Can someone please help with the following questions?:

1) Did JPM attorneys speak on the settlement in today's hearing?

2) If so, what did they say? Are they parties to this deal?

3) Were the JPM and FDIC releases addressed, i.e., are they staying the same?

I'm sorry, I was not able to listen in. Am in Hawaii for work this week, and am 6 hours behind EST.

Thanks in advance for answers to the above.

Jack

Good morning Michael! Like you, I am thrilled that my attorney friend correctly predicted a term sheet was in the works. The alternative (that SG was incompetent or corrupt) was just unfathomable!

He and I will discuss today's developments at some point today, and I will share this thoughts, as usual.

The billion dollar question (literally) is JPM's position in all of this... do they whip out the checkbook now, or down the line in Collyer's court?

My friend and I are about a year into this case, and sympathize for all of you who have had to endure more than we have. We know the hell you've been through (we went through another BK and came out the other side on that, too)... Fortunately, it looks like an end is in sight. How good the end is remains to be seen.

GLTA!

Jack

SilverAnt: very interesting! From what document/page number did you paste that excerpt? I'd like to read more of it, in context.

Thanks.

-Jack

If we end up back in Collyer's court, it may be important to deposition Bair regarding conversations she and Dimon may have had, to support a bid-rigging anti-trust allegation. Those violations carry treble damages, and are potentially much bigger than this bankruptcy proceeding.

That's why I care.

Will Bair be protected from prosecution/subpoenas/depositions after she leaves FDIC?

Point taken. I was focused on your "piece of new WMI", as opposed to "control of new WMI". Big difference.

I'm sorry, maybe you didn't see this?

"Washington Mutual Inc (WAMUQ.PK) reached an agreement on Friday that would give shareholders control of the company after it exits bankruptcy, according to a report by Bloomberg News."

http://www.reuters.com/article/2011/05/20/washingtonmutual-idUSN2025397120110520

Well said, Milk Duds - I concur. I believe our interests are now aligned with the hedgies (at least in Walrath's court), which is fantastic.

Forget the litigation "fund" - getting the hedgies to vote with us to shoot down the POR is priceless. FDIC and JPM will be scrambling to figure out how to get out of this now.

Don: You're ever-positive attitude is uplifting... but there are just too many unknowns at this point.

I'm happy that it appears that commons will not be wiped out... but we just don't have much info yet. And I've been burned too many times by premature celebrations to bust out the bubbly just yet.

That said, I'm encouraged by where this is going.

Take care,

-Jack

MilkDuds: Thanks for the prespective, especially with regards to the mid-day release of news. Very interesting.

I hope your prediction plays out.

-Jack

Hello William! A lot of posts to get through today, but I always read the posts of those that I "follow", and noticed my name in this post of yours.

Yes, I am as cynical as you (and I've been accused of being too cynical - ha!) I remained on the board's sidelines after JMW screwed up the last confirmation opinion, always reading what you, Don, Catz, and many other fine posters here write, trying to run it through my "cynic's filter". Two recent developments that made it through thaty filter were the numerous repeated depo postponements and missed objection deadlines. Those were a tell SG was in the driver's seat.

As I've stated over the past few days, what has me most excited is Nate Thoma's allusions to CDS improprieties of some insiders. This is a stealth bomber, flying low and quiet, unrecognized and underappreciated, ready to blow this thing even more wide open. And I think it will be a major reason JPM will be compelled to play ball and throw money equity's way (in return for releases, of course.) The CDS market is shadowy and unregulated - the only way to know what positions were taken and when would be if a court ordered the production of those docs. That is what Thoma is threatening.

(Imagine the potential blowback of any news that shows JPM profited to the tune of tens of billion of dollars by betting against WAMU with credit default swaps after they acquired info on the bank during their due diligence between March and September 2008! Not sure Obama's favorite banker can withstand that one...)

I spoke with my attorney colleague today... and while he and I are ecstatic that it now appears equity will not be wiped out, it's just too soon to really comment, as the full details of the settlement are not yet known. As we move forward and get more info, I'll continue to share his thoughts.

(As you'll recall from my posts from a few days ago, my friend's experience negotiating intellectual property cases led him to believe that SG's missed deadline was not due to incompetence, but rather was a sign that a term sheet of a settlement was in place. Today, my friend's inclinations were proven right, happily.)

GLTY.

-Jack

Nice to know we agree.

No way SG ever relies on JMW for anything ever again - except to sign off on a plan to which all parties agree.

Nelson and Stark brilliantly applied Spansion to this case - and JMW looked the other way. SG can't trust her to decide squat.

IMO

JFB

I don't think the EC will risk "arguing" an objection in front of Walrath anymore. She can't be trusted to rule according to law, after her egregious decisions in her first opinion. And they are up against equitable mootness of their appeal.

I'm confident SG will use IT knowledge of the SNH's, and the threat of discovery into JPM's CDS activity, to effect a new global settlement. FDIC kicks in some dough (i.e., our tax refunds at a minimum) to get their all-important releases.

This will be settled globally and presented to Mary to rubberstamp, IMO.

