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That is my understanding of the Trusts. Please do your own research. Do not listen to me or anyone else.
When we get the reorg plan on Monday...remember that is the end of the Debtors "Exclusive time period" to file a reorg plan. After that there can be additional plans submitted.
Mr. Miller has stated in the Creditors Committee update on November 18th ,2009.
"MR. MILLER: As you get closer to the deadline, there
seems to be more effort on the part of parties to reach a
coalescing point. I would also note, Your Honor, that there
are more constituencies that seem to be organizing on -- they
don't want to call themselves ad hoc committees, so they have
different nomenclature for their organizations, but we are
getting different groups organizing who want to meet with Mr.
Marsal and his team, and to talk about a plan of reorganization
and how claims would be dealt. So I think there's going to be
a lot more activity of that as we go forward in the future."
YOU SHOULD SERIOUSLY LISTEN TO THE LAST 25% of the AUDIO FROM YESTERDAY...IT PROVIDES ALOT OF INSIGHT, IMO...COURTESY OF VOODOO.
VooDoo says,
EVERYONE LISTEN TO THE AUDIO TAPE OF THE COURT VERY CAREFULLY there was no settlement ....Audio file of FRIDAYS COURT hearing is at http://www.viewip.net/WMI/Hearing/2010-03-12/
The Capital Preferred Trusts as I understand it...Lehman raised money thru selling shares of the Trust. Money from the sales of the shares of the Trust were used to purchase bonds issued by LBHI. They are "guaranteed by LBHI.
The Trustee holds the Bonds and "used" to collect payment of interest, etc.
The Trustee of each Captial Preferred Trust has an "accepted" claim for the Face Value of the amount of the Bonds. Which you can find in the claims area on the website. In general, the Lehman bonds currenty trade anywhere from 15-25% of value.
So, if the bonds of the Trusts were trading in the marketplace (now held by the Trustee) the Trusts would be priced around 15-25% of the face value.
That is my understanding. Anyone else??
VooDoo...
I did not hear the Committee of Unsecured Creditors agree to the "Agreement". On behalf of the Committee, Fred Hederra just said he believed he understood the terms being put on the table. I would think the Creditors Committee would have to be on board with any "Agreement".
The EC representative sounds surprised, said they were unaware of any agreement going to be proposed and said the offer was disappointing.
WaMu Falls on JPMorgan Settlement on Cash, Tax Refund (Update2)
By Steven Church
http://www.bloomberg.com/apps/news?pid=20601087&sid=aE5YR3gHwl9A&pos=5
March 12 (Bloomberg) -- Washington Mutual Inc. will collect at least $5.95 billion, less than the $20 billion estimated by shareholders, under a proposed settlement of the company’s yearlong battle with federal regulators and JPMorgan Chase & Co.
Shares of Washington Mutual, the bankrupt former parent of the biggest U.S. bank to fail, fell as much as 76 percent after the settlement was announced. Preferred shares, which opened at $2.26, initially fell as much as 86 percent before recovering to $1.70 at 3:21 p.m. in New York.
Under terms of the deal, Washington Mutual, known as WaMmu, will get $4 billion in deposits currently held by JPMorgan. WaMu, JPMorgan and the Federal Deposit Insurance Corp. will also share two tax refunds expected to be worth about $5.6 billion, said Brian Rosen, a Washington Mutual attorney, in an interview today.
Rosen announced the agreement in U.S. Bankruptcy Court in Wilmington, Delaware, where all three entities had been battling for months over the deposits. Shareholders had estimated in court papers that the company could collect $20 billion from the deposits, tax refunds and lawsuits.
The deal, which took a year to negotiate, will become “vapor” if a group of bondholders successfully opposes it, Rosen said after the hearing.
The money is being held by JPMorgan, which bought Washington Mutual’s bank for $1.9 billion in September 2008 after it was shut by federal regulators.
Debt Repayment
Rosen said the money coming to Seattle-based WaMu will be used to repay $7 billion in debt, mostly owed to bondholders who support the settlement. That won’t leave enough for shareholders, who typically get nothing when a company they own files bankruptcy.
Another set of bondholders owed money by WaMu’s failed Washington Mutual Bank haven’t agreed to support the deal, Rosen said.
Without the support of the bank bondholders, the entire settlement could collapse, Rosen told U.S. Bankruptcy Judge Mary Walrath. The judge must approve the settlement, which Rosen said will be filed by March 26 with the court as part of the company’s liquidation plan.
