I wanted to inquire as to whether anyone else felt betrayed and insulted when Susheel Kirpalani stated the Equity Committee was "swinging for the fences" in his opening statement?

I don't mean to fan the flames but I would really like to know what everyone thinks.

I've seen it before but I'm not in JC all too often. I work in NYC and go to school in Newark.

I'm right in Hoboken so I would definitely notice that, lol.

Would love to hear them when you have the time. I certainly do NOT hold Califano in high regard.

Haha, I'd love to see a CNBC spinoff called "Desperate CEOs" after this.

Great post and very eloquent articulation of your thoughts therein.

The only point I'd like to raise is that a direct connection was already discovered in an email linking Dimon to Botin of Banco Santander. The media spun the email, of course, but the connection was nevertheless made.

If other direct connections exist between Dimon and other players or even his own cronies, they will serve as the basis for investigation by the examiner. Dimon is brilliant but his hubris may very well be the cause of his undoing. I don't believe Kenneth Lay, Jeffrey Skilling or any of the other players behind the Enron scandal, or even Dennis Kozlowski of Tyco fame, ever expected to be caught - but they were. That's just something to keep in mind.

I have no idea what they use to store, archive or backup their documents. What I do know is that Susman and/or the examiner should be able to catch any inconsistencies that present themselves - and if these inconsistencies are the result of fraud then you better believe the Department of Justice will get involved and an even deeper investigation will follow.

My guess is as good as yours. What we do know is that Rosen has violated the canon of ethics and model rules of professional responsibility by breaching his fiduciary duty to the estate amongst other things. If the WMI board asked him to forfeit his duty in order to accomodate JPM at the detriment of the estate, then it was his ethical duty to recuse himself from the case. He clearly did not and likely has no plans to until he is forced to do so by the court. Accordingly, you really must ask yourself why an attorney like Rosen, who graduated from Suffolk Law and became partner at a successful firm like Weil Gotshal, would risk not only his admission to the bar and reputation in the legal profession but also all of the hard work that probably earned him that title and established his career - all for the interests of a client. I think he must have some personal interest in the outcome of this case if he is willing to sacrifice so much.

As for the WMI Board Members - well, that's a given. We know they've been compromised and corrupted, hence the reason we want to hold a shareholder meeting to oust and replace them.

My pleasure, Uzual. This is a high-stakes game of poker in the Casino Royale. All bluffs have been called - now we just have to see whether JPM and the FDIC fold.

Don't forget that the parties asked the court to direct the examiner to release periodic status updates. Depending on what these updates reveal will help us determine the course of the investigations and whether the examiner has sniffed a trail lined with the foul scent of Rosen's, Bair's and/or Dimon's malfeasance.

I think you're on the right track with respect to their window for a quick and fair settlement. My guess is that our adversaries and their counsel are burning the midnight oil either (a.) running the numbers and making offers to the EC or (b.) shredding any/all materials they can, while crashing their own servers to impede the examiner's investigation. My only contention is that your window should be extended through and until August 6th - when the appointed examiner files a document itemizing the scope of his or her investigation with the court. I wouldn't be surprised to see JPM wait until the examiner is appointed so it could try and pay him or her off in the same way it might have paid off Rosen. We are dealing with corruption and power at the highest levels. The window for settlement, IMO, is up until the examiner files that document - because the FDIC, JPM and WGM will be in quite the predicament once they realize the examiner cannot be bought and the EC (with the assistance of the U.S. Trustee) is out for blood.

Good point, but even still, if the examiner uncovers evidence sufficient to prove business tort claims against JPM then all bets are off and JPM would be liable to WMI for compensatory and likely punitive damages.

I found that unusual too - why wouldn't counsel for JPM try to get its voice on the record for this?

