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Close to it's all time high in five years, same float so I do not see anything here that is not apparent from last five years samo samo to me.
I believe that is seven years and we are not there yet only three years this September.
Hedgies need to start sweating, they are in bed with Uncle JPM too bad they are all going down now boys, katie bar that door girl.
Funny no mention of ILNS in this article just ELAN from Dublin. Interesting.
You are correct, but I have been disappointed before as well. GLTA here. Thanks.
I'm with diamond guru on this one two times the value from the original offer put on the table of $8 pps times 2 is $16 at a minimum, the judge thought can make it more as they deem necessary due to the takeover and its overall ramifications to the shareholders and if Susman has had more information provided to his team and there are criminal charges that will be involved in some other settlement or an offer going out to the shareholders than these numbers could range from the original $8 up to the sky is the limit based on who wants to stay out of jail or a jury trial in the end. Money talks and s.... walks. GLTA here. So it is really anyone's guess.
Time to start shredding documents or they already have in 2008 cuz they knew scamerino would someday be discovered. Oh Well enjoy GS.
I am sure these are instigated shakes scare tactics to move weak hands out of this stock. Don't be fooled folks, they will try anything to steal from you now. Be aware.
With this great news everyone just needs to hold on and of course buy more shares, this will either skyrocket or a buyout will come from Big Pharma soon. No brainer here folks worldwide patent, done deal.
Heck yes they took it down awhile ago with they spewed that commons would get nothing, the stock dropped that day like a rock. Where is the Feds to arrest that person for stock manipulation or the SEC, no they give leeway to rich criminals. I say lock them all up after they pay us quadruple our losses plus stock full in the new company.
"Shares" sorry, Not sure how that works when phantom shares become part of or not part of a R/S situation. Somewhere a valuation has to come from real shares not phantom ones.
HOw exactly do you R/S shazes that do not exist in the marketplace, tell me.
Wang, good post and reminder here of valuation considerations and values lost by equity holders here. These are very strong points made in this document that Susman and folks should be very aware of this information. This really leads one to believe the valuation could exceed the $12 to $24 being touted here, we are underestimating perhaps what is a reality of higher PPS overall based on the facts in this linked document.
It is interesting that they mention in here the $700 billion bail out monies to support JPM but not WAMU to prevent it's takeover. Goes to show you their intent on putting WAMU out of business so JPM could reap both the rewards of the TARP and the WAMU assets. Total high crime here folks. Unwarranted takeover and buyout of a financially stable firm just JPM needed that presence in the WAMU territory. Thats it, Dimon needed another pin on his lapel stating he took over WAMU for a song. Now he and JPM and their partner the FDIC will pay big time, Susman do not under value what you have here bud.
Agreed. FDIC apparently though did not want the same transperancy they speak of with the WAMU case, they wanted things hidden from the public so their token bank JPM could profit from it and garner control in the West where they held little or no presence. It was perfect for JPM to get this deal and FDIC knew it all along, can you say conspiracy. This will get resolved but no rich criminal/crooks will go to jail regardless of the facts.
More about investing into bankruptcy stocks, Blockbuster et al.
Blockbuster Stockholders Hang on to Test Steep Bankruptcy Odds
By Tiffany Kary - May 20, 2011 12:01 AM ET .
.Blockbuster Inc. (BLOAQ)’s stock must be worth something, according to Ron Krenn, a 48-year-old day trader in Daytona Beach, Florida, who hopes to profit on the equity of what was once the world’s largest movie rental chain, seven months after it filed for Chapter 11.
He’s not alone. Since Sept. 23, the date that Dallas-based Blockbuster declared bankruptcy, the stock price has ranged from 4 cents to 23 cents a share, with volume averaging 5.46 million shares a day.
Krenn and others who buy stock in bankrupt companies such as Lehman Brothers Holdings Inc. (LEHMQ), Washington Mutual Inc., and Borders Group Inc. hope there will be money left over for equity holders after all the debt is repaid. It’s an increasingly risky gamble, Bloomberg Businessweek reports in its May 23 issue.
Bankruptcies are less likely than ever to return anything back to stockholders, according to a new study. Once a company files for Chapter 11, creditors are paid first in order of their seniority, with shareholders coming last after senior lenders, unsecured creditors, and holders of preferred stock. Unless creditors are paid in full, shareholders get nothing. If the company reorganizes, any stock in the new company usually goes to creditors.
“Research shows shares are overpriced in bankruptcy, even though it’s often already been decided that equity will get nothing,” said Lynn LoPucki, a bankruptcy law professor at the University of California, Los Angeles. The most common reason is a misunderstanding of the way the law works, he added.
Declining Recovery
Of 41 bankrupt companies that announced reorganization plans in 2009 and 2010, only four delivered returns to shareholders, according to a study by Andrew Wood, a student at UCLA’s law school who works with LoPucki.
Of the companies that went through bankruptcy from 1991 through 1996, 44 percent had returns for shareholders. The figure was 78 percent for those that went bankrupt from 1982 to 1987.
“The number of cases in which equity makes more than a nominal recovery has steadily declined since approximately 1987,” wrote Wood. The study cites an increase in the amount of secured debt carried by companies as one reason for the decline in shareholder recoveries. Wood also found a decline in recoveries for unsecured creditors.
Beat the Odds
Still, penny-stock investors such as Krenn sometimes do manage to beat the odds, LoPucki said.
“There are lots of bankruptcies where shareholders have had recoveries,” LoPucki said, citing Tronox Inc., Tronox Inc., a producer of titanium dioxide pigment, which gave shareholders 5 percent of the new stock when it reorganized. Tronox trades at about $133 a share, up from $123 a share when the company emerged from bankruptcy on Feb. 15.
The study also showed that 90 percent of cases had “nominal” recoveries, or those that gave old shareholders warrants, or rights, to buy new stock.
Krenn said he made money by buying shares of Pilgrim’s Pride Corp. in bankruptcy. Pilgrim’s Pride gave 36 percent of its new equity to “stockholders existing immediately prior” to the reorganization, the company said in 2009, the year it emerged from Chapter 11.
Krenn, who bought Blockbuster for 6 cents a share in February, objected in April to a report that said Dish Network Corp.’s winning bid for Dallas-based Blockbuster left nothing for shareholders. He cited the company’s foreign assets, the fees being paid by franchisees and the value of its net operating losses to support his view that the company must be worth more than the $320 million that Dish bid.
Shareholder Group
Paul Rachmuth, a bankruptcy lawyer with Gersten Savage LLP representing Blockbuster shareholders who tried to argue for a recovery in the case, said the stock’s value has little correlation with news in the case. “Shares are still trading at a positive value, and on the day all of Blockbuster’s assets sold, effectively removing the ability for them to have a recovery, the stock went up by 10 percent,” Rachmuth said.
