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Based on the following statement, (among others) from the TPS objection I suspect the preferred shares will open quite a bit higher on Monday.
89. . . . As such, the only potentially applicable exception to the general prohibition against postpetition interest is the so-called "solvent debtor" exception of Bankruptcy Code Section 1129(a)(7), which in essence, provides that creditors are entitled to postpetion interest "at the legal rate" before interest holders can retain any value under a plan.
90. . . . Rather, where a debtor is solvent, the applicable rate of interest is the FJR, not individual creditor contract rates."
102. Critically important is the fact that, if interest were to be paid at the FJR, rather than the various contract rates, it would free up approximately $700 million capable of distribution to other case constituents - more than enough to get classes 19 and 20 a meaningful recovery through the value "waterfall."
FJR = Federal Judgment Rate of interest (from #86)
This concludes a discussion regarding the payment of interest to creditors. This is the so called "$30 million" a month cost the debtors have consistently referred to as a reason to settle while there is still value in the estate.
In short, there should be zero post-petition interest paid to creditors if the estate is not solvent. And if interest is paid it should be at the FJR. So with the FJR applied an additional $700 million would be available.
We're in the money!!!
This is getting good.
http://www.kccllc.net/documents/0812229/0812229101119000000000071.pdf
To me the interesting part was paragraph 8;
"To the extent not inconsistent with the arguments raised herein, Rotella joins in the objections filed by creditors and/or parties of interest to the plan."
It appears to be more than self-protecting. He likely owns common stock as well and knows there to be more value.
It's on!
My favorite line so far:
"The Debtors failed to investigate the claims sufficiently to be able to value them for purposes of settlement, and instead were seduced by an early offer from JPMC that would provide a rich recovery for certain of the Debtors' creditors. Rather than curing the problem with a thorough investigation into the claims, the Examiner had insufficient time and relied on unsworn and self-serving statements from likely co-defendants as primary evidence. The fundamental work necessary to value these claims, and thus judge the reasonableness of the proposed settlement, has not yet been done. As a result, the Plan should not be confirmed."
Emphasis mine. See page 21 of EC objection to the plan, end of first paragraph.
I know the date was pushed back, into next week I believe, if that is the originally schedule deposition.
No that is not what I said.
I agree completely - Oct 18th applies only to the voting.
If you own shares and there is a settlement you will be paid no matter when you bought them (as long as it is before the settlement!)
The par value mentioned is in reference to the new shares in the proposed re-org, (available to be purchased by the creditors). The notice is dated Oct 29th. This has been discuss previously on the common board.
They wouldn't still be trading if this was true.
The only thing Oct 18th did was establish the cut-off for voting on the POR.
If/When there is a settlement or payout to WAMPQ shares if you own shares as of that settlement you'll be paid.
Don't under estimate the power of the people united for one common purpose. The more that we make our voices heard the more they (the press, the judge, and the politicians) have to listen!
This board has been very focused on voting the past few days. It will be good to have that completed and get back to the actual happenings in the case.
I'm currently working on my objection letter to the POR. I think we need to flood the docket with objections once again. This will help assure that the POR will not make it.
We have a responsibility and an obligation to vote, that's part of being an owner and living in a free country.
VOTE I SAY!!!
In the end I'm of a similar opinion that the current POR will not stand. Part of bring that to an end is using our voices, and voting is one of the most important ones we have.
The letter from EC recommending voting against the plan!
As for opting in or out - I didn't elect anything. Not sure how that will come into play when all is said and done. But mostly, I'm not willing to lock my shares up until every last detail is sorted out.
Call TD Ameritrade Corporate action or Re-org division. The first person was less helpful than the second, but sent me via my account messaging the ballot on-line and a number to fax it back.
The Re-org division can be reached at 800-669-3900
Yes, I received them also. They are just further amendments to the plan. Not a significant change in our payout, and certainly no where close to a change that would make my vote change. I'm rejecting this SOB!
Any suggestions on getting the ballot? I'm at TD, haven't received a ballat and I called today and they said they didn't know anything about balloting. The indicated if there was information it would be emailed to me.
