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AZ, do you know the procedure for payout of these ABS trust returns after WMILT "close remaining cases"? After WMILT pays out 75/25 of the last $40 mil, what will they do? Are they simply going to declare "we have to remain open to act as pass through entity for the returning bankruptcy remote assets"? or will they simply close shop and cancel the escrow markers and every class is on its own to go claim the bankruptcy remote assets in "Lost and Found"?
ThanksAZ for the update on your tracking on these ABS trusts. If they are all making monthly distribution then who is the trustee for WMI estate that is holding the funds for us? FDIC? A&M?
AZ, do you know who the trustees are right now? Who is making sure the trustees will perform their duties? I'm afraid there will be no recourse for trustee corruption.
Mutual Funds arent allowed to buy bankrupt stocks but speculative hedge funds can. Thats why funds like Appaloosa and Greywolf owns a shit ton of preferreds. They thought they could push out commons and get the entire estate. Notice they werent buying the higher class bonds. They knew where the hidden piggy bank was and they were buying what they thought would have been the surviving equity class - preferreds.
Also, not many in 2008 thought the US economy was going to survive and the loans were not going to go into default. Remember, at one point MBS were selling for 20 cents on the dollar. Not many were convinced that the WMu portfolio would continually perform and earn 2.9% margin for the next 10 years. But here we are...after 10 years..with the best performing economy in decades!
The biggest hidden treasure in this balance sheet is not simply (asset - liability) but the interest profit margin (asset interest income rate - liability interest owed). Wamu interest margin on its loans was 2.9% as of the last 2007 10k that it filed. This 2.9% interest margin wont show up on the balance sheet in 2008 when the WMB was seized. So the bankruptcy remote (safe harbored) piggy bank not only contains the net asset on balance sheet in 2008 but also the 2.9% annual interest it has been collecting for 10 years on the entire asset (not just the net asset).
Thats why Dr. A's $86 B estimate is not only feasible but a conservative estimate. IMO, $100B is possible.
LG, my other speculation is the issuing of the remaining of 3.5 billion authorized shares. If the reverse share split happens with the current share count, it will result in about 100 million shares float after the RS...Imo, this will result in extremely low trading volume and hence lower liquidity in the stock. Thats why I think they will issue the remaining authorized shares maybe in a s4v exchange so that we end up with about 300 million shares after the 12 for 1 RS. That should maintain liquidity in the stock.
LG, are you seeing the extemely low volume today? plus the 30% drop in short interest on the last report? I think you may be right. We may see something big before the RS and prior to the next short interest report next week.
Wamu only had about 16 Bil in subprime and zero CDS. Did you know that their loan portfolio had a 2.9% profit margin? The only reason Wamu was seized was because they threatened all the other banks by being able to raise more cash to meet their liquidity crunch. FDIC feared Wamu selling their MBS in an illiquid market that might have resulted in systematic acceleration of mark to market losses for everyone else. Thats why after Fisher sent that infamous letter of "how we will raise more cash" to FDIC, they immediately took over the bank.
The fact is we are all powerless at this point. We are at the mercy of Judge Walrath. Lets hope she is honest and keeps everyone in check.
Absolutely, cant do anything else but speculate at this time. I think we have all done enough due diligence over the last 10 years to convince ourselves of retained assets in safe harbor.
Now we are at the mercy of rule of law. There is always a possibility of FDIC simply confiscating the safe harbor assets or the trustees simply stealing the money and transferring it to some Cayman Island bank. Since there is zero disclosure of safe harbor assets, we are simply at the mercy of the court.
In my opinion, people should not be disrespecting Judge Walrath. She is probably the only one that may make sure our safe harbor assets return to us. Every other insider, hedge fund manager, and FDIC are crooks and are probably looking at ways to steal our assets.
We all need to start praying to God or meditating to will the universe to grant us an honest judge in Walrath. She is probably our only hope in getting our safe harbored assets back.