A group of seven shareholders represented by Rachmuth hasn’t officially disbanded. Since Dish announced its offer would leave no value for equity, there’s been no litigation that would challenge that, however, Rachmuth said.
Yet stock-trading message boards such as Yahoo Inc.’s are filled with posts about the promise of the stock, touting business reasons such as the way the company compares with online rival Netflix Inc. and news that executive Michael Kelly would head Blockbuster. On May 6, about 15 messages debated the idea that the stock was a “strong buy” based on such issues.
Finality for Shareholders
Finality for shareholders doesn’t come until a company files its disclosure statement, which details the terms of recovery for each class of creditor. Until then, secured creditors and unsecured creditors will fight over the company’s worth, investigating potential lawsuits that could bring money into the bankrupt estate.
“I’ve never seen a company say independently from its disclosure statement that they will cancel shares,” said Matthew Morris, a bankruptcy lawyer at Wilmington, Delaware- based Grant & Eisenhofer PA. He noted that they’re under no obligation to do so, and haven’t breached any duty to shareholders as long as they haven’t issued false information.
Short Positions
Meanwhile, short positions need to be worked out, causing some confusion; Krenn said May 5 that Blockbuster’s rise indicated to him that news is on the way. Short interest for the most recent month isn’t yet available.
When investors who shorted shares -- or borrowed them to sell them with the expectation that they can buy them back at a lower price to turn a profit -- need to cover their positions, it could result in a “short squeeze” or run-up in price related to a lack of supply.
Opaque court proceedings can also mislead shareholders. While bankruptcy proceedings are theoretically open to the public, creditors haggle over a company’s worth behind closed doors, and reports that value the company’s assets aren’t made public.
“I kept Googling ‘Blockbuster bankruptcy,’ and couldn’t find information,” said Jon Becker, 53, who owns a grocery store in Miami Beach, Florida. After buying shares for 10 cents each in February, five months into the company’s Chapter 11 bankruptcy, he was still holding them in April, when Dish bought the company’s assets. Even Rebecca Bauman, his 41-year-old girlfriend with a brokers’ license, who had already lost thousands on the stock, couldn’t persuade him to sell.
Some Warning
Becker said he doesn’t blame anyone, but can’t believe there was no flashing on his screen to differentiate Blockbuster from other stocks that he buys on E*Trade Financial: “It’s a different category than normal risk,” he said. “If it’s foreseeable shares would go to zero, I would think the powers that be would flash something -- some kind of warning, maybe in more than one language.”
Companies don’t have to offer such warnings, said Nell Minow, editor for GovernanceMetrics International, a corporate governance research company in New York. In fact, companies often deny the possibility of a bankruptcy right up the day they file, as they’re also bound to protect their own interests, and those of creditors, she said.
“This is why people shouldn’t be retail shareholders,” Minow said. “They don’t do their homework and sometimes they pay the price.”
Icahn
Even sophisticated shareholders can lose money. One of Blockbuster’s biggest shareholders, billionaire Carl Icahn, also a lender to Blockbuster and former director at the company, still held 4.15 million shares, or 3 percent of the stock outstanding, as of April 2010, the most recent filing according to Bloomberg data. Icahn didn’t return a call for comment.
Icahn had supported a deal from the outset of the bankruptcy under which there would be no recovery for stock. Though that plan wasn’t followed, the company warned shareholders online: “As you may know, when a company files for Chapter 11, its primary obligation shifts to maximizing the value of the company for its creditors. Shareholders of a company in Chapter 11 generally recover value only if the claims of the secured and unsecured creditors are fully satisfied.”
Blockbuster’s Chapter 11 bankruptcy petition in September listed assets of $1.02 billion and debt of $1.47 billion. When it filed, it had 5,600 stores, including 3,300 in the U.S. Dish hasn’t decided how many stores to keep.
“My thought was, this is Blockbuster, it will come back,” Becker said. It didn’t. He finally sold at 7 cents a share.
FDIC, Lehman Brothers, New Law could have provided shareholders larger piece of the pie here. See below.
A new report by the FDIC states that Lehman Brothers Creditors would have recovered 97 cents on the dollar "by having a rapid, orderly and TRANSPARENT sale of the company's assets".
Lehman creditors would've got more with law: FDIC
"WASHINGTON (MarketWatch) -- Under the Dodd-Frank bank reform law, Lehman Brothers
creditors would have recovered 97 cents on the dollar rather than the estimated 21 cents they
have, the Federal Deposit Insurance Corp. said on Monday in a report. The FDIC concedes that an
orderly liquidation "would have been incredibly complex and difficult," but the FDIC said that had
it happened under new laws, the outcome would have been "vastly superior for creditors and
systemic stability in all respects to the bankruptcy process as it was applied." Through February
2011, more than $1.2 billion in fees have been charged by attorneys and other professionals
principally for administration of the debtor's estate. The FDIC report concludes that Title II of the
Dodd-Frank Act could have been used, had it been in effect, to resolve Lehman by having a rapid,
orderly and transparent sale of the company's assets."
I realize we have quite a different animal here based on how we were forced into bankrupcy by others in the world but below is how Judge Gerber determined proper valuation for the Chemtura bankruptcy case from Equity Holders.
On March 18, 2009, Chemtura Corp. and 27 of its affiliates (“Chemtura” or the “Debtors”) filed chapter 11 petitions in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Debtors produce specialty chemicals, polymer products, crop protection chemicals, and pool and spa chemicals. Chemtura has operations in the United States and Canada and holds direct and indirect interests in more than 140 nondebtor affiliates worldwide.
On October 21, 2010, Judge Gerber issued a lengthy decision on the confirmation of the Debtors’ plan to emerge from bankruptcy. The plan was supported by virtually all of the creditors, but was strongly opposed by the equity holders. The primary objection to confirmation was that the distributions to bondholders and most other creditors, which included cash and stock, undervalued the Debtors, leaving equity with too small of a recovery. Given that the primary topic at issue in this case was the value of the Debtors around which the plan of reorganization was based, the majority of Judge Gerber’s decision focused on his evaluation of the financial experts that provided testimony on the valuation of the Debtors. In addition, Judge Gerber discussed his views on the credibility of the valuation experts given their roles and fee structures with their clients.
Evaluation of Expert Analysis
Determination of Total Enterprise Value
The most critical argument in this highly contested matter was the determination of the enterprise value (“EV”) of Chemtura that was used in the Debtors’ plan of reorganization. In support of their cases, the Debtors and the equity holders both hired experts to testify with respect to the valuation of Chemtura. The valuation methodologies employed by the experts consisted of a Discounted Cash Flow Method, a Comparable Companies Method, and a Precedent Comparable Transactions Method. It should be noted that the expert for the equity holders did not compute actual valuations based on the latter two methods, and instead used them only as a check on the reasonableness of its Discounted Cash Flow analysis. This methodology was looked upon very unfavorably by Judge Gerber in his decision given the facts and circumstances in this case.