The company also plans to settle three lawsuits that pitted it against the FDIC and New York-based JPMorgan. A separate shareholder lawsuit against JPMorgan and the FDIC isn’t included in the settlement, Rosen said.
Washington Mutual common shares fell 17 cents, or 45 percent, to 20 cents in over-the-counter trading at 3:24 p.m. The shares had risen 22 percent today before the settlement was announced.
The bankruptcy case is In re Washington Mutual Inc., 08-12229, U.S. Bankruptcy Court, District of Delaware (Wilmington). The dispute over the cash is Washington Mutual Inc. v. JPMorgan Chase Bank NA, 09-50934, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Steven Church in U.S. Bankruptcy Court in Wilmington, Delaware, at schurch3@bloomberg.net.
Last Updated: March 12, 2010 15:26 EST
WaMu Falls on JPMorgan Settlement on Cash, Tax Refund (Update2)
By Steven Church
http://www.bloomberg.com/apps/news?pid=20601087&sid=aE5YR3gHwl9A&pos=5
March 12 (Bloomberg) -- Washington Mutual Inc. will collect at least $5.95 billion, less than the $20 billion estimated by shareholders, under a proposed settlement of the company’s yearlong battle with federal regulators and JPMorgan Chase & Co.
Shares of Washington Mutual, the bankrupt former parent of the biggest U.S. bank to fail, fell as much as 76 percent after the settlement was announced. Preferred shares, which opened at $2.26, initially fell as much as 86 percent before recovering to $1.70 at 3:21 p.m. in New York.
Under terms of the deal, Washington Mutual, known as WaMmu, will get $4 billion in deposits currently held by JPMorgan. WaMu, JPMorgan and the Federal Deposit Insurance Corp. will also share two tax refunds expected to be worth about $5.6 billion, said Brian Rosen, a Washington Mutual attorney, in an interview today.
Rosen announced the agreement in U.S. Bankruptcy Court in Wilmington, Delaware, where all three entities had been battling for months over the deposits. Shareholders had estimated in court papers that the company could collect $20 billion from the deposits, tax refunds and lawsuits.
The deal, which took a year to negotiate, will become “vapor” if a group of bondholders successfully opposes it, Rosen said after the hearing.
The money is being held by JPMorgan, which bought Washington Mutual’s bank for $1.9 billion in September 2008 after it was shut by federal regulators.
Debt Repayment
Rosen said the money coming to Seattle-based WaMu will be used to repay $7 billion in debt, mostly owed to bondholders who support the settlement. That won’t leave enough for shareholders, who typically get nothing when a company they own files bankruptcy.
Another set of bondholders owed money by WaMu’s failed Washington Mutual Bank haven’t agreed to support the deal, Rosen said.
Without the support of the bank bondholders, the entire settlement could collapse, Rosen told U.S. Bankruptcy Judge Mary Walrath. The judge must approve the settlement, which Rosen said will be filed by March 26 with the court as part of the company’s liquidation plan.
The company also plans to settle three lawsuits that pitted it against the FDIC and New York-based JPMorgan. A separate shareholder lawsuit against JPMorgan and the FDIC isn’t included in the settlement, Rosen said.
Washington Mutual common shares fell 17 cents, or 45 percent, to 20 cents in over-the-counter trading at 3:24 p.m. The shares had risen 22 percent today before the settlement was announced.
The bankruptcy case is In re Washington Mutual Inc., 08-12229, U.S. Bankruptcy Court, District of Delaware (Wilmington). The dispute over the cash is Washington Mutual Inc. v. JPMorgan Chase Bank NA, 09-50934, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Steven Church in U.S. Bankruptcy Court in Wilmington, Delaware, at schurch3@bloomberg.net.
Last Updated: March 12, 2010 15:26 EST
I check every day pretty much...it is the highest I have seen.
Sorry, I meant bonds are at $25.5+
Other bonds now bid solidly at $21+/-
Bonds are continuing to firm here now 3 different series above $.25...first time I have seen that since before the filing.
How much does it take to cover the face value for the K's. Looks like the $4B plus another $2B for tax refunds.
In my opinion...this report makes it certain that all classes are coming thru the BK. There is just too much left that can happen. If commons got cancelled, it would open up A&M to a tremendous lawsuit IMO.
We shall see.
This is getting some great press right now! There is so much info that it is taking a little time to digest.
Keep the Faith!
Bonds are at new highs...Just saw the first print above $.25! Still have work to do...now that we know Lehman had a push...let's get the MOR out today with the balance sheet thru Dec 31, 2009! This market place is really finding its legs.