I've really adopted the belief that the FDIC is going to take the fall for most, if not all, of this. I also agree with Illenes in regards to Califano's attitude and professionalism - the man really is a disgrace and isn't even in the same league as Nelson or Susman. I called him out on a few statements earlier in the day while the hearing was taking place - I wish I could have been there to personally express my feelings.

Thanks for representing us today.

Lets hope it's the latter and not the former of the two.

I have no idea who they will pick. Based on my understanding, the various committees will submit proposals from which the UST will make a selection.

Haha, I am flattered but in no way qualified enough to carry out the responsibilities of a federal bankruptcy examiner.

That really means alot, thank you.

The unfortunate reality is that I'm having a difficult time finding a post-graduate job. I wish I could land an interview, let alone a job, but I'm having no luck. I believe everything will work out in time but in the interim I am finding myself more and more frustrated. A favorable settlement or judgment would really make things easier and open up a few options for me as I wouldn't be burdened with the massive school debt, but I don't want to rely on something that has yet to happen. Only time will tell!

MY THOUGHTS -- SEE BELOW

That's not entirely accurate. The parties were very much afraid of the examiner - they simply moved to "Plan B" and sought to minimize the scope of the examiner's investigation as well as the timeframe through which the examiner could conduct his or her investigation. The reasons they moved to a "Plan B" are pretty obvious. They were well aware of the fact that the EC demonstrated more than enough cause for the appointment of an examiner - so arguing against it would have been a complete waste of time. The attempt to minimize the examiner's scope was made in effort to reduce their exposure to liability. If they could get away with a narrow investigation, the appointment of an examiner could still prove to be significantly cheaper for JPM/FDIC than a very expensive settlement (as the EC is probably demanding). Moreover, by limiting the timeframe of the investigation, the parties can use various tactics to delay the investigation while moving forward with the sham settlement and DS/POR that they're so vigilantly trying to confirm.

Judge Walrath clearly decimated their "Plan B" by allowing a virtually unlimited scope of investigation - including an assesment of the settlement, asset valuation and potential claims against JPM/FDIC - and expanded on the narrow timeframe put forward by our adversaries while clearly stating that the settlement and DS/POR would not be confirmed without the examiner's report. If this isn't enough for everyone to digest, they should be made aware of the fact that Judge Walrath was well within her discretion and jurisdiction to direct the UST to appoint an examiner - and her decision is not appealable. Accordingly, our adversaries have exhausted all of their options and must now weigh the cost of further exposure by the examiner against the cost of a true global settlement that includes equity. Time is not on their side either because based on the timeframe set forth by the court, Judge Walrath wants this resolved expeditiously.

Now we must hope that the UST appoints the best examiner possible. I wouldn't be surprised to find JPM try to buy him or her off in the same way they bought off Rosen and the WMI board. The UST has my utmost confidence - as does Susman, Nelson, Willingham and the EC.

Thank you, Diane. That means alot.

I think Califano is just as shady (if not shadier) as Rosen.

It's not surprising - in fact, it should be expected. They're going to drive the PPS down and then buy on the cheapside up until and through the Judge's appointment of an examiner.

Precisely.

God, they're driving the PPS down.

Exactly - which is why scope and time are of the utmost importance right now.

I think Walrath will grant broad scope but I understand the creditors' argument and they are entitled to their money. However, the culpable parties here are the FDIC and JPM and if the investigation yields valuable business tort claims, the creditors will be compensated with interest for the delays anyway.

The settlement isn't the only thing that will be investigated. The lack of investigation on these valuable tort claims is very suspect and the suspicious collaboration between WMI and FDIC/JPM is also quite curious. IMO, the examiner will have the authority to pry into all of these issues - and I hope that either creates massive liability for JPM/FDIC or a settlement offer beyond our greatest expectations.

His first sentence was a joke. He said we never discussed why an examiner was being appointed now. The idiot clearly didn't hear Nelson address that by saying no investigation of the claims has ever occurred. What a twit. I'm not even out of law school yet and I think I would be ready to rebut his statements.