I like your thinking. This makes some good sense.
The report certainly has a canned feel to it. As I was reading it over it was more like it was refuting the possible claims without making any real assertions at all.
I have felt that JPM and FDIC need to come out looking good to the public, even if we know differently. This may be part of the larger charade needed to bring this to a real conclusion.
I look forward to the quietly putting money into my account part.
The essence of the change:
JPM is offering a maximum of $50M for a face value of $4B to the Reit series in exchange for dropping their claim. This will be paid in JPM stock. There is nothing good about this. JPM is simply trying to eliminate the Reit series or whomever is willing to accept 1.25% payout and go away.
See page 2 for more detail.
http://www.kccllc.net/documents/0812229/0812229101029000000000011.pdf
I don't recall for sure, but thought the offer was for wamu stock, now the shell company of WMI. That would have included everything.
And yes, I agree that JPM has gotten a better deal than just the price per share. However, the other outstanding liabilities, such as the WMB bonds at the FDIC may or may not also have to be paid for seperately. Whether JPM pays the bondholders or not wouldn't affect our price per share payout unless we then had to turn around and pay the bondholders to make it happen.
strikehold
The $8 per share offer you mention was prior to the TPG investment - i.e. half as many shares. So a $4 per share offer right now would be approximately equal to the earlier $8 per share offer.
They had one session of coming to an agreement after the "hot" doc from Susman in closed chambers. Everyone, except bondholders were suddenly in favor of the examiner.
I suspect that once the examiners report comes out and says, we found these assets, and value the potential lawsuites at XXX: A>L, boom everyone jumps back on the bandwagon of equity.
Okay, maybe I'm dreaming that they'll jump on the bandwagon, but I suspect they'll play along for the most part to maintain their relevence and influence on the outcome.
And if someone does say what about the toxic assets . . . .
JPM wrote them down to zero - all mortgages. That's 30B in mortgages now on their book at ZERO! They may not be worth face, but they are worth a whole hell of a lot more than zero! Then their is the value of the branches, the deposits and the market share and presence in new markets . . .
Good things are coming!
Examiner!!!!!
Also, good to hear the POS POR is pushed out a couple more months!
Will still need to push on getting full discovery on JPM. This may be the key that ultimately leads to a settlement.
Looking good though!
Anyone wanting a good picture of the Trust Preferred Securities - see page 14 of the Complaint for Declaratory and other Relief.
http://www.kccllc.net/documents/0812229/0812229100707000000000001.pdf
Thanks for posting Uzual!
Happy to Help!
Fish, I agree wholeheartedly.
However, I do need to make one clarification.
JPM paid FDIC 1.888B - that is already taken into account when JPM booked their negative goodwill of 2B.
So your profit, aside from the mortgages still being at zero basis, is actually 2B!
Let's see some of that heading back to WMI, not WMI sending more money to JPM. The record will bear this out in the end.
I certainly wouldn't advise going to H&R Block for tax advice. They are for preparing basic returns. They might be more up on the earned income credit and child tax credit than I. However, I'd like to think my Master's degree in Taxation would give me a leg up on them in most other aspects.
Here are a few exerpts from the IRS Regulations 1.165-5
"For purposes of section 165 and this section, a security that becomes wholly worthless includes a security described in paragraph (a) of this section that is abandoned and otherwise satisfies the requirements for a deductible loss under section 165."
"To abandon a security, a taxpayer must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for the security."
Or if you prefer laymans language:
"Worthless means zero value.
Before you can use this tax break, the stock must be totally worthless.
Just because a company is in bankruptcy, or its stock isn't trading, doesn't necessarily mean it's worthless. If it's worth even a few pennies, it still has value in the eyes of the IRS."
http://www.bankrate.com/finance/money-guides/taking-tax-advantage-of-a-worthless-stock.aspx
I don't know where you were reading. But TPG could only have taken a write-off on their taxes from a loss in Wamu if they sold their shares. I'm quite confident they would not have done any such thing. In fact there is a restriction on sales of shares for those who hold greater than 5%.