If the FDIC can takeover a solvent bank like Wamu, anything is possible. Also, I doubt tbe employees would have waited this long if there wasnt an agreement years ago with WMILT for a settlement at the end...otherwise, they would have started trial proceedings years ago. Trials take a lot of time. Would employees want to wait a few more years to get their money? We dont. They are probably just as anxious as we are in getting paid. There must have been a backdoor handshake between the employees and WMILT years ago. This fake request for disallowance and the follow up objection by employees to have the judge determine the validity of WMILT business is a ruse...its backing the judge into a corner and giving her ammunition to make a creative judgement.
Well, I guess we have two weeks till we find out if this goes to trial. I'm still optimistic that we see a settlement filing early next week.
I'm still hopeful employee claims get settled this weekend. Maybe we'll hear about it Monday. I just cant see it going to trial. If they wanted a trial, it would have happend by now.
IMO, its just a matter of the judge finding a creative work around the golden parachute claims. Maybe she will find a way to pay them off as consultation fees.
I'm calling it! Settlement by Friday!
Here are my reasons for my speculation.
1) WMILT was not stupid enough to believe employees would just voluntarily give up and not file any objections this Monday.
2) I believe WMILT is working with employee counsels with this fake request for claim dismissal. This way, it allows the employees to file the objection questioning the validity of WMILT existence as purely liquidation entity...and hence threaten POR7 and threathen the judge with embarrassment
3) Thus the judge may approve some sort of settlement with the employees in the "expedient interest" of the estate and not classify it as golden parachute payment.
4) The timing for settlement at end of quarter may allow for some book keeping acknowledgement of safe harbor assets in time for WMIH to do some sort of deal with the estate before Oct 6 vote for reverse share split. I think the likelyhood of any deal with the old estate assets and WMIH will diminish greatly after reverse share split. I think it needs to happen prior to it
Anyway, thats my speculation. We'll probably hear of the deal after market close on Friday.
No media coverage for 10 year anniversary of Wamu takedown? There were a few specials for Lehman but nothing for Wamu? Anyone seen any coverage?
I dont think so. I think most of the portfolio has been liquidated by now. But we will know soon.
Thank you sir. I can understand the 300 million in legal fees during the bk but 73 million in management fees? I know A&M was not acting as mortgage servicer or trustee of the various sercurities trust so my only guess is they were involved in the management of liquidating those various trusts. If I recall, didnt JPM disclose back in 2015 on their off balance sheet that they liquidated much of the $153 billion Wamu loan portfolio and that only about $38 billion was left.
My guess would be the $2mil a year is just for leaving the lights on. There is probably very little unliquidated loans left at this point.
Thanks AZ. This is what I was poking at. I dont have a spreadsheet of costs since 2012 but I imagine A&M has been paid in 10's of millions since and I would think it is not u reasonable to petition the judge to disclose why they are being paid for since 2012.
As I recall, most of the payment happened in the first year. Werent all of the classes above PIERS paid off in the first year? I dont think it costs that much to write a check. They didnt spend 100 million just to write checks. What have they been doing while the last trickle of money is being held back all these years at PIERS level?
Does anyone have an accounting of how much A&M has been paid to date? We should petition the judge to force WMILT to disclose the work order for all that payment.
Dont be so stingy! The execs in the employee claims have a lot more inside info into whats in safe harbor than you or I... I wouldnt mind giving them some escrow markers to guarantee that we get everything hidden behind safe harbor. Otherwise, we may never know with certainty that we are getting everything back from safe harbor.
It never hurts to align your interests with the insiders. I rather they get escrow markers than cash payout. I would feel a lot more comfortable with multiple insiders making sure we get maximum for our escrow markers.
Not if the judge overrule the objections and grants the claim dismissal which is unlikely...I'm hoping everyone gets into a room and settles this creatively...say pay the employee claims as consultation fees instead of golden parachutes.