Discounted Cash Flow Method
There were many similarities in the application of the Discounted Cash Flow Method (“DCF”) by the two experts, including consistent projections and required rates of return. The one significant difference in this analysis related to the estimation of the terminal value of Chemtura. The debate over terminal value was driven by what level of terminal EBITDA was appropriate to consider when estimating the value of the Debtors. The expert for the equity holders applied its concluded terminal multiple to the EBITDA for the last year of the forecast period, while the expert for the Debtors applied the multiple to a mid-cycle, or normalized, EBITDA given the Debtors’ cyclicality.
Chemtura was operating in a cyclical industry. Further, Chemtura’s CFO admitted in sworn testimony that the projections were aggressive, as the long-range plan included projected performance that had never before been achieved by the Debtors. As such, applying a multiple to the height of Chemtura’s projections with no consideration given to the cyclicality of the business, or the potential for a downturn, was deemed unreasonable in this case.
Giving some insight into his thoughts on this methodology in general, Judge Gerber stated, “For the terminal value calculations, using the cash flows in the last projected year is not just common, but the more traditional approach (at least before considering the cyclicality of the company’s business).” Judge Gerber also stated, “In this economic environment, relying on the very high terminal value in the last year of an admittedly aggressive string of growth projections is in my mind too aggressive. In a more stable economic environment, I’d likely consider use of the last year’s cash flows for determining terminal value to be perfectly ordinary, if not also preferred. But I don’t think that the present economic uncertainties permit an analysis that is so subject to assumptions that are so optimistic.”
It can be interpreted from the Bankruptcy Court’s decision that the methodology employed by the expert for the equity holders would normally be considered common practice. However, an expert cannot simply rely on standard methodologies if the company being valued is subject to special circumstances that impact value (e.g., operating in a cyclical industry or operating under overly aggressive projections).
Comparable Companies Method
The primary difference between the experts in the Comparable Companies analysis was the criteria used for choosing comparable public companies. The primary factors under dispute were location (i.e., foreign vs. domestic) and size. Further, the expert for the equity holders did not actually have a conclusion with respect to the Comparable Companies analysis. This was disappointing to Judge Gerber, as he stated, “I consider Comparable Companies analysis to be somewhat more meaningful here than either DCF or Comparable Transactions analysis, because it’s less susceptible to uncertainties in projections (in the case of DCF) or extraneous factors such as control premiums, synergies, or bidding wars (in the case of Precedent Transactions).”
With respect to location, Judge Gerber held that it was appropriate to include foreign comparable public companies in the valuation of Chemtura for the following reasons: 1) they operate in the same markets; 2) they make similar products; 3) they are subject to similar tax and regulatory environments; 4) half of Chemtura’s revenue comes from outside the United States; and 5) Chemtura competes with these companies directly. The Court essentially concluded that while it is not necessarily true that foreign comparable companies should always be considered, if the subject company is operating and competing internationally, it may be appropriate to rely on the multiples of foreign companies.
With respect to choosing comparable public companies of similar size, Judge Gerber stated, “DuPont and PPG dwarf the Debtors in sales, EBITDA, enterprise value, and market cap. For instance, DuPont’s revenues are nearly 18 times that of Chemtura’s. As materially larger companies, they aren’t as risky and trade at higher multiples… Their inclusion in the analysis inappropriately results in a higher value.” As many studies have shown, larger companies tend to trade at higher multiples, all else held constant. As such, it may not be appropriate to include significantly larger public companies in a valuation analysis without adjusting the implied multiple to account for size differences.
Precedent Comparable Transactions Method
In the application of the Precedent Comparable Transactions method, one of the biggest areas of dispute was whether it was reasonable to use transactions that were consummated before September 15, 2008, the day Lehman Brothers filed bankruptcy. The other highly contentious topic was whether the multiple from a transaction that had not yet closed could be relied upon in the valuation.
Since the bankruptcy filing of Lehman Brothers in the fall of 2008, the stock market had been on a roller coaster and the transaction market had changed drastically. As such, a significant area of contention in the valuation of Chemtura came down to whether or not transactions pre-dating that point in time (which typically had higher multiples) were still relevant for a current valuation. Judge Gerber concluded, “[The expert for the Debtors] noted that the global economy fell into a tailspin after the Lehman bankruptcy, and that the financial system froze and global stock markets collapsed, causing the worst recession since the Great Depression. Credit necessary to finance acquisitions is far less available today. I accept [the Debtors’ expert’s] testimony that advanced economies are fundamentally different today, and that relying on multiples from a time period before the crash is inappropriate.” As such, any current valuation that includes precedent transactions that occurred prior to the financial collapse in the fall of 2008 should be viewed with a sense of skepticism.
In a definitive statement on the use of pending transactions in the Precedent Comparable Transactions method, Judge Gerber stated, “definitive documentation had been entered into that (unless conditions providing for rights of withdrawal were satisfied) obligated the parties to close, and that neither buyer nor seller could walk from the deal. The price of the deal already was fixed, by documentation binding on the parties. If the whole idea of a valuation is to determine what a willing buyer will pay and a willing seller will accept, and that already has been determined, it is not at all persuasive to contend that a deal with executed definitive documentation must be ignored simply because it has not yet closed. Indeed, if there is temporal proximity, as there is here, such a deal, even if not yet closed, may be the best comparable of all.”
Ultimately, the Bankruptcy Court stated that, “Precedent Transactions analysis has to be used with some care to normalize for extraneous factors that may be present in individual cases and increase the prices in those transactions-like control premiums, a willingness to pay more to obtain operational synergies, and hostile transactions.” As such, based on these factors, which typically exist in a transaction, the multiples implied by the Precedent Comparable Transactions method often represent the upper bound of a reasonable valuation conclusion.
Real World Tests
In addition to the three valuation methodologies discussed previously, in order to further support the valuation conclusion for Chemtura, Judge Gerber also considered two pieces of market information that could be gleaned from the bankruptcy process.
Marketing Efforts
During the negotiation process of this reorganization, one course of action that was undertaken by the equity holders was to market the Debtors for sale. The Debtors cooperated with this effort in order to find out if Chemtura could truly be sold at the value that the equity holders were contending was appropriate for the reorganization. However, when the equity holders marketed the Debtors at the price that they were using in their own plan of reorganization, there were no takers. In fact, no offers were made at all for Chemtura despite a relatively robust process. Further, none of the equity holders were willing to put in their own money at that price (despite the fact that several owners were hedge funds), or even a lower price, a fact that lead Judge Gerber to believe that the price being proposed by the equity holders was too high, and not indicative of a fair value.
