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Anyone aware of any bankruptcy plays in history that took more than 9 years to pay out?
Question for Tax Experts:
If any of securities that DB trust probate funds returns to is owned by WMIIC or somehow passes to WMILT, can either of those entity hold those returned funds without disclosing it.
If either entity held the funds without disclosing it past the quarter in which the fund is received, wouldn't it be liable to file income taxes on those funds instead of passing the tax liability to escrow holders by distributing it?
For example, if it received the fund in January and held it past march 31st without passing it through to escrow, would it not be liable to file income taxes on those funds?
Thanks Cura. If you add up the assets from the Primary Trusts shown in that table at the very bottom of the filing in exhibit a from duff & phelps, the loan portfolio size under DB is $165 billion. I wonder who is the trustee for the other half of wamu loans. As I recall from the last 2007 Wamu 10k, there were approximatley $330 billion in wamu loans.
Does anyone have a link to the DB court document from the probate listing the total amount of assets under their trust?
AZ, in the exhibit 2 of the link, there is the list of wamu securities that the DB probate money is flowing back to. I assume WMI owned quite a few of these. Do you think these securities would have been held under WMIIC or the dissolved WAMU 1031 Exchange? If they were held under WMIIC, wouldnt WMIH be required to report an 8K as soon as money returns to the securities held by WMIIC?
However, if they were held under Wamu 1031 Exchange, who knows what happens?? Also, I wasnt around much in December. Do you know which Delaware sub did the Wamu 1031 Exchange consolidated its assets to when it was dissolved?
http://www.globic.com/wamurmbssettlement/pdfs/DB%20WaMu%20TIP%20Notice%20to%20Holders%20re%20Distribution%20Timing%2012.11.17.pdf
MB, I agree with you that a lot of it is going to WAAC. If you look at Exhibit 2 in the attached link, it shows all the wamu securities that the DB probate money is flowing to. There are a lot of cusips associated with WAAC. The money will not directly flow to escrow. However, I suspect WMI owned a lot of the securities listed on exhibit 2 and so I'm hoping the money will simply "pass through" WMILT and hit our escrow account.
However, there is still a chance, and this is my fear, that the money will flow back to those listed securities owned by WMI, and then sit in some bank somewhere and more delays with flowback to escrow. At this point, we cant discount that possibility.
http://www.globic.com/wamurmbssettlement/pdfs/DB%20WaMu%20TIP%20Notice%20to%20Holders%20re%20Distribution%20Timing%2012.11.17.pdf
ref, i dont know what the distribution will be but it looks like it would be a direct "pass through" through WMILT. I think how this distribution ends up will be telling of how the main safe harbored assets from the DB probate hits our accounts in the future.
john, take a look at the attached link. it states the distribution of the "received funds". and earlier in the paragraph, it defines "received funds" as $666 million
FYI, the anticipated Jan 2018 distribution is only for $666 million. It is the portion of settlement with FDIC-R. It is not the main safe harbored assets. Just so people dont get excited when we dont see big money in Jan. I'm still puzzled by where the main safe harbored assets are sitting with the end of probate last september.
http://www.globic.com/wamurmbssettlement/pdfs/DB%20WaMu%20TIP%20Notice%20to%20Holders%20re%20Distribution%20Timing%2012.11.17.pdf
RD, not being sarcastic. If I were the attorneys for the parachute claims, those would be the type of arguments I would make against FDIC no patachute rules. None of us know, what kind of closed door negotiations have been going on but based on timing, it is likely they are delaying the parachute claims settlement until after safe harbored assets returns.
My original 2017 payout timing thesis still stands. End of DB probate will trigger safe harbored assets. I didnt think it will take us into 2018 but it is. DB announced earlier that wamu securities from probate will not be paid no earlier than Jan 2018. So I would say we are probably going to have to wait until march 2018. Hence, the March 2018 WMILT deadline has been extended another 3 years. So, I would say its very possible parachite claims are waiting for safe harbored assets return to prove that the bank was solvent.
Maybe the limitation on employee parachute payout claims only applies to failed banks and not to illiquid banks. Maybe if they wait this out long enough until safe harbor assets return, the employees can justly claim that their bank was properly run and not ladened with bad loans and that the bank was hastely taken over by FDIC due to an unforseen bank run that made it illiquid temporarily.
Or, they could claim that they are the employees of the holding company and the holding company was always solvent with safe harbored assets as proof.
Just IMO.
