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Read carefully and you will read about refund.
Taxes/Great/News/read Carefully!
Washington Mutual Owes $12.5 Billion in Back Taxes, U.S. Claims
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By Steven Church
Jan. 24 (Bloomberg) -- Washington Mutual Inc., the former parent of the biggest U.S. bank to fail, owes $12.5 billion in back taxes, the Internal Revenue Service said in court papers filed in the company’s bankruptcy case.
The company filed papers Jan. 22 asking U.S. Bankruptcy Judge Mary F. Walrath to void at least part of the alleged debt, arguing that because Washington Mutual lost so much money, it expects to get a federal tax refund. The company also said the IRS filed a claim in bankruptcy court before making a formal determination about how much Washington Mutual actually owes.
“In all possible situations, the IRS will owe WMI money,” the company said in court papers filed in Wilmington, Delaware.
The company, based in Seattle, filed for bankruptcy on Sept. 26, the day after its banking units were seized by regulators and sold to JPMorgan Chase & Co. for $1.9 billion. WaMu has said it plans to try to get a refund for previous years’ tax bills based on $20 billion in losses.
The IRS filed two priority claims against WaMu: one on Oct. 27 for $2.3 billion and another on Jan. 13 for $10.2 billion. The company also filed two claims that have a lower-priority as well, for a total of $87 million. The company hasn’t filed an objection to the $10.2 billion claim.
Claims in bankruptcy court are often disputed and ultimately reduced by a judge after a court hearing. Tax claims take precedence over many other kinds of debts owed by a bankrupt company.
WaMu has been working with the IRS to resolve the company’s tax liability, according to court papers. An audit, which covers the years 2004 through 2007, isn’t complete.
WaMu claims it has more than $4 billion on deposit with J.P. Morgan with which to pay bondholders and other creditors owed billions.
The case is In Re Washington Mutual Inc., 08-12229, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Steven Church in U.S. Bankruptcy Court in Wilmington, Delaware, at schurch3@bloomberg.net.
Last Updated: January 24, 2009 00:01 EST
TPG Purchase/Bloomberg Article
TPG, CVC in Talks to Buy 45% Stake in Caceis From Natixis for $2.1 Billion TPG Inc. and CVC Capital Partners Ltd. are in talks to buy 45 percent of French custody firm Caceis from Natixis SA in a deal that may value the unit at about 1.6 billion euros ($2.1 billion), four people familiar with the matter said.
Soon to be a even exchange, one JPM common share for one WMI common share as JPM will drop into the teens!
The Short Case for JPMorgan
by: Value Investor Insight January 17, 2009 | about stocks: JPM
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Become a Contributor Submit an Article Font Size: PrintEmail TweetThis In the December edition of Value Investor Insight, Soma Asset Management's Igor Lotsvin described how his portfolio is positioned for 2009. Key excerpts - explaining his bear case for JPMorgan Chase (JPM) - follow:
Describe the bearish case for one of your highest-conviction shorts, JPMorgan Chase [JPM].
IL: People want to believe that certain companies because they’re the high-quality players will ride out the credit crisis without that much pain. JPMorgan deserves credit for being much better positioned than others, but that doesn’t mean its pain from loan losses is going to be any less real.
As much respect as we have for [JPMorgan CEO] Jamie Dimon, we were frankly shocked at the purchase of Bear Stearns in March and expect it to be the biggest mistake of his career. We’ve worked on acquisition due diligence and can tell you there’s absolutely no way the decision over two days to buy Bear Stearns was much more than a gut trading call on Dimon’s part that Bear’s assets were fundamentally solid and that the government’s willingness to cover $29 billion in asset writeoffs had him covered. We just think that’s going to turn out to be fundamentally and disastrously wrong.
Why?
IL: As of the end of the third quarter, JPMorgan had $2.2 trillion in liabilities on its balance sheet, against which it has a market cap of around $116 billion. As we go through the various components of the loan portfolio and make assumptions about the level of writeoffs, big chunks of that equity value get eaten up quickly.