I think you missed the point of my wishful thinking. If they somehow awarded them common escrow markers, then its 100% sure certainty that all of us escrow holders will get paid soon. We can even extrapolate how much to expect by seeing how many escrow markers were awarded to the employees.
Just my wishful thinking...Hoping God will grant me my wish...God, please award the employees with common escrow markers!!
AZ, do you know if those disputed shares held in reserve also come with common escrow markers? Wouldnt it be fantastic if the employee claims were settled with escrow markers? :)
PLEASE GOD! Let the employee claims be awarded common escrow markers!
AZ, I agree with your analysis. However, they are also on shaky grounds as they were not originally employees of WMILT. Their "employee claims" are based on their past employment under WMB or WMI...both of which has been determined by Judge Sleet as covered instituition for golden chute payments.
So yes, they are technically suing WMILT and they have them backed up into this corner with compliance per reorg rules but they also have a shaky claim as they were not originally employees of WMILT.
Well, I dont think any employee is giving up potential million dollar payouts at this point without at least a final fight in front of Wamrath...especially after waiting it out for 10 years. Like all of us escrow holders, the employees know what the true value of securities hidden in safe harbor and they wont go out without a final smack down from the judge. They wont simply just "quit" after all this time...
So keeping my fingers crossed. I hope its a settlment. I think the employees have been wronged by FDIC and JPM just as much as the stockholders. They also deserve a payout.
Settlement? They filed the objection and withdrew within an hour?
AZ, do you think Walrath might overule the employee claims objection next week? Do you recall if this is the first time they've brought up "WMILT is not a bank" objection? I thought they have used this argument before.
Isnt it odd that WMIH price slide sort of coincided with the objection coming out? Maybe we were suppose to hear some good news before the reverse share split in october but this objection may have delayed it.
AZ, do you also think we will hear news from WMIH regarding some sort of deal or payout from safe harbor assets before the reverse share split vote in October?
Its also odd that the objection deadline for the employee claims is 9/24 and the day after is a regular payout date for the class 17 notes.
AZ, it also looks like if there are no objections filed to the employee claims disallowance by 4pm ET on 9/24, this is a done deal and there will be no hearing on Oct 16. Do you know if it is possible for WMILT to distribute the funds for last payment before Nov 1st? I have a feeling they will try to close the chapter 11 before Nov 1st.
Better question is does safe harbor assets release before chapter 11 closure or after?
Anyone have an estimate of the percentage of released common shares owned by the hedge funds?
2221, I don't think WMILT can just hang around for another year or two after disbursing the last payment to PIERS and the remaining $40mil to class 19 and 22 at 75/25. Therefore, they will need to disclose that they are still waiting for safe harbor assets after the next payment (Nov 1st) or they will pay everything out on Nov 1st. Either way, we should know we have safe harbor assets coming back to us or get paid by Nov 1st...or be told that we are all screwed because they are shutting down WMILT and cancelling escrow markers after the $40mil is paid. They can't just keep WMILT and escrow markers open without disclosing more assets from safe harbor returning.
"The absence of evidence is not the evidence of absence." -Carl Sagan
I have been reminding myself of this quote to keep my faith. WMI was a holding company. It will be stupid and poor corporate governance to not hold the participating rights in the various ABS by the holding company and instead kept them at WMB level.
1)We know JPM admitted not purchasing WMI assets.
2)We know FDIC has safe harbor rules to protect solvency of ABS/MBS from untimely liquidation due to bankruptcy creditors.
3)We know WMI has paid off all its creditors without the aid of any payment from ABS distribution
4)We do not have direct evidence of ABS existence in safe harbor until first payment to class 17 is made. no payment to class 17 has been made even though DB settlement is done. Why isnt class 17 suing Fdic for illegal taking? Thats a lot of billions gone missing if there is nothing protected in safe harbor.
So I ask again.."Is the absence of evidence of safe harbor assets the evidence of absence of safe harbor assets?"
Could the largest bank ("savings" and loan) taken over by FDIC in history have zero assets in safe harbor?