They sure are and I couldn't be more amused. I don't think they got anything done since the last hearing. It's clear that are only willing to allow the examiner to conduct an investigation limited solely to the settlement - not the claims - and that's about as far as they've come to "resolving" this.

I think we'll see something happen once Walrath appoints the examiner with broad scope of time and power to conduct his or her investigation. At that point, as I said before, we might as well go to trial - because I want JPM/FDIC/WMI to go down and fall hard for their hubris and defiance of the law.

LMAO - He's threatening to withdraw the settlement if the examiner goes forward. Their agenda couldn't be more clear. Appoint the examiner and we'll get our settlement. That's it.

Can't wait to see it. Thanks for the update, Fish!

We're going to get the examiner. There is no merit in the FDIC's or debtor's argument in opposition. It couldn't be more clear. The appointment of an examiner with broad scope and time to investigate the claims is a prerequisite for settlement.

That's just liquidated claims. The unliquidated claims could be worth much, much more.

Indeed. Did anyone ever expect them to publicly reveal to the court that they screwed up, breached their fiduciary duty to the estate and engaged in fraudulent activity (or helped JPM cover up their activity)?

They're trying to make themselves appear to be in support of the examiner and an investigation to maximize the value of the estate - because they would surely look suspicious if they didn't - but at the same time they're trying to raising doubts as to the effect the examiner would have on the estate if nothing is found and hoping the judge will allow them to continue with the DS/POR.

I can't wait to hear Susman/Nelson and hope the judge tells Rosen to take his DS/POR back to hell and appoints an examiner with a broad scope of examination. Lets see what happens.

I would love to see the EC, WMI and FDIC triple-team JPM. I wonder how quickly we would see a settlement then, haha.

Notwithstanding the obvious ethical violations and conflicts of interest we've all witnessed over the past two years, I am still in awe as to how these "professionals" could get this far through manipulation and blatant abuse of the judicial system.

I am in an interesting predicament because the outcome of this case is going to determine whether I can maintain any faith in my own profession. If we prevail, I will be in a position to make many dreams come true - one of which is to become a good legal practitioner. If we fail, well, who knows what my destiny will be.

That was Judge Walrath's denial of the first motion for appointment of an examiner - not the second one that was subsequently filed by the EC upon Walrath's reconsideration.

You scared me there for a moment.

Thanks Venom, much appreciated.

If this works out, I'd like to obtain some experience and then eventually start my own practice.

Guys, I hope I'm not getting ahead of myself here but I want to let you all know that it has been a bittersweet pleasure joining you in this battle against government corruption and Wall Street greed. I hope for many of us that tomorrow marks the end of it all and the beginning of a new chapter graced with good fortune, comfort and the means to make our ambitions come true.

Godspeed and good luck to us all.

Correct, that's the document.

Absolutely, a civil settlement will have no effect on the commencement of criminal investigations and liability thereof.

Our adversaries are treading on very, very thin ice right now - and this poor judgment because the water is cold, dark and deep.

I'm surprised the Rockefeller family hasn't exerted any of its influence after a statement like that. After all, it is very well vested in JPM.

I wouldn't be surprised.

I'm sure Susman will give them the professional courtesy once again as he probably did in the last hearing. The question is whether they will repudiate his offer this time as they did the last.

They can settle at any time - regardless of whether the examiner has commenced his or her investigation.

BR already dug himself a shallow grave. We're just waiting for him to jump in or join JD and SB in theirs.

Thanks Fish!

School is going well. I did really well on my bankruptcy final but I'm starting to stress over my remedies exam that I'm taking on the 29th for my summer session. One of my colleagues here at the firm told me about a database that I could use for submission of my paper to various journals and law reviews - so hopefully I'll have some luck getting the paper published in the coming months.

More than anything, I'm hoping to see this case settle before the fall. I have a heavy courseload and a very unflexible boss.

How have you been, old friend?