For example, the company has a credit card loan portfolio of $150 billion, on which we think loss writeoffs could go as high as 13-14%. They point out that losses on credit cards peaked at 8% in 2002, but we think this recession will be much worse. Consumers are more leveraged than they’ve ever been, unemployment rates will almost certainly go higher than they’ve been in decades, and there are no other sources of liquidity, like savings, for people to pay off their credit cards. There’s another $100 billion in home equity lines of credit, on which we think losses could reach 15-17%. They have $15 billion in subprime mortgages, on which losses could be 50%. They have $50 billion in prime mortgages, with losses on that likely to be 10-15%.
In all, we think there’s a reasonable chance that JPMorgan is facing $50 billion in losses on existing loans over the next year, which would cut its book value to the high-teens per share, from the current level of $35.
We assume you’d expect the share price, currently $31, to follow suit.
IL: The shares already trade below book value, which is highly unlikely to change if the company experiences the loan losses we expect. If we’re right, we’d expect to see the share price fall at least to $15.
What are the biggest risks to your thesis?
IL: The key here – and this is true of a lot of our shorts – is how soon the housing market starts to rebound. If that happens much sooner than we expect, there’s a good chance we’ll be wrong about how bad the loan losses get.
click to enlarge above image
I would not be surprised to see a 8 filing this evening (after 9:00pm) explaining a 30 billion dollar settlement from the FDIC to keep from exposing all of their dirty laundry and to keep from losing more faith/confidence in the markets.
Diamond, I agree with you. All one has to do is follow the money. I do not see why people want to make something so easy, difficult.
WMI common will be the trade of the century. Remember one thing, WMI went into chapter 11 to avoid the thugs, not because they had to.
With JPM moving their earnings to Thursday the 15Th, makes me wonder if they announce the rest of their purchase of WMI on Friday the 15Th. This could be buried over the long holiday weekend (presidents Day-Monday) and then the inauguration on Tuesday,making worldwide headlines and history,thus burying the WMI catastrophe.
I could not agree more, but more than likely it will happen when least expected. They will want very little media exposure, so I believe it will be tied to another huge media event, possibly the Superbowl weekend as well as the Presidential Inaguration.
I think merger Monday Morning January 19, could be the day an announcement is made so they can bury it in the Presidential Inauguration Gala at $9.75 per common share and the assumption of preferred to the extent possible.
That is great news...thanks
WMI monthly 8K is out. Looks like one billion more liabilities than assets. This seems too be much more than last month in liabilities...your thoughts
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=6060800
Mr. Williams was already an executive before the seizure which means he already had stock/stock options and other sources of equity. These prices you see for the options would not have been made after the seizure. It does not show him being handed anything after the seizure other than his hourly rate and or salary. Sorry, did not want to be negative but factual. I wish he would have been awarded something post seizure tied to common stock, as it would give me more hope.
Diamond, thank you as would give hope and another reason to believe, this could be the best bet on Wall Street.
WaS, thanks for the intelligent reply as I agree with most everything about WMI becoming worth anywhere from $5.00 to $14.00 a common share when you factor in the unknown worth, NOLS, and the illegal conveyance that is worth billions.
But as in any case where there is a lot of money involved, if they can get rid of the common stock, the new stock would be worth much more to those who would get it and the common stock would win the battle but lose the war.
I understand Health South traded down to around five to ten cents a common share, but they never filed chapter 11, but just had the same law firm as we do now. The law firm is great but if they did not actually file chapter 11, then it is not the same, as I am worried they will cancel our common shares.
Does anybody know of any company (s) that filed chapter 11 and re-emerged with their common stock worth something as opposed to cancelled and zero value? I would be talking firms that are not family owned or majority of family controlled.
I do not know of any and I am wondering if my large purchase of WAMUQ has a chance? I know a buyout is the best chance but the longer this goes on, I believe this is much less likely.
Thanks a lot as this put the "NOLS" under a better light, but I wonder if anybody knows for sure...anybody?
