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I think all the people of the United States should sue the FDIC, FED, the Treasury, the rating agencies, JPM, Citi, GS.....
I just hope that in the case of WMI, we have the company bought before these lawsuits. I think that even if JPM buys WMI, the company suffered losses and damages that should be repaired!!
But, again, I hope that first JPM will buy WMI for a descent price.
Yes. That's the point!
Perhaps the way JPM acquired Wamu Bank assets and deposits will generate big taxation for them. So, it may be possible that they will have to acquire WMI's shares to avoid this taxation.
In the case of Wachovia, I remember that WFC said that Citit was leaving behind the asset that would entitle them to a big tax benefit, i.e., the holding shares.
Any thoughts?
Consider that Shearman & Sterling is very close to JPM and, if they issue a Legal Opinion satisfactory to them, they will be comfortable with the acquisition.
Sure!
But have a look at the link below!
http://www.marketwatch.com/tools/quotes/financials.asp?symb=JPM&sid=427620&report=1&freq=2
I mean, use the NOL and whatever other tax benefit they may have.
Thanks. I think its relevant because JPM will want to use it as soon as they can to save cash.
This, naturally, assuming they will buy WMI.
Do you know when JPM has to deliver its income tax return and pay taxes?
Don't worry. TMA missed interest payments and is going up 33% today.
The real value of the company appears to be the NOL and other tax benefits. Maybe the best way make money out of it is to sell the company and, as far as I can understand, even in a bankrupt company common shareholders have the control of the company.
This control is, naturally, subect to the bankruptcy court but, in spite f that, again the common shareholders have the decision making power.
Well, it can't get worse!!
I also think there are negotiations going on.
You cannot cancel common shares. They can be sold or replaced by stocks of a new company.
I think it's very difficult to know.
Anyway, first indication is that, at least WMI's debt, is line with what was stated by the company in their bankruptcy filing. From all I have heard and judging by Wachovia, where news say that the tax loss ampunted to US$ 20Bi, WMI may be worth a considerable sum.
I still don't see why JPM wouldn't be interested in having a seizable tax benefit. It is interestinig to note that, according to previous filings, Shearman & Sterling was hired as tax litigation counsel for WMI, at WMI's expense.
It is reasonable to assume that after Sheran & Sterling assesses the tax aspects of it, it will issue a legal opinion. I think that if this LO is favorable, meaning that a buyer of WMI ( common shares ) will benefit from tax losses, them JPM should buy WMI. The price would depend on the seize of the tax benefits and the inexistence of any liabilities that are not offset by WMI assets, other than the tax benefits.
All I said is just a possibility, but makes sense.
I think what you are saying makes sense. I just wonder if the Wamu Bank's obligations that were not assumed by, could threat a possible deal?
Any thoughts?
It's strange. There are US$ 24 Bi assets missing. I understand this gap should correspond to the value of Wamu Bank.
However, doens't WMI hold Wamu Bank's shares? Even if these shares are worthless, shouldn't they be stated as an asset? Where are they?
In any case, it seems that everything will depend on the tax issues....
I am not sure. The 8k mentions that JPM bought the stocks of Wamu FSB.
What does it mean?
Based on the 8k the value of WMI will effectivelly be the NOL plus any other tax rebate that may come.
I have some doubts. Apparently, JPM bought the stocks of Wamu FSB and, therefore, assumed its debt? Ohter interesting point is that the payroll of WMI is being made by JPM?
In summary, if JPM buys WMI stocks, it will not acquire debt and will benefit from the NOL and other tax benefits. This means that, the same way Wells Fargo did with Wachovia, JPM can be interested in the NOL and other tax benefits, meaning that JPM can be willing to buy WMI stocks for something like US$ 2 dollars per share.
Any thoughts?
I think so. By the way, if WMI was just a fraud the US$ 4,4 Bi would not be deposited in Wamu Bank.
This money would long be gone in a tax haven account, somewhere else.
I just hope JPM doesn't own the US judiciary system to?!
I agree with you. The FDIC is doing their job being there.
However, I also think they are acting so as to help implementing a negotiated deal that will close this issue!
It should be very convenient to the FDIC to end this matter, before a new government takes over.
