is making moves.
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You're right, the conference is going to be in open court.
I'm sorry, my answer was wrong and it's the other way around - they're generally open to the public unless the court and/or subject matter requires the conference to be held privately before the Judge.
No, status conferences are generally not open to the public.
Anytime, I hope I answered your question.
The sad thing is that a settlement would be significantly advantageous to shareholders like ourselves but do nothing in the way of correcting the systemic problems that you pointed out.
The bar date is only relevant to the filing of a proof of claim - it's not a deadline for the end of the Chapter 11 bankruptcy.
There really is no firm deadline for the end of a Chapter 11 bankruptcy because it isn't over until the parties vote and confirm a specific plan of reorganization. After the POR is confirmed, the avoidance powers and the automatic stay would cease to exist and the company would theoretically re-emerge as a smaller and leaner enterprise with a plan to pay off its remaining creditors and continue its business.
I admit I was distracted by the whole TPG illusion when I first acquired an interest in WAMUQ but at some point thereafter I became strongly disenchanted by Bonderman and his lack of meaningful or noticeable contribution to our cause. Since that point, I have been very reluctant to extend any confidence in Bonderman and grown very suspect of his relationship to JPM/WMI.
Some of the Project West information that has made it out into the forums over the past few weeks evidences a connection between Bonderman and Dimon - and indicates that JPM was going to reimburse TPG for its pre-seizure capital infusion in WMI. I can only imagine what else happened behind the scenes between these two characters.
The sheer disregard for ethics and conflicts of interest really require some attention in this case. I have my faith in the legal system and the few individuals - Walrath, Susman, Nelson and Hochberg - who are effectuating justice and/or zealously representing our interests therein.
Excellent move. I was going to do the same but it appears you beat me to it.
This is a very, very interesting find. This guy may very well serve as the nexus between JPM and the FDIC. I hope Hochberg investigates this in much more detail while Susman and Nelson get their hands on him for a not-so-friendly round of depositions.
Thanks RJ, that was very much appreciated and you're absolutely right - the lack of settlement and low PPS are a blessing in disguise for those looking to increase their position.
It sure does but I wonder what kept her so long. I really am beyond the point of trying to rationalize JPM's and the FDIC's use of common sense and business judgment. If they're really going to wait this out, then their mistake is going to reward us with dividends - pun intended - once the Mr. Hochberg's report disqualifies the DS/POR and justifies our moving forward into trial for damages and other relief.
Order approving appointment of Joshua R. Hochberg as examiner was signed by Judge Walrath and is up on PACER right now (Docket No. 5162).
Thanks for posting the schedule, Catz. It appears as though the Reuters article I quoted and linked in a previous post was inaccurate and off by a day.
Interesting theory - but I doubt it as the article stated that he owned them and to sell shares short you would sell borrowed shares. Good theory nonetheless, lol.
http://finance.yahoo.com/news/WaMu-gets-exDOJ-official-as-rb-2897321312.html?x=0&.v=1
Very much agreed. Lets hope our efforts and patience are well-rewarded.
I am also reluctant to believe that Rosen found a way to delay or successfully challenge the appointment of Mr. Hochberg. Our adversaries are in dangerous territory right now. I think I mentioned in a post last week that our adversaries would wait until the examiner was appointed to determine whether they might be able to "buy" him or her off. I'm willing to bet that once they got a look at Mr. Hochberg and his experience as a high-profile examiner and leader of the Department of Justice, they might have realized that buying him off was not something they could do - let alone risk attempting to do. They really underestimated the U.S. Trustee and of course, the Equity Committee. To that end, I am very proud that there is still some sense of respect and justice in our nation's legal system - because as a law student, I justified making this investment on that belief.
The only thing I might disagree with is your second statement because the appointment of an examiner traditionally falls within the exclusive authority of the office of the U.S. Trustee - and the court not only allowed the U.S. Trustee to exercise that authority, but also gave it broad scope of power with which the examiner can use to investigate a wide range of claims. Accordingly, if there was a concerted effort led by Rosen to discredit the appointment of Mr. Hochberg, it would most likely be in the form of a letter delivered to Judge Walrath - not filed on PACER. I work in litigation and I see parties challenge applications and requests all the time - and unless the letter stating the grounds for the challenge is "so ordered" or "memo endorsed" by the judge and filed on the docket, the general public will never know of its existence.