-Jack

HROLLER: Thanks for the reminder... I posted my attorney's thoughts on the U board yesterday, but forgot to post here. Here ya go:

Spoke briefly with my attorney friend... Some thoughts:

No way would Rosen give us an extension unless he absolutely had to. As we all know, that motherf'er wants nothing more than to kill equity - and soon. If SG didn't have something significant to leverage, Rosen would be rushing us through confirmation hearings on June 6.

This, friend's, appears to signify a serious crack in Rosen's grip on the case. I think Rosie agreed to this because he knows a settlement is forthcoming... and a settlement is the only thing that will spare him from the professional/personal humiliation that awaits him if they go to confirmation.

Also, this June 10 objection deadline gives the EC very little time to integrate the info from the 5/31 Owl Creek depo into their objection. Watch to see if the Appaloosa and Centerbridge depos are postponed beyond 5/31 - that will be a tell that either the deadline will be pushed back again, or is irrelevant.

Settlement is still very much in play here. Unfortunately, the waiting game continues...

-JFB

Catz,
On behalf of those that agree, I appreciate your contributions to this board - irrespective of your relaxation level.

Your rationale, dispassioned approach is a welcome flight away from the "2x Value!" crowd.

Please keep chiming in.

Jack

Sly: you're right, the CDS issue is pre-petition...

BUT - it goes to the concept of "unclean hands" - which may impact her approval of any GSA that includes such a party.

If this goes as we expect, my atty friend and I will pick up the first round for everyone in Vegas, for sure.

It would be an honor.

GLTA

Yes, William, the last time I was this optimistic was after Nelson's Spansion argument during the last confirmation hearing. And then LIBR dropped the ball on that.

But I think the EC has now effectively taken this out of Judge Mary's hands. I don't think they trust her anymore. I think they are leveraging the threat of fines and possible DOJ involvement to get an EC-friendly settlement that will end this nightmare.

Nate's objection provided me with a ray of hope with regards to drawing in JPM to settlement... If SG has the goods on JPM betting heavily against WAMU with CDS's after duing their due diligence in March 2008, or has made it known to JPM that they will ask LIBR to approve discovery on that - oh baby, watch out.

-Jack

Spoke briefly with my attorney friend... Some thoughts:

No way would Rosen give us an extension unless he absolutely had to. As we all know, that motherf'er wants nothing more than to kill equity - and soon. If SG didn't have something significant to leverage, Rosen would be rushing us through confirmation hearings on June 6.

This, friend's, appears to signify a serious crack in Rosen's grip on the case. I think Rosie agreed to this because he knows a settlement is forthcoming... and a settlement is the only thing that will spare him from the professional/personal humiliation that awaits him if they go to confirmation.

Also, this June 10 objection deadline gives the EC very little time to integrate the info from the 5/31 Owl Creek depo into their objection. Watch to see if the Appaloosa and Centerbridge depos are postponed beyond 5/31 - that will be a tell that either the deadline will be pushed back again, or is irrelevant.

Settlement is still very much in play here. Unfortunately, the waiting game continues...

-JFB

I think JPM can be dragged in to IT allegations around their credit default activity during the time they were conducting due diligence on WAMU. (Nate's objection alludes to it.)

With CDS's, you don't even need to own the underlying bonds. JPM could've been paid (potentially billions) on those CDS's when WAMU went under, on info that only they had at their disposal. (See the link to jimmyclark's YMB post that I posted earlier today.)

I say JPM is included in a global settlement, so that they avoid that discovery from ever taking place.

"In light of ongoing discussions with respect to the Modified Plan"...

Love it!

I have a call in to my attorney friend... will report back to you all later.

-Jack

"In light of ongoing discussions with respect to the Modified Plan"...

Love it!

I have a call in to my attorney friend... will report back to you all later.

-Jack

I've spent days thinking about it, and I can't see any more positive development in this case than the EC's voluntary non-filing of an objection.

Without that objection filed, the EC cannot introduce new arguments at the confirmation hearing; they're limited to their previous objections. Those objections don't detail the extent of the SNH's insider trading, or PJS's valuation, or the extent of undervalued NOL's, etc.

Agree to Owl Creek's fifth depo extension, ostensibly giving the EC one week between that depo and a confirmation hearing? No friggin' way.

My hunch is a term sheet is in place that compensates for not filing an objection.

My hunch is we see a settlement before June 6.

GLTA

-Jack

Great post by jimmyclark on Y:

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=te&bn=86316&tid=741174&mid=741174&tof=1&frt=2#741174

I think Nate and Bet have caught JPM's hand in the CDS cookie-jar... and this may be the needed impetus for JPM to want to settle with Equity.

GLTA

Jack

Number 19 in Nate's objection (credit default swaps): might that be a "shot across the bow" that implicates JPM?

I find it curious that he offered to provide details to the court later, but not here, in his objection (unlike the wonderfully detailed first objection.)

I think this might be a "I know what you did, and I'll spill the beans if you won't play ball."

Coupled with the absence of SG's objection by the deadline last Friday, this may be a "tell" that the settlement goes beyond just the SNH's, or should.

At least I hope so.