If you are right, that iss very troubling for the common stock.
I hope you are right, but I do not know what the truth on the "NOL" is, as this is extremely important when buying the common.
"NOL" is still good even with cancelling WAMUQ stock? Does anybody know for sure as this find is not good for common if true?
Stock Ticker: WAMUQ.PK
This is the common stock of Washington Mutual. This probably has the worst probability of any recovery unless there is a buyout or a significant change in assets. For some reason there is an impression that common stock must be maintained to carry forward the company’s considerable net operating losses. However, based on the information that has been gathered this is not true. These stocks currently have no representation at the bankruptcy court.
Information regarding NOL’s
http://findarticles.com/p/articles/mi_qa3857/is_199801/ai_n8786997
Hopefully, this article has been educational and will no longer allow persons to misrepresent the value of currently traded Washington Mutual stocks. This information was gleamed from public sources and was not reviewed by an attorney, so please do your own due diligence and read the information that has been provided.
For further questions regarding this, please visit WamuCoup.com or WamuRape.org
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zardiw Posted: Friday, December 26, 2008 7:56:34 PM
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Ok, explain how removing ALL the 'owners', i.e. current shareholders, does not constitute an 'ownership change', which negates NOL's.......z
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Mike Posted: Friday, December 26, 2008 8:28:04 PM
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Z
if you read the article at the bottom it says that the creditors can become the new owners under the bankruptcy exception. As long as the creditors become the new owners, then there is no need for common stock. This isn't the only article I have seen on the subject but it is definately the most straightforward.
Bankruptcy Exception
There is an exception to these rules for bankrupt corporations under Section 382(1)(5). This exception would apply if a stock-for-debt exchange was approved by a court when: (1) Deadbeatco was under the jurisdiction of a bankruptcy court in a Title 11 or similar case (i.e., receivership, foreclosure or similar proceeding in federal or state court) immediately before an ownership change; and
(2) the shareholders and creditors of Deadbeatco own fifty percent of the value and voting power of Deadbeatco's stock immediately after an ownership change (the "continuity of ownership" test).
Only stock received by "qualified creditors" is counted to determine whether the fiftypercent continuity of ownership test is met. To be a qualified creditor, the indebtedness exchanged for the stock:
(1) must have been held by the creditor at least eighteen months prior to the date of filing of the Title 11 or similar case (most applicable to long-term debt); or
(2) must have arisen in the ordinary course of the trade or business of Deadbeatco and must at all times have been held by Deadbeatco (most applicable to trade creditors).
Only stock that is received by creditors in partial or full satisfaction of the prior indebtedness is counted to determine whether the continuity of ownership test is met. Stock received by shareholders or qualified creditors in return for new capital contributions is not included.
Special Rules Applicable to Bankruptcy Even if a stock-for-debt swap qualifies under Section 382(1)(5), there are several provisions that reduce the amount of pre-change NOL carryforwards that are available to Deadbeatco.
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This WMI mess could easily be settled for $10.00 to $14.00 a share when you factor in the illegal conveyance, cash, NOL and a possible bid from a competitor who would want to really damage JPM throught the potential lawsuit they would inherit with the purchase.
WMI does not have four sets of the best money can buy when it comes to lawyers for nothing.
WFC/WMI Combo?
I believe it is possible WFC is laying back like a smart tiger stocking it's prey. WFC did this to C and ended up aquiring WB for a still low price of six-seven dollars a share.
Can one only imagine the power of the WAMU name and WFC if they called it something like "WELLS FARGO-WAMU"?
This would blow JPM out of the water and be an immediate positive explosion for WFC.
Not to mention, a much wanted and exciting bidding war in the chapter 11 court.