Assuming she intends to maintain the aggressive schedule she ordered in the last hearing, then those are the two strongest and most logical arguments in support of her delay.
Correct.
The only ambiguity is whether she would accept a proposed global settlement agreement, but I discussed that in my post here:
If Judge Walrath is firm on not accepting a new amended DS/POR until completion of the examiner's investigation, then her position might create a major paradox because a new settlement would serve as a prerequisite for an amended DS/POR - even if the settlement and subsequent amendments to the DS/POR are favorable to equity. Accordingly, if she won't allow the amendments to proceed then WMI/FDIC/JPM have no incentive to settle during the investigation because the examiner would still obey the court and continue his examination anyway. On the other hand, the bottom-line purpose for the appointment of an examiner in this case is really to protect equity's interests. Accordingly, if those interests are adequately represented in a new global settlement agreed upon by all parties, then in theory there is no reason for the court to employ an examiner to protect equity's interests since they would already be protected by the new settlement.
I agree with you, which is why I'm so surprised that she would delay signing off on the order.
Your three options are very reasonable - but Rosen has very little basis, if any, to object to the U.S. Trustee's appointment of an examiner. He's good, but he's not that good - and both Susman/Nelson and the U.S. Trustee have proven that time and time again as evidenced by the appointment of an equity committee and now (potentially) an examiner. The fact that Mr. Hochberg liquidated 300 shares on Monday morning won't do Rosen much good as he technically has no conflict of interest now that his interest in JPM is gone. Accordingly, I don't think option three is the issue. My instincts tell me that serious discussions might be underway - so I'll go with your option number two.
Not that I know of. I think the aggressive schedule set by the court still stands.
The preliminary report is due (if I remember correctly) either August 6th, 8th or 10th. I forget which one.
That is not even remotely close to six weeks away. Perhaps you are thinking of the next omnibus hearing.
**EDIT** The work plan is due on August 7th and the examiner can begin the process of soliciting documents immediately after his appointment is confirmed by the court. See the below-referenced quote from Reuters and link in support.
Walrath accepted a broader brief for the examiner than many of the creditors wanted. She directed the U.S. Trustee to name a candidate by Monday and directed the examiner to provide a work plan by Aug. 7 and a preliminary report by Sept. 7.
Thanks Rockie. Very much appreciated.
You're right about the possibility that the signed order might not have been filed yet but as for the court-ordered schedule, that deadline has not changed - at least not to our knowledge. Everyone must remember the fact that Mr. Hochberg is technically not our examiner until that proposed order is signed by Judge Walrath. Accordingly, he does not have the authority to begin his investigation, put together a preliminary report and get started on meeting the deadline set forth by the court at the last hearing.
If the fair judge was so adamant about getting the examination started quickly and efficiently, then we must interpret the possibility of some obstruction in her delay to follow through with getting the examiner going. It just so happens that the obstruction might very well be a good one for equity and in the form of a settlement offer that was worth asking the judge to hold off at LEAST a day on signing the proposed order.
Thanks brother - for both the warm wishes and the transcript. I'll do my best on the test.
Her earliest convenience does not coincide with the aggressive schedule she set forth in the hearing granting the appointment of an examiner. If she wasn't in a rush, she wouldn't have given the U.S. Trustee mere days to appoint one.
His reluctance to acquiesce on anything they've opposed until the very last minute not only supports, but proves, that your statement is correct - or at least very much grounded in statistical reality.
By the way, I believe if a settlement is not reached by the time the examiner submits his preliminary report to the court, then we will not see one until after the investigation is complete and/if we move into the trial phase. However, at that point it will cost our adversaries far much more to settle as I suspect the examiner will uncover some pretty valuable claims for us to pursue and maintain against them.
Study break and I'm back on for a few minutes, lol.