(Sorry, not able to cut and paste.)

All IMO, of course. But, like Uz, what do I know...

My understanding is that a "settlement" would need to take place with the DOJ itself, separate from any settlement with the EC.

For example, the DOJ settled with Eli Lilly for civil and criminal acts:

http://www.justice.gov/opa/pr/2009/January/09-civ-038.html

Jack

P.S. I hope the amounts paid by the JPM/FDIC/hedgies in this case eclipse those in the Lilly case.

Regarding BDO:

Does anyone else find it strange that this filing is seeking retroactive approval to April 18?

I think SG pinned the hedgies against the wall, brought in BDO to show them the "true" value of NOL's/WMMRC (independent of Rosen's bullish!t Blackstone valuation), and then negotiated a term sheet/agreement based on BDO's work.

Now that the term sheet is in place, it's time to get the court to approve paying BDO for their work before announcing the results of that work - a SNH ankle-grabbing settlement.

I do not think we will have a POR hearing other than that which approves a SG-mediated settlement.

IMO, of course. GLTA.

Jack

Yes, LG, I recall you saying as much...

And skeptical me suspended belief - until Friday came and went. But you nailed it, for sure.

Equity-friendly news will be forthcoming, IMO.

Yes, Don, you did tell me to have faith.

But that is pretty damn hard to do when a federal judge screws you (us).

This missed deadline issue, though... well, this is our doing - not the judge's. SG - by their own choice - elected not to file an objection. Not because they're lazy, or stupid, or incompetent - but because they must have been given something in return to make it worth foregoing such an objection. Can't wait to see what that something is!

Not celebrating just yet - but I'm pretty damn close.

GLTY.

Jack

With regards to the hedgie depos:

The term sheet also explains the EC's willingness to postpone the depos. Owl Creek delayed for the fourth time... most firms would view that as obstructionist, and file a motion to compel. SG hasn't done that; the reason being that a term sheet makes the depos unnecessary.

Chiron, I agree with you about bopfan. I see she now claims that she didn't think SG would ever file an objection. Whatever.

I don't often speculate here - but when I do, my speculation is based on the facts of the case relative to existing law, not emotion. (You may recall, I was "convinced" that Walrath would rule that the anlaysis done by the debtors on the likelihood of success on the claims was insufficient, based on Spansion. Instead, she inserted herself as an expert witness and determined the analysis was ok. An egregious decision, and one of the bases of the EC's appeal.)

The missing of Friday's deadline, I am now convinced, is the most positive development we've seen in a LONG time. SG is a world-class firm; they do not "forget" about deadlines or "file late". Their objection was almost certainly the tool with which they leveraged the interested parties to agree to a yet-to-be-disclosed term sheet and agreement. I can only imagine how damaging that objection might have been if it were filed for the world to see.

I was wrong before (though, in my defense, only because JMW didn't do her job), and I may be wrong here. But there really is no good, justifiable reason SG could have for missing such a monumental deadline - other than a binding term sheet that is suitable to the EC and SG.

I don't think there will be a confirmation hearing.

Jack

As many of you may recall from some of my previous posts, I often consult with an attorney colleague of mine who is also invested in this case. After Friday came and went - with several "missing" objections - we chatted yesterday about what possibly might explain SG's reasons.

1) Failure of PACER (not likely)
2) Abject incompetence and failure to perform on behalf of SG (possible, but unlikely)
3) a term sheet that has been agreed upon by the parties of interest, the details of which will be completed and signed prior to the confirmation hearing.

My colleague, an intellectual property attorney, has been engaged in the timing of such deadlines and term sheets, as patent applications and response to the patent office (like objections here) are time-sensitive and face hard deadlines. The only way an attorney like my friend - or Susman - would miss a deadline like Friday's is a term sheet - which, by the way, is BINDING - that would make missing a deadline moot.

Good news coming, folks. GLTA.

-Jack

Uz, you nailed it. Susman's objection, due by Friday, will delineate our path forward.

I'm expecting fireworks.

Jack

JPM and FDCI managed to convince the judge that a decision adverse to JPM could cause another bank run, and she didn't want to be responsible for that.

Of course, that was a week before JPM doled out billions in bonuses to their employees.

JMW is weak. And that's what worries me with regards to the IT allegations against the SNH's. We know they're guilty... but will she show the courage to agree?

Time will tell.

Jack

Catz, a question based on what you said here:

Which predominant view - that she is "Honorable", or that her decisions are remarkably flawed?

Claw: I hope things play out as you describe. With so much "settlement" talk, I was hoping things wouldn't get this far. Now, things will be decided by JMW, who, as we all know, (and I'll put this nicely) has been seriously lacking in good judgment in the past.

Jack

Many respected posters here were CERTAIN that the hedgies would NEVER be deposed. It appears we were wrong... and so thoughts turn to "why would the hedgies go through with the depos".

Because they feel they have a viable defense, that's why. That defense will be an "ethical wall" - the people negotiating the GSA were not in any involved in trading.

We know it's BS - but now we have to rely on JMW agreeing with us... and that hasn't worked out so well for us in the past.

-Jack

This is what I posted in post #285310: