Or #3: Deal now involves JPM and/or FDIC.

That might explain why this is taking so damn long. The other parties are small enough and nimble enough to make decisions on a deal in the month that this has been in mediation. JPM/FDIC would take a bit longer. That might explain the delay.

But then, what the h*ll do I know...

Delayed?

Exactly. If extended, they would likely wait until tomorrow's hearing - like last time.

Gary: I don't think so... but I'd love to be wrong.

Fingers crossed.

Or he left for vacation because the deal had been substantially done and all that was left were a few minor details, details he could address on the road.

As Claw said, we'll know tomorrow.

I'm done speculating. Good luck, everyone. See you tomorrow.

Jack

Difference here is those idiots traded on that knowledge, and, as we all know, got caught with their hand in the cookie jar.

No way they are going to do that again (at least not here, not now).

I say deal will be announced tomorrow.

I think the SNHs will fund a litigation trust to go after FDCI/JPM outside of this court. Other than that, I don't see the SNH's having any affect on either of them to cough up money to end this.

Califano did state that releases were most important to FDIC, and that will cost them, so who knows...

It's entirely possible that a deal has been struck and nobody has leaked it...

Including Nate Thoma... Without him, we'd have been hosed a long time ago.

Claw: I'm interested in your theory. Are you suggesting one of the parties in mediation leaked something that made its way to a MM, allowing the short coverage that was done Friday?

I do agree the trading activity in the P's was suspect, to say the least.

Thanks.

Jack

I agree that most will not be happy with whatever settlement we might see - other than happy with the fact that this nightmare is over and we move on to phase 2, the rebuilding of value stage.

I am going with settlement by 11/22.

Chiron: Are you upping your confidence that a settlement has been reached? (Can't remember which one of your three options that is...)

Jack

Catz (and all): Chiron was referring to a thought my colleague shared with me. There is no deadline, per se. I apologize for the confusion; I'll need to choose my words more carefully.

My colleague was thinking that if SNH were going to submit a pro- forma objection reiterating their past argument that the Bankruptcy court was not the proper venue and that the time for filing had passed, 72 hours would have been ample time. That combined with the fact that SG filed in JMW's court after meeting with the hedgies' lawyers led him to believe that an agreeable compromise has been reached at least on the sniping over appeals. The assumption is that perhaps the firms would rather spend their time in more productive ways (e.g., settlement).

There was no mention of meetings between SG and SNH attorneys or principals in the SG billing for October but I think SG in court stated they had been working (in Nov apparently) and would continued to work with SNH on resolving the the appeals filings. I am guessing they were working on settlement issues also.

Hope that clarifies things.

Jack

Looking good, Chiron. I am cautiously optimistic.

Enjoy your weekend. May next week be a profitable one.

Jack

Claw: Good point, thanks. The presence of an objection does not preclude a settlement from getting done, but I think the absence of an objection is a sign a settlement is, in fact, in the bag.

Per one of my colleagues: If there is no objection today from SNH re. EC cross issue filing then I'd say a deal over IT has been struck.

We'll need to go after them with whatever litigation trust is set up in the settlement.

This is spot on, Chiron. It's hard for most to stomach, because it's not "fair". But it is what it is.

There is always a risk we could lose in an IT trial against the SNHs. Yes, we've got a great case - but it IS possible we could lose. A settlement ensures recovery; going to trial does not. Kind of "a bird in the hand" type thing.

I, for one, would like a "bird in the hand", especially if it starts with preferreds getting upwards of 10-20%, and equity in the new company for Prefs and Commons.

And a litigation fund to go balls-out against JPM for more dough.

GLTA

Jack

I think it gets done by 11/22 so as to take full advantage of NOL's as soon as possible in 2012.

You don't get it - technicals don't apply to this stock right now.

Welcome to my ignore list.

I disagree. Settlement is done, IMO.

Cents: my understanding is that the total of all pref's is $7.5B, which is what I used for a denominator.

I can't remember the face valuse of K's (I don't own any), but you could multiply their face value by 0.166 for an estimated value, assuming the SNH's relinquish $1.25B of their claims. (Again, 1.25/7.5=0.166)

IMHO

Jack

I agree, Chiron. I expect only a portion of the SNH's claims to be bartered away and trickled down to the P's. If half of their $2.5B claims are reliquished, I estimate that to put P's at $166 (1.25/7.5)

It's not full face... but it's a helluva lot better than where the P's are right now.

Jack

Michael: I can't say it better than Catz already has. I concur with his assessment.

GLTA

Jack

After looking at the billings, I think we are finally in the home stretch of a settlement. I am inclined to believe that it gets done and announced by 11/22 - if not earlier.

Temper expectations. Not everyone will be happy - especially the "I want justice", the "$24", and "2x value +" crowds. But this mess will be over and a new company with new opportunities will emerge early next year.

All IMHO.

Jack

Is Lyons' court one that Rosen tries cases often, or ever?

Umaw: I believe it refers to the percent of the reorganized company.

The result in Mirant:

http://www.pjsolomon.com/news/media/Mirant%20emerges%20from%20Chapter%2011.pdf

I trust Ed Sargent to keep Folse in the loop while Folse is on vacation. There aren't many places that are inaccessible by cell phone.

David: I'm inclined to think P's will see both, cash and shares in newco. I don't think there is enough money to pay them in full.
Jack

I don't blame you for waiting for the long term tax rate. Here in CA, the govt takes almost 10% on top of what the feds take, so it's worth the wait.

Fortunately, all my P's are long right now. U's are a different story...

Jack

Clawmann: Your observations, coupled with Folse's absence and the silence of the FDIC, lead me to believe that the deal is virtually done. May not need the entire two weeks - hallelujah if that's the case.

Best to all,
Jack

God, Don, I hope you are right... Sure sounds good.

If that's the case, clawmann, would an announcement be made prior to the next hearing?

I don't think so. Like clawmann, I think all that's left is to dot a few i's, cross a few t's, and announce on 11/22.

GLTA.

Good point. I agree.

I agree, Biz. I'm not saying there will definitely be a settlement announced tomorrow - but it cannot be ruled out.

We had a settlement months ago, before someone "retraded" on it. Sure, lawyers like to milk billable hours... but Walrath ordered this to limit such shenanigans (litigation morass).

Some here think it's crazy to think that a few weeks with a court-appointed mediator will produce another settlement... I don't. The SNH's were dealing with the EC before JMW found a "colorable claim". What, they're going to stop dealing now?

That said, I understand how jaded we've all become. Our hopes have been dashed far too many times.

Fingers crossed for tomorrow.

Jack

Chiron: On what are you basing your predictions? Do you have any experience with court-ordered mediations? Are you an attorney?

Or are you just sharing your gut feelings with us?

Jack

I spoke with my attorney friend about mediation. Unlike Chiron, I am not ruling out the substantial possibility that we have a settlement in hand and are ready to announce it tomorrow.

Consider:

1) Most mediations (according to my friend) take no longer than a couple of days. Yes, this case is complex, so of course it is taking/has taken longer than the average mediation.

2) As clawmann pointed out, settlement offers have been exchanged in the past. We had one before, before one of the parties "retraded" on it (according to Folse).

3) The HF's do not want full discovery on this.

Let's face it - while we all agree that the HF's engaged in IT, the reality is there is a CHANCE that we would lose at trial. Yes, as long as humans (judges and juries) are involved, there's always a chance. The attorney for the HF's should be telling the same to their clients. The settlement we eventually see will reflect that.

Perhaps the reason Folse is on vacation is because his job is done and all that's left is to announce settlement terms tomorrow...

Possible?

Jack