I actually approached one of the more senior attorneys at my firm whose practice involves bankruptcy, creditors rights and complex commercial litigation with this question and even he couldn't give me a straight answer on the issue.
What we do know is that Judge Walrath clearly stated she would not accept any amendments to the DS/POR until the examiner completes his investigation. I don't have a transcript of the proceedings so I can't confirm whether she stated that she would accept a proposed resolution.
If Judge Walrath is firm on not accepting a new amended DS/POR until completion of the examiner's investigation, then her position might create a major paradox because a new settlement would serve as a prerequisite for an amended DS/POR - even if the settlement and subsequent amendments to the DS/POR are favorable to equity. Accordingly, if she won't allow the amendments to proceed then WMI/FDIC/JPM have no incentive to settle during the investigation because the examiner would still obey the court and continue his examination anyway. On the other hand, the bottom-line purpose for the appointment of an examiner in this case is really to protect equity's interests. Accordingly, if those interests are adequately represented in a new global settlement agreed upon by all parties, then in theory there is no reason for the court to employ an examiner to protect equity's interests since they would already be protected by the new settlement.
That's the dilemma that I see with procrastinating until the examiner begins his investigation. I don't see how reasonable business judgment could justify them reluctantly giving an examiner access to documents when the examiner clearly knows what he is looking for, how to find it and what he is trying to prove. In the end, it will be a tremendous risk that may potentially create an exponential amount of exposure in the $100+ billion range when they could presently engage in a mutually equitable settlement in the $30-56 billion range. It just doesn't add up to me. As shrewd as Dimon is and as daring as Bair might be, I don't believe that either of them made it this far in their respective careers by substituting arrogance and hubris for common sense and rational business judgment.
There are two more quick points that I'd like to make in reference to your post before I get back to the books: (1.) absent any contrary information, knowledge, or clarification of the above-referenced paradox and amiguity from Judge Walrath, our adversaries would assume a major risk by daring to move for a settlement during the examination when it's not even clear that Judge Walrath will sign off on one without completion of the investigation; and (2.) even if they do proceed with the investigation, once the examiner comes across a hint of evidence pointing to fraudulent or illegal activity, he will inform the Department of Justice and criminal investigations will begin - even if the parties settle and the examiner's investigation ends.
That's all folks. Back to outlining. I have a monster Remedies exam to take on Thursday and I intend on destroying it. In the interim, I will sleep well knowing Judge Walrath has yet to sign off on the U.S. Trustee's Application.
My first stickie - thanks Uzual !
My gut could very well be wrong but something tells me the lack of a signature on the Application of the United States Trustee for Order Approving Appointment of Examiner is very suspect and indicates that something may be going on behind the scenes - and it is probably very good for equity and here is why.
(1.) McMahon and DeAngelis have the exclusive authority to appoint whomever they want subject only to the approval of Judge Walrath - indicating that the parties really cannot contest the U.S. Trustee's selection for appointment or claim they weren't afforded the opportunity to submit their own candidates for consideration; (2.) Judge Walrath was very clear about getting the examiner appointed by Monday and having the said examiner submit a preliminary report within a few short weeks - indicating that every day counts and there is not a moment to spare; (3.) the appointment of Joshua R. Hochberg would present a VERY formidable threat to the WMI board, JPM and the FDIC because he has significant experience in the examination process by virtue of his work in the REFCO bankruptcy and has quite a resume behind him with the U.S. Department of Justice to show he knows not only what to look for but where to find it - indicating that our adversaries are concerned that the appointment of Mr. Hochberg might lead not only to significantly increased exposure to financial liability but also an increased likelihood of criminal liability based on his connections to the Department of Justice; (4.) Judge Walrath has already stated that she would not accept an amended DS/POR until the examiner is through with his investigation - indicating that their plans to settle to our detriment and reorganize with the elimination of commons is completely out the window because Mr. Hochberg will not only discredit their existing DS/POR but also begin an investigation that will ruin them, while raising a question as to whether they would even be able to settle during the time that the investigation is taking place; and finally (5.) if history has taught us anything, it's that our adversaries have a habit of waiting until the absolute last minute before finally acquiescing - and this would be the last opportunity they have to settle before the examiner is appointed and the investigation quickly commences.