Here's an interesting article. It might give an explanation of why FDIC is still involved with WMI.
http://rds.yahoo.com/_ylt=A0geu7zSEjVJ7aAA9ZxXNyoA;_ylu=X3oDMTE0cG9xcGRiBHNlYwNzcgRwb3MDMTcEY29sbwNhYzIEdnRpZANGOTE5XzEyMQ--/SIG=12ior89fq/EXP=1228301394/**http%3a//www.mmdnewswire.com/washington-mutual-seizure-4071.html
If you say "pps" you are talking about shares. Which ones so?
How could JPM ofer to buy the deposits without taking the liabilities? I believe there were several covenants in place that would prevent that and JPM wouldn't try to make an offer that would violate such covenants plus pledges, negative pledges and events of default that would certainly trigger the early maturity of WMI, Wamu Bank and othe subsidiaries debts.
I don't think so. When JPM offered US$ 8 and later US$ 4 pps, they were going to buy the stock that was, and still is, publicly traded, meaning WMI stock.
The impression that this whole thing gives is that there is a negotiation going on. Some signs of it are the US$ 4,4 Bi still being held, top law firms hired to evaluate the NOL, creditors that are not taking all legal action sthey could and a complete and utter silence from the big shareholders.
Wonderful numbers. How did you get to them?
I read the original press release. The FDIC said that they did not expect any recovery for the investment made in Wamu Bank.
The FDIC couldn't, and didn't, say anything about WMI shares!!
Thank you!
No. I don't mean voting rights over the company. What I mean is that the company may make a proposal to preferred shareholders to redeem, convert or whatever, their shares, and the preferreds will convene and vote on what to do.
This voting among preferred shareholders may decide the fate of the preferred shares. Obviously, the preferred shareholders should not accept anything bad for them, but if they are also common shareholders, you never know what arragements can be made.
On a separate matter, do you kow if the NOL is included in the US$ 32 Bi of assets stated in WMI's bankruptcy filing?
They were not a scam until the world found out it was a scam.
Is the NOL included in the US$ 32 Bi assets, stated in WMI's bankruptcy filing?
Can a bankrupt company pay any dividend at all?
WMI and JPM could do something like GM. A debt-equity swap. See link below:
http://www.marketwatch.com/news/story/GM-developing-plan-swap-debt/story.aspx?guid=%7B7C52896B%2D3F6C%2D4DC0%2DA2CB%2DA5DB1240C6FC%7D
As to the preferred shares, I think it is important to pay attention how decisions are made. What I mean is that in a buyout JPM may make a proposal for preferreds and their holders will decide, by a majority or a qualified majority of votes, what to do. So, you can get big good or bad surprises.
I don't think you can treat shares of the same type differently. However, if you are averaging down your price, just as I am, you'd better pay attention to the tax aspects of it.
Do you see the possibility of JPM offering a buyout where WMI and Bank crditors would receive JPM shares, therefore settling this issue?
Thank you.
OK. But I think they would buy the Wamu Bank stock's assuming the debt of the Bank. Correct?
In this case, even with the Wamu's debt ( I am not talking about WMI debt ) JPM valued the Bank at US$ 8 per share. Correct?
Do you guys think that in a possible acquisition of WMI by JPM, the price paid for Wamu Bank ( I mean when JPM stole it ) can be reviewd or adjusted?
Does anyone know whether the price that JPM proposed to pay for Washington Mutual, in the past, applied to WMI and all its subsidiaries, including the banking operations?
I don't know about the NOL, but I think the US$ 4,4 Bi are included in the US$ 32 Bi of assets. Even like this, there should be equity left in WMI.
If we geet to the point of having preferreds being reimbursed first, we are talking about liquidation of the company. In this case, this will take several years to unwind.
Could be because when they seized the Wamu Bank and resold selected assets and liabilities to JPM, they deprived other Wamu's and even WMI creditors, not to mention WMI shareholders, of their ability to recover their money.
Naturally, the time of the seizure, a little before Congress approved banks bailout, will give grounds to enourmous lawsuits for losses and damages against the FED, FDIC and whatever else. In summary, I guess that the FDIC is trying to clean up the mess while they can.