Creditors’ Preference for Cash
The second piece of real world evidence that leads to the conclusion that the value purported by the equity holders was too high is the form that the creditors chose to take their distributions. The plan of reorganization allowed the creditors to choose between cash or stock. If the value of Chemtura being used in the Debtors’ plan were truly understated, one would expect all of the creditors to jump at the opportunity to take stock, and lock in an immediate return when the “true” value was realized. However, the overwhelming majority of the creditors chose cash, which implies that the value of Chemtura being used in the plan was not understated, at least in the eyes of the creditors when real money was on the line.
Credibility Issues
After Judge Gerber rendered his decision with respect to the valuation analyses prepared by each of the experts, he made special note of several significant credibility issues that the Bankruptcy Court had to contend with during the expert testimony. Three of the major credibility issues addressed were: 1) inconsistency between trial and deposition testimony; 2) failure to revise valuation conclusions in the face of changed economic circumstances; and 3) contingent fee arrangements.
The first two items of note appear to be relatively straightforward and obvious. It is always important for an expert to have consistent testimony at deposition and trial. In this case, however, despite hiring experts from well-known firms, this did not happen, and it hurt the cases for both sides. Further, as bankruptcy cases often drag out for months or even years, it is important for experts to consistently update their valuations as economic and industry factors change over time. If an expert testifies to a valuation that was performed six months prior (and the world has changed over those six months) without updating the analysis, the credibility of the expert will be diminished in the court’s view, as was the case in Chemtura.
The final issue of credibility that Judge Gerber addressed is a little more tricky. It is very common for financial advisors in a bankruptcy proceeding to have fees that are contingent on a successful outcome for their client. However, when that financial advisor then has to testify in court, the contingent fee arrangement can cause considerable credibility concerns. As Judge Gerber noted in this case, “In my experience, provisions like those in [the experts’] agreements are common… I approved each of them when authorizing the retentions of the three firms, and in my view there is nothing inherently wrong with them. They’re unobjectionable as a means of incentivizing investment bankers to find buyers or investors, or to make deals, if they’re regarded by stakeholders as necessary or desirable to achieve those ends. But such provisions can’t be ignored when investment bankers testify… they materially and adversely affect witness credibility… I think it’s sufficient that we merely take contingent fees or incentive compensation into account as adversely affecting credibility, and ultimately take such opinions with a grain of salt.” Based on this sentiment from the Bankruptcy Court, it appears that while the incumbent financial advisor may seem to be the obvious choice to testify to valuation issues, it may be advisable to hire an independent valuation expert that does not have a contingent fee arrangement to testify to the critical valuation issues at the confirmation hearing.
Conclusions
The decision from Judge Gerber in the Chemtura bankruptcy confirmation hearing gives us a wealth of knowledge with regard to how the Bankruptcy Court views many issues related to valuation and the various methodologies. Further, the decision addressed the importance of considering real world tests to corroborate valuation conclusions. Finally, the Bankruptcy Court also made special note of the importance of hiring a credible and independent valuation expert, which in many cases, should not be the current financial advisor that will likely be viewed as having a strong bias given the contingent fee compensation arrangements.
Significant Valuation and Expert Witness Credibility Issues in Chemtura Corp. Bankruptcy.pdf
Significant Valuation and Expert Witness Credibility Issues in Chemtura Corp. Bankruptcy
I believe from other bankrupcy trials when it was discovered that a company was forced out of business that the court can rule up to three times the value of the original offer but I cannot locate where I read that piece. Normal situations are twice the value of the offer but I think the Judge has broad reach here to allow for more especially if it is proven to be a robbery of sorts occurred and value we have lost over the last three years is taken into account. ANyone know where to find other judgements for normal bankrupcy where the company emerged from this kind of scandalous takeover? I think there is more to come beyond the number that is settled upon here due to crimes being committed, that may result in another value being paid out at some later date when that case is won by the attorney's representing the original company and it's forced demise. I think something in the future could also conme the way of investors here based on those suspected illegal activity peformed by JPM/FDIC representatives, the SEC will have to be involved then and I am sure they are following this closely, or should be if they are not.
General, sounds to me like another paper with numbers on it may be coming to Sussman in this regards very close means a new sheet maybe forthcoming with the proper amounts on it. GLTA here.
The EC and Sussman and company are playing this very smartly in being totally quiet this tells me there is much, much more to hit the wires and come out here. Let's see prison trial or payoff, HMMMMMMM let's see what we want to do here, HMMMMMMMMMM.
Listen BR has to save some face to those who do not know or understand the true facts here, he will need a job after this you know so in some areas he will be known as the one who got this all settled and taken care of for us shareholders and he can sell that to those who don't bother to know what we all know. So let it be, BR will be gone soon and Sussman will win the day for all of us. BR has been defeated but Sussman is letting him have his day, a gentlemans agreement I would call it in lawyer speak. GLTA here.
I'm in for double .15 up to .34 and settle in the .20's.
What is intersting about numbers in general referring to the PPS is when a stock hits $.02 cents it brings a whole other group into looking into what is going on and investing into it. This protects the longs all the more.
I tend to agree that charts on this particular stock are not going to represent the norm's that we see. This is a rocket ship fueling right now and has been for three years. No some positive releases of concern to some longs here but hard not to get excited about as good news has really been hard to come by here. We all anticipate movement tomorrow I would say watch for a normal pullback around 10 a.m. but with this one maybe none at all. GLTA here. Charts are a good tool so don't take me wrong just in this situation not a reliable prognosticator. Wow did I just say that.
I believe the leak or release of this information was to protect the big boys to be able to get in on Friday before the close. That way they will not have to chase it Monday morning. Makes sense to me the rich watch out for their own if you have not learned anything yet in investing, know that piece. Someone always knows before a move and when it is publically realeased to me that means there was no holding this back once it gets moving.
If I recall the 2x value is based on the April offer by JPM of $8.00 per share for the $16 the 3x value comes into play upon proof of a fraudulent conveyance being discovered and won in court. But again that is the minimim if I recall. Diamond care to chime in on that issue as you are the king of the 2x, 3x money here? Not sure if any rules apply consistently for payout in situations such as this stock against what others in bankruptcy have had ending valuations occur. But the norm I think to be considered and minimum seems to be 2x and 3x the offer or their last trading average value from previous year???? Anyone?
For Newbies et al. It is kind of funny that the JPM offer in April of 2008 being $8 per share equalled the $7Billion dollar value that TPG put into WAMU in 2008. Things that make one go HMMMMMMMM.