CBA09, if safe harbor rules protect the assets to pre-bankruptcy ownership then its distribution should not apply to POR7. Does that mean escrow markers are moot? Will all Wamu shareholders receive a distribution including the non-releasing ones? Thanks in advance for your input. I have been wondering about this for some time.
AZ, this is very interesting. So you are theorizing that the $600 million series B cash held by WMIH is not for aquisition but for supporting about $7.5 billion equity interest participation by WMIIC in the MBS trusts?
If theat is the case then, wouldn't the probate end of DB trust in 4th quarter of 2017 require WMIH to report the income from the earnings released from the probate? Shouldnt they have disclosed by now?
Also, what will happen when WMIIC is dissolved? I assume they will have to make full disclosure by then. It is strange that they have been talking about dissolving WMIIC since 2016 summer and it still isnt done. Clear proof that there are large assets in it - shouldnt take this long to dissolve it if it really had zero assets.
Good bless you too Altini. I've been reading your posts frim the very beginning. Thank you for all your contributions over the year. This wait had been very frustrating but there two things I am certain off...
no one drags put lawsuits unless there is money involved.
institutional preferred share holders have billions to loze if there are nothing in safe harbor and they wouldnt have sign up for POR 7 if there were any doubt of what was in safe harbor.
thank you wamutrader! bump to top.
cautionary tale for all escrow owners
Happy New Year everyone! Just got back from my winter break and feeling especially lucky! Do not loose hope. If there is not a lot of money involved, this whole fiasco would have been over years ago. The courts would not have been able to justify dragging the employee claims case this far, if all there is just what's showing on WMILT balance sheet.
I am feeling especially lucky! 2018 is going to rock!
Could WMIH be holding some escrow markers? Do you guys recall the disputed shares that WMIH was initially holding coming out of the bankruptcy and then were later distributed back to common escrow markers? What if those disputed shares had their own escrow markers associated with them but were not redistributed. So WMIH is still holding them? I think I recall about 2.5% of initial float was held in dispute.
So perhaps 2.5% of safe harbor assets returning goes to WMIH escrow markers?
Anyway, I have a suspicion that WMIH lost out on the share for value exchange bidding with the returning safe harbor assets. Perhaps JPM bought off the remaining loans. It's very suspicious that they waited this long to announce the refinancing deal. I hate to admit it but probability of WMIH merger by EOY is probably 5% now.
However, I still think escrow markers still has a good chance of seeing something by EOY. I still believe DB probate assets will somehow make their way through the Wamu 1031 Exchange and return to escrow markers. Only a few more weeks to be either really disappointed or happily vindicated.
One last thought, I doubt the hedge funds would have signed POR7 if all they are getting is WMIH with $6 billion NOLs. We all know for a fact that safe harbor assets exist. The DB lawsuit proves that. However, what nobody seems to know is when or how they will return to escrow.
I'll keep my fingers crossed for EOY escrow payout but if it doesn't happen, I'm prepared to wait 10 more years. I know my pain will be shared by all the hedge funds so at least I'm in good "effective" company. I would be worried if the pain is only shared by common folks like you and me.
MD, thanks for the clarification. I thought I recalled someone else stating at this year's call that a merger for EOY was for sure and we can fire him if it didnt happen.
Actually, I would love to hear that response from them as it would indicate that they are probably very close to closing the merger.
Could somebody call in today for the conference and ask who's going to be first to resign for failed merger by EOY...as promised back in the summer conference.
RD, unfortunately, I dont think there will be a WMIH merger this year with today's announcement. Otherwise, the BOD will look like idiots. However, I'm still hopeful escrow will still get payout by end of the year. DB probate is done. Money has to go somewhere soon.
Exactly my point. Their lack of an operating business might have put them at a disadvantage in bidding to merge with those safe harbored assets. Perhaps JPM just ended up buying the remaining portfolio. They did finish raising that $173 billion this year. Took them awhile -- they filed their s3 back in 2015 for it.
Its possible that WMIH could have lost out on merging with remaining loans from Safe Harbor for shares exchange to another party willing to buy the remaining portfolio for cash. Hence, we get today's announcement this late in the game.
Maybe KKR is the one shorting the stock to bring the price down. Its interesting that they are now willing to accept common stock as payment for the 3% dividend. With current pricing around 85 cents, a single semi annual dividend would cover the 6 million short interest.
No,I dont think so but it is getting real close to Christmas. I dont think the event can happen between Christmas and New Year. So it has to happen by the 22nd in my opinion. Getting real close...