I agree something big (positive) will have to happen. WMI, I do not understand why so many people are worried about the A/L's. When WMI filed chapter 11, this was the Saturday following the seizure which was on Thursday. WMI stock traded after hours on that fateful Thursday, down to around 16 cents or so. WMI filled out the chapter 11 paperwork on that following Saturday. If they had a lot of WAMUQ stock they would have figured at the price it was post seizure. WMI said they had 32 billion in assets and 8 billion in liabilities, so why on earth would they lie, knowing the truth will be out in three or four months. Wall Street is scared to death of bankruptcy, and quite frankly the majority of Wall Street have lost interest and I consider this the best opportunity I have ever seen on the street. Keep in mind WMI is far from bankrupt and the only reason they entered bankruptcy was to shelter themselves from the illegal seizure and a host of other illegalities. The reason everybody is so quiet is because the people in the know, know this will fly, but they have to go though the process of six to nine months. All one has to do is hold and increase positions when the bashers beat it down and then at some point Wall Street will find out and they will "Make My Day".
WMI, I do not understand why so many people are worried about the A/L's. When WMI filed chapter 11, this was the Saturday following the seizure which was on Thursday. WMI stock traded after hours on that fateful Thursday, down to around 16 cents or so. WMI filled out the chapter 11 paperwork on that following Saturday. If they had a lot of WAMUQ stock they would have figured at the price it was post seizure. WMI said they had 32 billion in assets and 8 billion in liabilities, so why on earth would they lie, knowing the truth will be out in three or four months. Wall Street is scared to death of bankruptcy, and quite frankly the majority of Wall Street have lost interest and I consider this the best opportunity I have ever seen on the street. Keep in mind WMI is far from bankrupt and the only reason they entered bankruptcy was to shelter themselves from the illegal seizure and a host of other illegalities. The reason everybody is so quiet is because the people in the know, know this will fly, but they have to go though the process of six to nine months. All one has to do is hold and increase positions when the bashers beat it down and then at some point Wall Street will find out and they will "Make My Day".
Shortly after WAMUQ filed chapter 11, Washington Mutual's New York ticker symbol(WM) was given to another company whom I can not remember. I have noticed recently on Bloomberg News, Yahoo and others the symbol (WM) again shows Washington Mutual. I am wondering if behind the scenes, the lawyers were able to get their symbol back.If that is the case, there is no question about the common stock being relisted again, thus retaining value and not being totally scrubbed.
Quotes Charts News Research
Symbol Symbol Lookup
News12/04/2008
WAMUQ WASH MUTUAL INC
Trade Research Add to Watch List Detailed News Option Chain
29,772 job cuts announced ? this week [The Philadelphia Inquirer]
MCT Business News
12/04/2008 04:20 PM
New jobless claims drop unexpectedly
AFX Asia Financial News
12/04/2008 01:19 PM
New jobless claims drop unexpectedly
AFX Asia Financial News
12/04/2008 01:18 PM
Ford Equity Research upgrades WASH MUTUAL INC from MOST UNFAVORABLE to UNFAVORABLE.
Investars Analyst Actions - private
12/04/2008 11:44 AM
Washington banks trail industry in key indicators [Seattle Times]
MCT Business News
12/04/2008 11:44 AM
Ford Equity Research upgrades WASH MUTUAL INC from MOST UNFAVORABLE to UNFAVORABLE.
Investars Analyst Actions - private
12/04/2008 11:44 AM
I have to agree all the way to the bank. As the old sane goes, "where there is smoke there is fire", only in this case an inferno. Keep in mind WMI did not file bankruptcy because they were bankrupt, they had to file because of the corruption involving their corporation. When this geiser blows if you are not in it will be too late. This will only move materially when there is a leak or news, so forget about the day to day percentage moves as this means nothing.