Many people were involved directly or behind the scenes in the seizure of Washington Mutual Bank. JPMorgan CEO Jamie Dimon made an offer for WaMu in April 2008 and subsequently purchased WaMu's assets from the FDIC after the seizure. Former JPMorgan exec Rotella, WaMu's President and COO, was responsible for oversight of retail, commercial, and mortgage loans. Secretary Paulson insisted that WaMu should have sold itself after
WaMu CEO Kerry Killinger rebuffed Dimon and accepted an investment from TPG. SEC Chairman Cox refused to put WaMu on the protected “No Short” list. Killinger was forced out and replaced by Alan Fishman. OTS Director Dochow was responsible for oversight of WaMu, despite his checkered past. OTS Director Reich approved the seizure, while FDIC Chairman Bair conducted secret negotiations to sell WaMu to avoid possible depletion of their insurance fund. After the Chapter 11 filing, Williams was named President and A&M's Maciel was named CFO.
JPMorgan CEO Jamie Dimon
“JPMorgan had made a takeover bid of $8 per share in company stock, or about $7 billion, for the 119-year-old Seattle, Washington-based bank. “
“Wall Street Journal said that the JPMorgan offer was in stock, so if the stock were to rise, it would prove beneficial for Washington Mutual Shareholders.”
Washington Mutual Selects TPG Deal Over JPMorgan $7B Offer
Despite a serious interest expressed in Washington Mutual prior to the seizure, JPMorgan Chase did not put in a bid as Goldman Sachs attempted to sell WaMu.
WaMu Auction Gets No Bidders Yet, FT Reports
“`JPMorgan is getting a steal compared with what they were going to pay,' said Scott Adams, a pension and investment analyst at the American Federation of State, County and Municipal Employees in Oakland, California, which owns WaMu shares. `It's very tragic.'''
“JPMorgan had 75 people involved in the transaction and ``bid to win'' because it wanted WaMu's assets, Dimon said on an earlier conference call today. JPMorgan used its own investment bank to value the mortgages, he said. ``We don't know and we don't care'' about rival bids for WaMu, he said. “
JPMorgan Buys WaMu Bank Business as Thrift Seized
President and COO Rotella
Steve Rotella, former head of JPMorgan's residential lending business, was named WaMu's President and Chief Operating Officer on January 10, 2005. His responsibilities include oversight of retail, commercial, and mortgage businesses as well as day-to-day administration.
“Rotella thinks WaMu's mortgage business needs to speed up processing of customer applications. He also thinks WaMu could do much more with small-business customers, and that its Web site could be more sales-oriented. “
Washington Mutual Confident it's on the Right Path
WaMu Offers New All-in-One Mortgate, Home Equity Loan
Private Equity Firm TPG
TPG, formerly Texas Pacific Group, is a private equity group with offices worldwide. TPG led a group of investors who purchased $7B worth of newly issued stock. TPG co-founder David Bonderman was given a seat on WaMu's board.
$7B Gives Shaky WaMu Firmer Footing
"In TPG we have found a great partner with a terrific investment track record," said Washington Mutual chief Kerry Killinger. "We are particularly pleased that David [Bonderman] will rejoin our board. He has a long history with the company - having previously served as a Washington Mutual director - and we are privileged to once again benefit from his insight and experience."
Washington Mutual's Smart-Money Rescue - Apr 8, 2008
Treasury Secretary Paulson
“Nov. 9 (Bloomberg) -- U.S. Treasury Secretary Henry Paulson warned former Washington Mutual Inc. Chief Executive Officer Kerry Killinger to sell the thrift to JPMorgan Chase & Co. two months before WaMu failed, the Seattle Times reported. “
Paulson said, “You should have sold to JPMorgan Chase in the spring, and you should do so now. Things could get a lot more difficult for you,” reported the Times, citing a WaMu executive.
Bloomberg News Article: Paulson Warned Washington Mutual to Sell
Money ManagementLatest News
7 funds lose on WaMu failure
September 29, 2008, 12:01 AM ET
Post a CommentRecommend At least seven pension funds lost their private equity investments in Washington Mutual, following its failure and subsequent purchase by JPMorgan Chase, according to a source.
At least six pension funds had invested in TPG Capital VI, which, in turn invested in Olympic Partners. Olympic, a special situations fund sponsored by private equity firm TPG Capital, lost its $2 billion investment in WaMu.
Investors in the $19.8 billion TPG VI include CalPERS, New York State Common Retirement Fund, Illinois Teachers' Retirement System, Washington State Investment Board, Los Angeles City Employees Retirement System and the San Francisco City & County Retirement System.
CalPERS committed $950 million to TPG Partners VI, which closed in February, said Clark McKinley, spokesman at the $223 billion system. He wouldn't answer any other questions.
And at least two pension funds — CalPERS and the New York State Teachers' Retirement System — invested in TPG IV, which also invested in Olympic.
Separately, Harris Associates' Oakmark Funds lost big on Washington Mutual, according to sister publication Crain's Chicago Business. Three Oakmark Funds added nearly 12 million WaMu shares in the second quarter, boosting holdings 29% to 39.5 million. The shares lost all value on Sept. 26.
Old News Hedge Funds invested in WAMU.
By Jonathan Stempel
NEW YORK | Thu Jul 31, 2008 6:02pm EDT
NEW YORK (Reuters) - An activist British hedge fund has taken a 6 percent stake in Washington Mutual Inc (WM.N) as the largest U.S. savings and loan tries to rebound from billions of dollars of mortgage-related losses.
The London-based fund, Toscafund Asset Management, also reported a 5.1 percent stake in Sovereign Bancorp Inc SOV.N, the second-largest U.S. thrift.
Toscafund revealed the passive stakes in separate filings Thursday with the U.S. Securities and Exchange Commission.
Shares of both Washington Mutual and Sovereign have lost more than half their value in the last year.
Toscafund revealed its stake in Seattle-based Washington Mutual more than three months after that thrift set plans to raise $7.2 billion of dilutive capital from outside investors led by private equity firm TPG Inc.
The fund's 105.5 million share stake in Washington Mutual makes it the thrift's second-largest shareholder after TPG, according to Thomson ShareWatch and public filings.
On July 22, Washington Mutual posted a $3.33 billion quarterly loss, and said losses through 2011 in its one-family residential mortgage portfolio would probably be toward the high end of its prior forecast of $12 billion to $19 billion.
Toscafund in March offered to help Washington Mutual recapitalize, The Wall Street Journal said at the time.
Separately, Toscafund's 33.5 million share stake in Sovereign makes it that thrift's third-largest shareholder. Spanish bank Banco Santander SA (SAN.MC) holds nearly one-fourth of the shares, while activist investor Relational Investors LLC of San Diego owns roughly 9.2 percent.
Philadelphia-based Sovereign is reducing balance sheet risk and focusing on core U.S. Northeast and mid-Atlantic markets after years of rapid expansion.
Washington Mutual shares rose after Toscafund revealed its stake, closing up 59 cents, or 12.5 percent higher, at $5.33. They remain down 85.8 percent from a year ago.