Again, this is just my gut speaking to me and logic making an attempt to justify my instincts. I could be wrong and this could simply be a delay as Judge Walrath performs a quick background check to verify that he is not conflicted in any way - but I hope I'm right and that this is it.
I'd love to stay online and discuss this further but unfortunately I have an exam to study for (wish I never took a summer class) and need to get on with it. My fingers are crossed and I'm hoping for the best.
Godspeed and good luck to all of us.
I need to look up more case law within the third-circuit to confirm but I believe that, absent clear abuse of discretion, the court's decision to appoint an examiner or grant its a scope of investigation is not appealable. It should also be noted that almost all of the parties were on board with the appointment but disagreed with respect to the scope. Accordingly, even if they could appeal - the appeal would never move forward because of what is on the record.
This will illustrate everything you need to know about the appointment of an examiner.
http://www.arentfox.com/publications/index.cfm?content_id=1078&fa=legalUpdateDisp
I have a very good law journal article on point as well but need someone to host it for the board to read.
I cast my vote for the nomination of Dr. Sankarshan Acharya for examiner.
It's too bad he would be conflicted out though. =/
I've been too buried in law books to follow anything other than our case, lol. I did, however, hear something about Dimon criticizing the proposed regulatory changes. Perhaps that's what you're referring to.
You definitely make a good argument, however I can't help but look at the fact that Obama considers Dimon to be his favorite banker and surrounds himself with the likes of crooks like Paulsen, Bernanke and Geithner. I have to wonder whether his administration is pushing JPM and the FDIC to settle or do whatever is necessary to hide this under the rug before it affects his opportunity to secure another term at the White House.
Indeed. This would be a perfect example of the EC using WMI's own memorandum to contest JPM's threat to revoke the NOLs in the event that settlement is not finalized.
The discovery under Rule 2004 was fallback to the EC's original motion for the appointment of an examiner and it was only granted because Judge Walrath felt the parties would comply with discovery and the litigation process - thus eliminating the need for a full-fledged examination. She was wrong. WMI proved itself before the judge to be a hostile adversary to the EC - with interests in line with the FDIC and JPM for the quick and expeditious approval of its DS/POR. In a situation like this, where a party (even a party with common interests, like WMI) clearly abuses the discovery process, the requesting party can move for sanctions.
I honestly don't know. I'm very surprised Susman never filed for discovery sanctions under FRCP Rule 11 as adopted by the bankruptcy code but I'm sure he has his reasons. It's worth noting that we have no idea what Susman and his team are doing behind the scenes. I do believe they have been very aggressive in their representation of the EC and trust they are not only taking our points into consideration but also proceeding in a manner than essentially forces our adversaries to settle without pushing for costly litigation. I'm sure there is a method to his madness and I trust it.
Glad to see you back in the commons, Mordicai. I hope you didn't wipe out your entire position and buy back in just now - the capital gains benefit on whatever settlement is reached could be pretty significant.
I'm glad everyone agrees. We should be "swinging for the fences" and it's a damn shame the estate didn't even try to get up and bat. I don't see how they could possibly justify a "settlement" that is based on $4 billion of our own money and $1.9 billion of our own NOL-based tax returns. That's not a settlement by any stretch of the imagination - it's an insult to our intelligence and a total joke.
That comment about the examiner being appointed by someone in DC concerns me a bit. The government does not want to look bad and an investigation that bears fruit for equity would do just that. My faith in our cause relies solely on the EC, Susman, Nelson and McMahon. That's it. The workings of this case defy both logic and law. It's up to our team to make things happen.
P.S. I earned a black belt after thirteen years of Korean Tae Kwon Do and participated in the tournament scene throughout high school. It's always a warm pleasure to come across fellow students of the martial arts. You have my utmost respect for maintaining your gentlemanly composure as I imagine that would be quite difficult given the dire circumstances and what is at stake here.