My paperwork for the EC will be coming today all...get your's in too.
Thank you King...
WHY IS EVERYONE HERE SO TWITTERED? Keep your eye on what is important. I am posting this one more time...try and watch the Big, Bold Letters...
Colorable Claims
“The Examiner has determined that there are a limited number of colorable claims for avoidance actions against JPMorgan and Citibank,” Valukas said in the report. Valukas defined a colorable claim in the report as sufficient credible evidence to persuade a jury to award damages at trial.
Barclays bought Lehman’s brokerage for $1.54 billion. Lehman has sued Barclays for $5 billion or more, saying it made a “windfall” on the purchase, and Barclays responded that it is owed $3 billion. A bankruptcy-court trial is scheduled for April 26.
JPMorgan and Citigroup were two of New York-based Lehman’s main short-term lenders. On Feb. 24, Lehman said it settled with JPMorgan over the last of $29 billion in claims the bank filed against Lehman.
New Guarantee
Citigroup, which handled currency trades for Lehman, received a new guarantee from Lehman when Lehman was already insolvent and didn’t give enough value in return, the report said.
“The Examiner concludes that a colorable claim exists to avoid the Amended Guaranty as constructively fraudulent,” Valukas’s report says.
Lehman Chief Executive Officer Bryan Marsal said in an e- mail the bankrupt investment bank would “carefully evaluate” Valukas’s report to assess how it might help “ongoing efforts to advance creditor interests.”
The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
http://www.bloomberg.com/apps/news?pid=20601087&sid=aH2GbcSnGE9Q
To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net. or Don Jeffrey in New York at djeffrey1@bloomberg.net.
Colorable Claims
“The Examiner has determined that there are a limited number of colorable claims for avoidance actions against JPMorgan and Citibank,” Valukas said in the report. Valukas defined a colorable claim in the report as sufficient credible evidence to persuade a jury to award damages at trial.
Barclays bought Lehman’s brokerage for $1.54 billion. Lehman has sued Barclays for $5 billion or more, saying it made a “windfall” on the purchase, and Barclays responded that it is owed $3 billion. A bankruptcy-court trial is scheduled for April 26.
JPMorgan and Citigroup were two of New York-based Lehman’s main short-term lenders. On Feb. 24, Lehman said it settled with JPMorgan over the last of $29 billion in claims the bank filed against Lehman.
New Guarantee
Citigroup, which handled currency trades for Lehman, received a new guarantee from Lehman when Lehman was already insolvent and didn’t give enough value in return, the report said.
“The Examiner concludes that a colorable claim exists to avoid the Amended Guaranty as constructively fraudulent,” Valukas’s report says.
Lehman Chief Executive Officer Bryan Marsal said in an e- mail the bankrupt investment bank would “carefully evaluate” Valukas’s report to assess how it might help “ongoing efforts to advance creditor interests.”
The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
http://www.bloomberg.com/apps/news?pid=20601087&sid=aH2GbcSnGE9Q
To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net. or Don Jeffrey in New York at djeffrey1@bloomberg.net.
Sorry everyone I have been in and out but trying to keep an eye on the Report...
It seems pretty much in line with what we were discussing last night.
Lehman was responsible in many ways for its leverage and being "at the precipice".
Mr. Marsal has long espoused that JPM and CITI were the last ones to assist in Lehman's lack of liquidity...now we have confirmation. Knowinng A&M they already have the lawsuit waiting for both JPM and Citi.
I think a new element in the game is now Ernst & Young for their "accounting practices".
Barclays did benefit...to what extent we do not have the full details.
Lastly, what about this deal with CME? I think there is another potential element that will assist Lehman assets.
Overall, it is about what was expected. We have more assets that need to come home...and they will.
I like...now for the WAMU settlement and then Monday the balance sheet and reorg...Gotta go will be back later.
According to DanBB listening in...the redacted Examiner's Report has been approved by Judge Peck to be made public!
WILL BE POSTED WITHIN 30 MINUTES!
Thanks DanBB
Belly Laugh!
Thank you Dan for having your ear to the ground for the rest of us!
What did this statement refer to in your previous post?
Calls is extraordinary, reads like a best seller
Dan, are you onsite at the hearing, or somehow listening in?
My guess is we are in uncharted territory for a couple of hours. I think the Examiner has his report redacted for 7 pages and ready to be put on EPIQ for the world to see. Just needs Judge Peck to give the go ahead.