Sovereign shares closed down 10 cents, or 1 percent lower, at $9.52, and are down 50.3 percent from a year ago.
(Editing by Tim Dobbyn)
Rule 2019 information.
• From Vol. 3 No.4 (Jan. 27, 2010)
Delaware Bankruptcy Court Disagrees with WaMu Decision, Finding that Rule 2019 Does Not Apply to Ad Hoc Committees in Six Flags Chapter 11 Proceeding
As increasing numbers of hedge funds compete for investment opportunities, it has become even more critical for fund managers to keep their holdings and investment strategies close to the vest. For instance, many hedge funds that focus on distressed investments more actively participate in bankruptcy proceedings, but remain loath to disclose sensitive information about the precise nature of their holdings. As a result, Federal Rule of Bankruptcy Procedure 2019 – a seemingly ministerial rule mandating disclosures by creditors in specified circumstances – has become a source of hotly-contested litigation for these funds. According to Rule 2019, “every entity or committee representing more than one creditor” must file a verified statement disclosing certain information about its claims. That information includes, among other things, (i) the nature and amount of its claims or interests, (ii) the date of acquisition of its claims or interests acquired in the year before filing of the bankruptcy cases, (iii) the amount paid, and (iv) any subsequent sales of claims or interests. For more background on Rule 2019, see “Would the Expanded Disclosures Required by Proposed Amendments to Federal Rule of Bankruptcy Procedure 2019 Deter Hedge Funds from Investing in Distressed Debt? (Part Three of Three),” Vol. 2, No. 39 (Oct. 1, 2009); “How Can Hedge Funds that Invest in Distressed Debt Keep their Strategies and Positions Confidential in Light of the Disclosures Required by Federal Rule of Bankruptcy Procedure 2019(a)?,” The Hedge Fund Law Report, Vol. 2, No. 34 (Aug. 27, 2009); and “How Can Hedge Funds that Invest in Distressed Debt Keep Their Strategies and Positions Confidential in Light of the Disclosures Required by Federal Rule of Bankruptcy Procedure 2019(a)? (Part Two of Three),” The Hedge Fund Law Report, Vol. 2, No. 36 (Sep. 9, 2009). In an abrupt change of course from the December 2, 2009 Washington Mutual decision, on January 9, 2010, the Delaware Bankruptcy Court held that the members of an ad hoc committee of noteholders did not have to comply with the disclosure requirements of Bankruptcy Rule 2019. See In re Premier International Holdings, Inc. Case No. 09-12019 (Bankr. D. Del. Jan. 9, 2010); see also “As Debate over Amendment of Bankruptcy Rule 2019 Continues, Delaware Bankruptcy Court Finds that Current Rule 2019(a) Mandates Disclosure of Economic Interest of ‘Loose Affiliation’ of Washington Mutual Creditors,” The Hedge Fund Law Report, Vol. 2, No. 49 (Dec. 10, 2009). Judge Christopher S. Sontchi reasoned that the plain meaning and legislative history of Rule 2019 does not contemplate ad hoc committees. This article details the background of the action, the court’s legal analysis and its potential implications for the hedge fund community.Read Full Article …
• From Vol. 4 No.16 (May 13, 2011)
Amendments to Bankruptcy Rule 2019 Recently Approved by the U.S. Supreme Court Add Disclosure Requirements While Protecting Distressed Debt Funds’ Proprietary Trading Strategies
The success or failure of a distressed debt investment strategy depends, in part, on the ability of a bankruptcy investor to prevent other investors in the same bankruptcy from obtaining information on its purchase and sale activity. Rule 2019 of the Federal Rules of Bankruptcy Procedure has threatened to undermine the confidentiality of bankruptcy trading information. At least some courts in the past two years have construed Rule 2019 to require bankruptcy investors to disclose the value of claims, the timing of purchase, amount paid and the fact of sales. On April 26, 2011, the U.S. Supreme Court adopted amendments to Rule 2019. This article details: relevant case law leading up to passage of the amendments; prior HFLR coverage of the extensive disagreement among courts regarding the level of disclosure required under the prior version of the rule; the key differences between the current version of Rule 2019 and the proposed amendment (Amended Rule 2019); the key definitions in Amended Rule 2019; what information must be disclosed under Amended Rule 2019; who must disclose it; and a new rule relating to identification of a chapter 15 debtor’s “center of main interests.” For more on Rule 2019, see “Would the Expanded Disclosures Required by Proposed Amendments to Federal Rule of Bankruptcy Procedure 2019 Deter Hedge Funds from Investing in Distressed Debt? (Part Three of Three),” Vol. 2, No. 39 (Oct. 1, 2009); “How Can Hedge Funds that Invest in Distressed Debt Keep Their Strategies and Positions Confidential in Light of the Disclosures Required by Federal Rule of Bankruptcy Procedure 2019(a)? (Part Two of Three),” The Hedge Fund Law Report, Vol. 2, No. 36 (Sep. 9, 2009); “How Can Hedge Funds that Invest in Distressed Debt Keep their Strategies and Positions Confidential in Light of the Disclosures Required by Federal Rule of Bankruptcy Procedure 2019(a)?,” The Hedge Fund Law Report, Vol. 2, No. 34 (Aug. 27, 2009).Read Full Article …
DJ CORRECT: Washington Mutual Delays Chapter 11 Plan Showdown For Talks
20/05/2011 14:54 | JP Morgan Chase & Co
Washington Mutual Inc. (WAMUQ) pushed off a scheduled final confrontation with shareholders over its $7 billion Chapter 11 exit plan by three weeks Thursday, citing "ongoing discussions."
In a filing Thursday with the U.S. Bankruptcy Court in Wilmington, Del., WaMu's former parent set a new confirmation hearing date of June 29, "in light of ongoing discussions with respect to the modified plan."
A spokesman for the company was not immediately available Friday to shed light on the ongoing Chapter 11 plan talks.
However, shareholders are the major opponents of the plan proposed by Washington Mutual, the former parent of the thrift that was the subject of the largest banking collapse in U.S. history, Washington Mutual Bank, or WaMu.
Early this year, shareholders lost a bid to derail Washington Mutual's Chapter 11 plan on the grounds it put too cheap a price on the value of potential legal claims stemming from the loss of WaMu. They have since seized on suspicions major debt investors engaged in insider trading during the case to preserve hope of blocking a plan that gives shareholders nothing.
Thursday's notice said the company also extended the deadline for the official shareholder committees to spell out its objections to the plan to June 10.
Washington Mutual's Chapter 11 plan was rejected earlier this year and has since been revised. It still has foes other than shareholders, including holders of trust preferred securities, and plaintiffs in securities litigation.
Those opponents have already weighed in formally against the revised Chapter 11 plan, which was slated for hearing June 6. Only shareholders have yet to be heard from.