Even if they may have bought bonds to hedge their invesetment (and I don't know for a fact that they have) they still wouldn't give their shares away just to receive a tax write-off before this is all over with, even if they could.
Jestiron,
I was at the hearing today with some of our fellow shareholders, including DrRugby.
Based on the questions being asked by the Judge I can draw a couple of conclussions.
1.) This is a hot potato issue that everyone is being very careful in making rulings.
2.) Judge Walrath is more familiar with the details of the lawsuit and may be more appropriate to make a ruling on the shareholder meeting.
3.) That if Judge Walrath didn't want to make the ruling it should head back to State court in Thurston County where originally filed.
4.) Also, if a shareholders meeting may likely change the landscape of the proceedings he felt it may be more appropriate for Judge Walrath to be the one making that decision.
The judge also pressed the Debtors counsel regarding why they were in his court, especially if this wasn't about delays. No real good reasons provided other than they have already served notice of deposition to EC and Willingham. (Judge indicated that would be an option in State Court as well.) The only other reason given was under rule 105 (I believe) the debtors may have a little more protection from being forced into a shareholders meeting, that didn't sound like it was an available remedy in State court.
I'll chime in more later. I'm back at the office trying to get a little work done!
I'll be there, looking forward to packing the court room!
I'm happy to meet with others prior to the hearing.
Good times are upon us.
Go WAMU!
I say we agree to this, with the caveat that all information will be provided after they have provided all of their work product, and help to get depositions of JPM and FDIC.
Let's work together!
Ha Ha Ha!
Not going to happen I know, but would be funny.
Now that's funny!
I agree, leave Rosen and Weil in.
However, part of the reason I think so: We will have our shareholders meeting (unless there is a really good settlement) and we will replace the BOD. Then Rosen and Weil are still representing the Debtors, and the BOD can look at all the records. They will make sure that the current BOD and the value of the claims are brought to light.
It would be awesome to see Rosen have to do an about face representing the Debtors with a new BOD!
Just my thoughts, but things are really looking good!
Go WAMU!
I concur!
I have the thought that as he's arguing about who the client is, she is setting him up. She is going to say, well then I guess I need to award the shareholders meeting, and they can choose to work with you, or a new board, who will certainly have access to all of the information!
This is indeed looking good!
She has certainly indicated we are getting at least one of the items we want/need! And maybe more!
They probably have some analysis that says to the BOD that you should settle this at any price. You are totally liable as well.
I think she is setting Rosen up to rule for the shareholders meeting!
He's trying to argue that we aren't the client, and she is going to say, well, we'll see about that.
This is getting good!
I'm pretty sure as a shareholder you are free to stand and be heard.
However, if you filed a letter of objection as many us did, part of that was reserving your right to be heard before the judge on this matter. This is why some of just received a Fed-Ex copy of the agenda in the mail today! So if you filed, I don't think you can be denied a chance to speak. It also seems that THJMW seems to be very lienient in letting people speak out.
I would love to join you all, but I'm in Seattle, and won't be able to make it out.
I look forward to hearing from you.
Wishing you the best!
Go WAMU!
They sent you (and all of us who filed an objection) an agenda because by sending our letters of objection in, we reserved the right to speak in person before the judge prior to approval/denial of the disclosure statement.
In short, no you don't need to do anything, but if you would like to speak, let the court know, and show-up! This is our voice, and we can use it.
I look forward to tomorrows hearing and seeing some justice!
Go WAMU!
I appreciate all of your effort, there is a lot of information to keep straight on this case.
I do most of my communicating off-line. Being in the Financial profession, I have to be a little bit careful about information being construed as investment advice.
Best to you and all the longs. The wild ride continues, next week will be an exciting one.
This is actually summary judgement on the hearing for the shareholders meeting, not the 4B turnover.
They do tend to run together. I don't know that anything has been pushed forward on getting the judge to rule on the 4B, which I think needs to happen, like now.