Best Bet Currently On Wall Street:
The Washington Mutual stock play is the best bet I have ever seen, when it comes to investing. When you look at the percentage of gain (potentially)versus the loss (3 cents share), there probably is not a better bet at this time or maybe into the future for many years. For WMI not to be pressing for interest ($700,000 daily) on their 4.4 billion and not fighting these delay tactics, speaks volumes for WMI. Everything is in favor of WMI stock being purchased from $4.00 to $15.00 per share through a stock exchange or another interest submitting a bid, but more than likely it will be JPM (possibly WFC) to avoid all future litigation. The delay would not have been so long if they were not discussing a deal. I am sure it will be after the election but on or before December 15th due to the judge deciding the fate of the 4.4 billion. If they wait till after the judge decides, WMI could take the money and sue for many billions and JP Morgan may not want to take that gamble. There would be entirely to much bad press for the JP Morgan and the government. The higher powers who prescribed to this sabatoge will now be wanting JP Morgan to settle this quickly before it covers the world news like it already should have. Go ahead JP Morgan, "Make My Life".
If you can not see the carnage, illegal seizure, manipulation, destruction, shareholders wiped out and all of the other devastation caused by the illegal corruption, then my friend you should sell, leave this board and go sit in the sunshine.
I feel very strongly about a deal of some kind has to be announced before any assets are itemized for the world to see. This may mean another delay or two but something has to happen very soon.
I see WFC taking over WMI, getting the cash, NOL's and the rest of the business for $4.00 to $8.00 a share, assuming the debt, making payments on the preferred stock versus payout. In chapter 11 the rules go out the door and the deal is whatever the majority would vote for. WFC would preserve the ability to sue all parties and recover whatever they can and this would propel who ever owns the stock at that time. There could potentially be some kind of bidding by other parties as well. This is going to get interesting very quick as delays on getting a deal are at or near an end. A deal has to be struck before WMI lists assets and the whole world will find out about the corruption, collusion, illegal seizure and all of the other dirty laundry. A few more weeks of delays is possible, but not any more than that.
WFC will takeover WMI!
I see WFC taking over WMI, getting the cash, NOL's and the rest of the business for $4.00 to $8.00 a share, assuming the debt, making payments on the preferred stock versus payout. In chapter 11 the rules go out the door and the deal is whatever the majority would vote for. WFC would preserve the ability to sue all parties and recover whatever they can and this would propel who ever owns the stock at that time. There could potentially be some kind of bidding by other parties as well. This is going to get interesting very quick as delays on getting a deal are at or near an end. A deal has to be struck before WMI lists assets and the whole world will find out about the corruption, collusion, illegal seizure and all of the other dirty laundry. A few more weeks of delays is possible, but not any more than that.
Bank robbery, extortion, mail/wire fraud,illegal seizure, collusion and a host of other things are suppose to be illegal as well. I am long, hoping for the best but I make judgements on peoples actions and not by what they say.
Postponed? If the chapter 11 date on the 25th is not postponed, this must mean "Merger Monday" or Tuesday. I can not imagine JP Morgan losing the 4.4 billion unless of course the Judge has been pursuaded to take Morgan's side and give the money to them, after all they stole it to begin with. With all of the fraud happening in the finacial arena, this would by no means surpise me, as we know how the largest bank robbery occured with the largest savings and loan bank in the world.
Mr. Fishman is still the CEO. He is laying very low and with good reason. I do not have the link but I have read it in documents posted here. All of the large stakeholders are very quiet. This in and of itself speaks volumes to a very nice settlement. With the largest stakeholders not saying a word and not filing complaint not to mention lawsuits, this means only one thing...NEGOTIATED SETTLEMENT with someone very soon...1-45 days...
WAMUQ NOL's? Does anybody know the answer to this question, as it could make the decision on how much you risk on this opportunity. If WMI cancels existing shares and issues new shares before exiting chapter 11, can they still use the NOL's or does it not make any difference?
Sorry, with doing hours of DD on this, I do not remember where it was other than possibly the Yahoo board last few days.
Thank you for the response, but I was thought I read somewhere during DD that in order to preserve the "NOL" the entity would have to be entirely purchased by another entity or by preserving original shares if wanting to emerge from chapter 11 on their own.
WAMUQ NOL's? Does anybody know the answer to this question, as it could make the decision on how much you risk on this opportunity. If WMI cancels existing shares and issues new shares before exiting chapter 11, can they still use the NOL's or does it not make any difference?