AZ, I always thought it was odd for them to issue different escrow markers for the preferreds and commons...why keep distinguishing the classes separate if 75/25 distribution to the end...why not just issue one type of marker and distribute the markers 75/25 between the classes...afterall there werent different classes of WMIH shares issued to preferred and commons...everyone got the same WMIH shares at 75/25 split.
So why issue different escrow markers for the different classes? why not just issue 1 type of marker split 75/25?
I think you maybe right. I guess we'll soon find out.
Lodas, it does look like we have been done a great injustice up to now but to play the devils advocate... so far they have been technically and legally been able to hide the assets under safe harbor protection because there were still "unresolved creditor suits" in the bankruptcy due to the employee claims. So if they continue to hide the assets after 9/25..after the judge disallows the last creditor claim...then I think we should be legally allowed to ask the judge "where the sausage is"
If the biggest bank/s&l takeover due to liquidity (not solvency) results in 0 safe harbored assets left for the parent "holding" company, then we will need to pursue criminal charges against FDIC (for wrongful confiscation) and against the SEC for allowing a "holding" company (WMI) for holding nothing!
So, at some point in time after 9/25, we need to press WMILT to disclose what is in safe harbor. Hopefully someone here can attend the next court meeting and press Judge Walrath to force disclosure of safe harbored assets after the last creditor claim (employee claim) is signed off.
If they disclose zero safe harbored assets, then we need to ask the judge to press criminal charges.
8k today or Monday? I suspect they'll need something to talk about at next week's presentation at Barclays Global..
If you look through his earlier postings, he found some evidence suggesting WMI participation rate in the MBS WMB sold was between 25% and 50%. I think he took the 25% number and applied it to the total MBS sold by Wamu between 2000 and 2008 to arrive at the 172B. However, I believe you should probably discount the 172B by 25% to 50% because we dont know what the put back clauses are for the entire portfolio and many loans were probably refinanced during the last 10 years.
Interestingly, if you apply a 50% discount rate to the 172B you get 86B... which coincidentally is also the conservative amount Dr. A submitted in court years ago.
Additionally, when I went through the numbers on the last available Wamu 10K from 2007, I also came up with a theoretical $145B to the loan portfolio value..based on the reported interest margin on their entire portfolio in 2007. So I believe the max $172B and min $86B bound on the safe harbored loan portfolio is a pretty good estimate.
MAX $172B, Min $86B, IMO
AZ, thanks again for the detail explanation of the subordination steps. I suppose steps 3 to 6 could happen simultaneously if there are enough funds for 3 to 5 in safe harbor without requiring Libor suit payout. However, is it possible that the trusts backing class 17 may not be enough to pay in full so they cant skip to step 6 and pay the remaining trusts amount belonging to the estate.
So maybe they are waiting for the Libor suit funds to be available to payout class 17 in full so they can do step 5 and 6 simultaneously?
Otherwise, wouldnt they have made a partial payment to class 17 by now?
Dmd, your theory is very possible. The assets guaranteeing class 17 WMB notes are likely under the protection of safe harbor, just like the MBS interests belonging to WMI. We know that even though FDIC-R has released most of the 2.7B funds, there has not been a single payment to class 17 even though DB has been released through the probate court.
So, it is very possible that class 17 payment is locked out just like escrow markers because safe harbor assets cannot be released until WMI bankruptcy is finalized....which it is about to with the last employee claims about to be thrown out.
My only concern is if FDIC-R also need to close out the receivership to release safe harbor assets...or if WMI bankruptcy close out is sufficient. There are no more creditor class related lawsuits under FDIC-R so that maybe sufficient to release the safe harbor assets without the remaining Libor claim being resolved?? I'm hoping that is the case.
I wish we had a contact in FDIC who can answer this question of the release criteria of safe harbor assets.
Thank you for the example Raj. In your research, have you come across any language relating section 360 safe harbor clauses and recervership termination?