Linda Sandler usually is pretty good about going to big Lehman hearings...and I would not be surprised if she is not at the hearing as we speak.
Watch Bloomberg and the LBHI Dockets page and it will turn up soon. Hopefully there is an Executive Summary showing highlights of the report.
Good Luck...I can see the Storm now...it is here...the Perfect Storm!
I think it is just people repositioning before the news. It can be an emotional time. The MM know it too.
IT'S TIME TO SEE WHAT MR. VALUKAS WANTS THE PUBLIC TO KNOW!
Nice chart as usual Brikk!
When you look at the streamer quotes on I-Hub. Those buys and sells.
I do not hold any credence in the buy/sell volumes...MM can manipulate it too easily. I would rather watch the trading directly, if possible.
Thanks Hammer...let's bring it today!
Thanks Fix...I was unaware of that...
I believe that was for the Debtors. It was 11B for the Total LBHI Controlled Entities.
Quick question on the WAHUQ Trusts. I have seen twice now, that the trusts are decided to get $33 a share. Are they not $50.00 face value?
The reason I ask is I am curious as to how that could affect the K's and any payout.
Thanks in advance.
Lehman going on offense against Barclays again in LBHI Dockets #7501 and 7502!
I love it.
Just too many factors up in the air to throw any class of stock out IMO.
A= $272B
L= $316B or -$44B plus $11B to pay face on Preferreds.
LTV at 86%
Need $55B to make up deficit and pay full value on Preferreds.
10B NOL's worth $10B
8B Barclays
17B JPM
16B?? Increase in Asset Value since 6/30/2009 (6% of 272B)
$16B LBI=
$67B see how easy that was? Plus anything from the Examiner's Report?? How about the mysterious write downs of $80B in the "Investments in Affliates" category on the balance sheets 12/31 and 6/30? That is the biggest reason that assets are less as of 6/30/2009.
Its coming...the Perfect Storm.
If Lehman was not forced to Chapter 11 by unscrupulous acts, it would not take 2,200+ pages to say that. In addition, there are some 3,800 pages of supporting documents as appendicies.
No doubt, Lehman management takes heat over the leverage factor...however, you cannot take Billions of Dollars out of cash and asset accounts without taking the most liquid, non-leveraged companies down.
Let's hope that the "naked shorts" are also addressed in this report like ABN AMRO was investifated for by Mr. Valukas.
Still say, Barclays and/or JPM are going to step up and buy the whole bunch of Lehmans. Just my opinion.
Can't really say...good question. Obviously we are speculating.
I also believe that you will see existing shareholders of all classes get shares in the new issues of the subsidiaries as they are released, i.e. Aurora Bank, Woodlands Bank and the other hundreds of NON-DEBTOR COMPANIES THAT LEHMAN WHOLLY OWNS!
The previous post was just simply in reference to LBHI.
Keep the Faith!
I think you will see the commons come thru but get reverse split about 100:1 share of new issue.
I believe the Preferreds will come thru at about 10:1 share of new issue. Furthermore, I think the new issue will be around $10 a share. Do the math...JUST MY OPINION.
Trusts will come thru 2:1 share of new issue.
However, if the new balance sheet shows A=L, or better, we will have a new game because of the potential legal upside.
If the A=L I think there is a strong possiblity that Barclays or JPM will buy Lehman whole.
This consolidation over the past two weeks looks almost identical to the late August to Mid September, 2009, consolidation before running to $.35-$.40.
IMO we run to $.40 and then to $1.00-$2.50 next week after the reorg.
That is just my feeling please do not make any decisions based upon what I sat or do.
I think it is perfect to have the Examiner's Report coming out two days before reorg and new balance sheet.
YOU COULD NOT HAVE ASKED FOR THE TIMING TO BE ANY BETTER!
IMO.
Bonds are nice and firm today sitting at or near the highs since the filing. Everything is coiled and ready.
Read the LBI SIPA Docket #2786 about the Trustee kicking out claims to LBI. The exhibits A-H will give you an idea about what type of claims these are. Many are people that have LBHI type bonds, etc. being held in accounts like Smith Barney, UBS, etc.
Comical...
In my humble opinion...I don't know how one could make a reorg plan without knowing what was underneath the hood! So yes, I think the balance sheet should be at least thru Dec. 31, 2009.
If you are wrong and under shoot you would be open to at least one lawsuit...MINE.
More than likely, no class can be thrown out at this juncture, IMO. To do so is simply saying we have to do something now because of timeframe not underlying knowledge of asset values.