Thanks Barry. Do you have any links to the two broker dealers you are referencing to? I've been thinking about AZ's REIT idea for WMIH. I think it is very possible that the remaining loans will be exchanged through Wamu 1031 Exchange with WMIH.
This waiting game is making me a little nervous because of DB probate. If we dont see some sort of merger by end of this year, I think we may be looking at some prolonged lawsuits.
Thank you CBA09. That is what I suspected originally. Safe Harbor assets release should have been controlled by the MBS trustee. What I don't understand is how DB as trustee could be discharged from probate without WMI receiving our assets? If DB is gone, who is the current trustee of our assets?
Unless of course, we do have the MBS assets under Wamu 1031 Exchange and are currently awaiting stock for value exchange with WMIH. Could this explain the delay?
I still don't like that DB has been discharged as trustee and we do not know who is currently looking out for our interests.
CBA09, is there a time limit for disclosure of what's in safe harbor? Does FDIC have any fudiciary duty to disclose final accounting of all asets in safe harbor? If so, is there a time limit?
Thanks in advance, LP
Barry, you are too humble. You are definitely Tier 1. You actually got FDIC-R to confirm the independence between safe harbored assets and the receivership...and confirm that JPM only got WMB assets.
CBA09, wouldn't WMIIC as the depositor have control over the MBS trusts as to when to release the assets in safe harbor? If WMILT does not have control due to "bankruptcy remote", and FDIC-R do not have control due to "safe harbor", then who else could be in charge of the trusts release? I originally thought it was DB as trustee. Since DB just finished probate, I thought the assets should have been released by now.
Could they have been? Could the assets have already been released and are currently being worked through WMIH 1031 Exchange for merging with WMIH for the 3.5 billion shares stock for value exchange? And they we are simply waiting in a Sec mandated quite period?
Otherwise who else could have control over the MBS trusts in safe harbor? The only possible party left is FDIC-C. I'm afraid if they are the ones in control, we may have to wait until the last loan in the portfolio is paid off..could be another 10 years!!
Thanks LG. I hope they announce before Christmas.
Has Wamu 1031 Exchange dissolution date also extended?
Expected Escrow return >= $80 billion
Uncertainty < 5%
Expected Return Date <= Dec 31, 2017
Uncertainty < 20%
I'm glad to see so much noise on this board. You know what they say, "where there's smoke, there's a fire"
I thought I'd give update in my prediction. :)
Merry Christmas everyone!
Expected Escrow return >= $80 billion
Uncertainty < 5%
Expected Return Date <= Dec 31, 2017
Uncertainty < 25%
I dont think it will happen if the purpose of Wamu 1031 Excgange is for all stock for value exchange with the new 3.5 billion shares being split 75/25 to maintain same ownership percentage of WMIH as in 2012 so that they wont loose the $6 bil NOL
Again, its just a probable speculation right now but we should soon find out. Keep an eye out for an 8k from WMIH about NASDAQ delisting notice. If you don't see one by end of Monday, I think we can rejoice as the end is very near. My guess is they will announce the merger by first week of December at the latest
Actually, this rule reinforces what I was speculating about 1031 exchange. We havent been holding stock for trade. We have been holding escrow markers that are not tradeable so wouldnt this rule allow us to trade in our escrow markers for newly issued WMIH stock?
Dont know but it doesnt matter. It will be pretty clear to me what the fair valuation should be based on the safe harbored assets that we merge with. I will just wait past any temporary volitility and sell when I think the price is at fair valuation.
I thought quiet periods are typically around 30 days but it doesnt matter. I'm just reassured that we are likely in a quiet period if you dont see an 8k filing by close of Monday for NASDAQ delisting notice. WMIH should have gotten that notice from NASDAQ yesterday for 30 days of under $1 trading. So if I dont see an 8k for that by end of coming Monday, I will start feeling pretty confident of us being in a quiet period.
No, I meant 3.5 billion shares for the exchange with the existing 200 million share base such thay, the new valuation for WMIH stock would be whatever total assets in the merger divided by a total of 3.7 billion shares post merger.
Ron, thats possible but not probable in my opinion. At this late in the game, we only have the 3.5 billion shares authorized. Also, I think the distribution to the escrow markers will likely be 75/25 split to maintain the same ownership percentage after the share for value exchange so that they dont loose the 6 billion NOLs. Again, just my speculation.