Lawyers for the official committee have been probing three hedge funds that own big stakes in Washington Mutual's debt, looking for evidence they bought and sold based on information gained at the Chapter 11 plan bargaining table.
Judge Mary Walrath noted the suspicions when rejecting the original Washington Mutual Chapter 11 plan. Though based on hearsay evidence, the judge said, the contentions the big bankruptcy case was tainted were of concern.
Appaloosa Management L.P., Aurelius Capital Management LP and Owl Creek Asset Management all deny wrongdoing. All have been subjected to shareholder questioning in recent weeks, court documents say.
If they prove out, the claims of insider trading could sway hundreds of millions of dollars in Washington Mutual's case, which promises creditors payment in full at the contract rate of interest and ranks some of the hedge fund holdings as debt, rather than equity.
Shareholder attorneys have attacked the plan on both fronts, contending the lower federal judgment rate of interest is all that's required, and that one class of hedge fund "debt" is in fact equity, that should share the fate of other equity in the company.
Walrath indicated proof of insider trading could sway her rulings on those key points.
Washington Mutual's Chapter 11 plan embodies a deal with WaMu's new owner, J.P. Morgan Chase & Co. (JPM), and with the Federal Deposit Insurance Corp., which brokered the sale of WaMu to J.P. Morgan after it was seized in September 2008.
By Peg Brickley, Dow Jones Daily Bankruptcy Review; 302-521-2266; peg.brickley@dowjones.com
From Fixedrops JPM board, more great news for JPM.
Albuquerque Journal
JP MORGAN- Collusion scheme to Bleed Santa Fe mortgage company dry...
Five major banks engaged in “a collusive scheme” for more than a year to fraudulently bleed Santa Fe’s Thornburg Mortgage of almost $2 billion until the firm had no choice but to seek U.S. Bankruptcy Court protection in 2009, according to a complaint filed in a federal bankruptcy court in Baltimore.
Joel I. Sher, a court-appointed trustee who represents TMST Inc. — which is how Thornburg Mortgage is now known — filed his 85-page complaint Saturday, saying the banks initiated a “host of unjustified margin calls” in February 2008.
The complaint said they dunned the company for unjustified payments in violation of agreements they executed in March 2008, eventually claimed virtually all of the company’s on-going revenue sources, then liquidated Thornburg Mortgage assets that they held, leaving the company no choice but to seek bankruptcy court protection.
Sher’s complaint identifies the banks as J.P. Morgan Chase, Citigroup, Credit Suisse, RBS and UBS. According to the Wall Street Journal, Citigroup and J.P. Morgan Chase said the complaint has no merit. The remaining banks had no comment.
Garret Thornburg was a founder of both Thornburg Mortgage and Thornburg Investment Management, which has no legal connection to and never held investments in the mortgage company. Thornburg Investment, based in Santa Fe, manages several mutual funds.
A spokesman for Thornburg Investment Management said Tuesday that the company is not a party to the bankruptcy proceedings and would have no comment on Sher’s complaint. Former Thornburg Mortgage President Larry Goldstone did not respond to messages seeking comment.
J.P. Morgan Chase was named in the complaint because it now owns Bear Stearns, which Sher says was one of the firms that hatched the scheme.
Until a global credit drought that began in 2007 sent the company reeling, Thornburg Mortgage was the nation’s second largest independent mortgage company and New Mexico’s largest publicly traded company, by market capitalization.
The company made its money mostly by investing in high-quality residential mortgages backed securities. It financed those investments primarily through complicated agreements with banks and securities firms. It also originated residential mortgages and bought mortgages from other companies, which it would then bundle into securities that it would market to investors. Far from subprime mortgages, Thornburg dealt only with high-quality borrowers who wanted mortgages on high-end properties.
In the first two months of 2008, Thornburg received $1.8 billion in margin calls from its creditors. A margin call is made when the asset securing a loan or a financial derivative falls below an agreed-upon level. Sher said these calls were an “unjustified” effort by institutional investors to reduce their holdings of mortgage-backed securities and other financial instruments. He called the margin calls “aggressive or sometimes improper.”
Sher claims the banks named in his complaint demanded higher payments than they were entitled to receive. He said Thornburg was facing “a deluge” of margin calls, which made it impossible to contest every questionable demand for payment.
Thornburg and the banks agreed in March 2008 to modify the financing agreements they had in place, in some cases, for years. Sher said Thornburg believed the new deal gave the company a year of respite from margin calls from the five banks. That deal allowed it to raise more than $1 billion in new capital, according to the complaint.
However, over the course of the year, Sher said, the banks continually demanded more payments until finally Thornburg had no resources to run its business. Shortly before Thornburg entered bankruptcy proceedings in May 2009, the banks began liquidating Thornburg securities they held as collateral.
— This article appeared on page A1 of the Albuquerque Journal
For all Newbies here wondering what road they may go down with an investment into this stock. Here are some points to ponder concerning Bankrupcy-Common Stock-Fraudulent Conveyance links. Time to Read? Invest wisely the longs here know what we have, I think?
http://www.sec.gov/investor/pubs/bankrupt.htm
http://www.ehow.com/info_8057343_chapter-11-bankruptcy-common-stock.html
http://www.bankruptcylawnetwork.com/when-are-you-safe-after-a-fraudulent-conveyance/
http://www.bankruptcylawnetwork.com/trustees-powers-what-is-a-fraudulent-conveyance/
http://allmandlaw.com/bankruptcy-blog/dallas_bankruptcy/tribune-co-accused-of-fraudulent-conveyance-before-bankruptcy
http://www.bklaw.com/asset-transfers.html
http://onlinebankruptcyblog.com/bankruptcy/fraudulentconveyancebankruptcy/
Occasionally, publicly listed companies go bankrupt. The company's shareholders, depending on the type of stock they hold, may be entitled to a portion of the liquidated assets, if there are any left over. However, the stock itself will become worthless, leaving shareholders unable to sell their defunct shares. Therefore, in the case of corporate bankruptcy, the only recourse is to hope that there is money left over from the firm's liquidated assets to pay the shareholders.
Upon bankruptcy, a firm will be required to sell all of its assets and pay off all debts. The usual order of debt repayment, in terms of the lender, will be the government, financial institutions, other creditors (i.e. suppliers and utility companies), bondholders, preferred shareholders and, finally, common shareholders. The common shareholders are last because they have a residual claim on the assets in the firm and are a tier below the preferred stock classification. Common shareholders often receive nothing at all, as there is usually very little left over once a firm has paid its debts.
The amount of the payment a common shareholder will receive is based on the proportion of ownership he or she has in the bankrupt firm. For example, suppose that a common stockholder owns 0.5% of the firm in question. If the firm has $100,000 to pay to its common shareholders post liquidation, this owner would receive a cash payment of $500.
