POR7 documentations, just based on that award size by the estate. And I'm sure the estate had a pretty good idea of what was in safe harbor back in 2012..
Actually face plus accrued interest for class 19 will return just a little over the original $96 mil claim so your thesis seems to be highly probable based on this class 19 escrow award for the $96 mil claim.
DMD, this may imply that class 19 returns will be limited to face value plus accrued interest. Otherwise the 75/25 to the end dustribution will award the $96 mil original claim with too many multiples.