If a shareholder owns preferred shares, he or she will have an increased chance of receiving a payment upon liquidation because this class of ownership has a higher claim on assets. (For further reading, see A Primer On Preferred Stocks and Knowing Your Rights As Shareholder.)
Investors should consider the possibility of bankruptcy when evaluating potential investments. Ratios, such as debt/equity and the book-value, can provide investors with a sense of what they may receive in the event of bankruptcy.
For more on this topic, read An Overview Of Corporate Bankruptcy.
http://www.caddenfuller.com/CM/Articles/Articles38.asp
Bankruptcy Law: Understanding Fraudulent Conveyances
Introduction
In bankruptcy proceedings, a trustee is chosen to administer the debtor’s estate in a fair and orderly manner. Generally speaking, for bankruptcy purposes, the estate is comprised of those assets of the debtors in which the debtor’s creditors have an interest. The trustee is given the power to set aside or “avoid” certain transfers of the debtor’s assets out of the estate that unfairly place assets beyond the creditor’s reach. Such a transfer of the debtor’s assets to a third party, with the intent to prevent creditors from reaching the assets to satisfy their claims, is called a “fraudulent conveyance”.
Understanding Fraudulent Conveyances
There are two types of fraudulent transfers in bankruptcy law. The first, actual fraud, involves the intent to defraud creditors, the other, sometimes called constructive fraud, involves a transfer, which is made in exchange for grossly inadequate consideration.
Actual fraud is committed when 1) a transfer is made within one year before the date of the filing of a bankruptcy petition and 2) is made with the intent to hinder or defraud a creditor. Actual fraud requires proof of intent from the person challenging the transfer. Of course, a debtor intending to defraud his creditors will not be overt about his intentions to do so. Therefore, courts have set forth circumstances, the existence of which indicate the intent to defraud. Some examples of these circumstances are actual or threatened litigation against the debtor, a retention of possession or control of the property, transfer of substantially all the debtor’s assets, transfer to a newly created corporation, and a special relationship with the person to whom the property is transferred. These are only factors to be considered in determining whether a person intended to defraud a creditor, and whether they do in fact prove the debtor’s fraudulent intent is to be determined on a case by case basis.
Constructive fraud also requires two conditions: 1) in exchange for the transfer, the debtor received less than “reasonably equivalent value”, and; 2) the debtor is unable to pay debts either at the time the transfer was made or as a result of the transfer itself. In this case, intent need not be proven rather the focus of the inquiry rests on whether the debtor received reasonably equivalent value. Of course, reasonably equivalent value can be in the eye of the beholder. When there is nothing of value exchanged for the transfer of the debtor’s property, the answer is an easy one. Not infrequently, however, something of value is given and the question becomes whether the value was really adequate compensation for the property.
When is a bargain just a bargain and not a fraudulent transfer? Although the trustee of the estate must prove that reasonably equivalent value has not been given, there is no formula for determining reasonably equivalent value. Courts will look at all the circumstances surrounding a transaction to determine whether the exchange looks even. Some of the factors courts have considered in making a determination are whether the sale was for fair market value, whether the transaction was made in good faith in the ordinary course of business by parties of independent interests, the competitiveness of bids for the property, and the net effect on the debtor’s estate with respect to funds available to unsecured creditors. Generally, for an exchange to be considered legitimate, value does not have to be received directly by the debtor, but may exist in the form of additional business opportunities made available through new lines of credit or new affiliations created by the transfer. However, transfers made solely for the benefit of third parties are not reasonably equivalent value. Value as determined by foreclosure sales is generally not questioned unless the foreclosure was collusive or otherwise in violation of state procedural law.
The timing of the transfer is important in determining whether the transfer will stand or not. Only those transfers completed or “perfected” within a year of the filing of the petition for bankruptcy may be reversed. The transfer of certain types of property requires more than one step to complete the transaction. In the case of real estate, for example, the transfer is not complete until a deed is officially recorded.
Once a transfer has been deemed fraudulent, the trustee may recover the property, or the value of the property, and make it part of the bankruptcy estate. They may do so from either the immediate recipient or from anyone else to whom the property was subsequently transferred. One exception to this general rule, however, is the case of the “bona fide purchaser”. The bona fide purchaser is one who acted in good faith to purchase the property without notice of the outstanding rights of others to the property. The bona fide purchaser may retain the property. Another exception is made in a case where valuable improvements to the property have been made. In this case, those that made the improvements to the property are given a lien on the property, securing the improvements they made. Finally, if the law places no other restrictions on the transfer, and the property was purchased for some value in good faith, in other words, with no knowledge of the fraudulent intent, the person receiving the transferred property may be allowed to retain the property or regain the value they paid for it in the settling of the estate.
Fraudulent transfers can have a negative effect on creditors with interests in the debtor's estate. Creditors who suspect the fraudulent transfer of property may be able to obtain a temporary restraining order and preliminary injunction to prevent the transfer before it occurs.
Conclusion
There are many opportunities for dispute when it comes to fraudulent conveyances. Options exist for the creditor who suspects that a fraudulent conveyance is in the making, for a bona fide purchaser whose property is the subject of a fraudulent transfer, or for a debtor defending a transfer of property. An experienced bankruptcy attorney will help you to evaluate the options available to you based on the facts in your particular case.
Also about the time BR made the statement that commons would get nothing and caused the stock to drop like a rock is he not liable for such false statements in today's world. Is that not some sort of violation being a person given the trust to state facts having superior knowledge in this case?
If Hedgies were found to have performed an IT resulting in the downfall of WAMU in 2008/2009 then is it not the SEC whom oversees their violations/fines? And if so can the SEC upon litagating such a crime find they (Hedgies) owe WAMU shareholders money in a settlement for manipulating the stcok, for which EC, WMI, or others need take no part in such a trial at all? I would think we could get a windfall from such a trial or fine to these Hedgies from the SEC, that is making the assumption they do their job here if such crimes have been proved they actually occurred. Just dreaming still.
No Rosen will be hired by that great law firm "Dewey, Cheatham & Howe".
If any litagation toward the hedgies has to go away based on this "Deal" yesterday than that proclaims their guilt right there in my mind. But so be it. If it works for the EC and our side then I am all for it. Heck the hedgies could be buying Monday.
Got out one week ago, bought another low lying stock, it tripled, I noticed this in a.m. around .04 going downward, saw this about 3:45 pm. today sold half my stake in the other stock, bought back my same shares end of day. Oh well up from here. Nice moves and thank you all for your posts today. Glad I am back again only out about 10 days then this sucked me right back in, glad it did.
Reality set in on me months ago and I sold out. GLTA here you deserve to make it as did I but hey with other stocks jumping it is very hard to contiue in this rag of a stock.