Linda is biotch...! LOLz JayKay
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
FDIC enters into Washington Mutual bankruptcy fray
By RANDALL CHASE | 20 Oct 2008 | 11:09 PM ET
Text Size
WILMINGTON, Delaware - The Federal Deposit Insurance Corporation has challenged Washington Mutual Inc.'s request for bankruptcy court approval of a $4.4 billion cash transfer from JPMorgan Chase Co.
In court papers filed Monday, the FDIC said it may have "significant claims" against WaMu and to the funds, which WaMu contends are part of its bankruptcy estate.
WaMu, parent company of Washington Mutual Bank, filed for Chapter 11 reorganization along with its Washington Mutual Investment Corp. affiliate on Sept. 26. The filing came one day after the Office of Thrift Supervision appointed the FDIC as receiver for Washington Mutual Bank and its banking subsidiaries, including Washington Mutual Bank FSB.
After being appointed receiver, the FDIC sold WaMu's banking assets to JPMorgan Chase for $1.9 billion.
WaMu now claims that it is entitled to take possession of about $3.7 billion it had deposited in Washington Mutual Bank FSB, and another $707 million on deposit with Washington Mutual Bank prior to the receivership.
"The debtors believe there is no question that the deposits constitute property of the debtors' estates," WaMu said in a filing last week seeking court approval of an agreement it has reached with JPMorgan Chase to transfer the funds.
But the FDIC said in a court filing Monday that there is no need for the court to approve the transfer at this point, particularly since all the deposit account information has not been documented.
"In light of the FDIC's statutory authority, the seriousness of the issues, the amount of funds to be transferred and the fact that the debtors have no need to use the funds at this time, there is no need to disturb the status quo," attorney M. Blake Cleary wrote on behalf of the FDIC. "The debtors cannot pay their unsecured creditors prior to confirmation of a plan and they have substantial other resources to fund the administrative expenses of their Chapter 11 cases."
Attorneys for a group of Washington Mutual Bank noteholders also filed an objection to the fund transfer Monday.
"No bank would ever let someone walk up to a teller window and withdraw even one dollar from an account without confirming that the account was actually established and that the account actually belonged to the customer," the noteholders said in their filing.
The FDIC said it believes it can work out a stipulation with WaMu that would provide the FDIC the same protections afforded to JPMorgan under the proposed transfer agreement.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Yesterday's news but was not use anyone caught the key word there. I am nit picking but I thought I would point it out anyways.
http://www.cnbc.com/id/27288212/for/cnbc/
ARE BANK HOLDING COMPANIES A SOURCE OF STRENGTH TO THEIR BANKING SUBSIDIARIES?
"IN RESPONSE TO THE BANKING CRISIS of the late 1980s, Congress enacted two important reforms of bank holding company (BHC) regulation. The cross-guarantee authority granted to the Federal Deposit Insurance Corporation (FDIC) in 1989 through the Financial Institutions Reform, Recovery, and Act Enforcement (FIRREA) permits the insurer to shift any expected losses associated with the failure of a banking subsidiary onto the capital of non-failing affiliate banks. (1) While the banking industry has challenged this authority in the courts as a taking of private property without just compensation, the cross-guarantee provision has been upheld on at least two separate occasions. (2) This "use it or lose it" approach to bank capital has arguably aligned the incentives of a parent holding company with those of bank regulators when deciding when and how much to support a troubled banking subsidiary before it fails with resources from another banking subsidiary. In 1991, Congress also clarified the authority of the Board of Governors of the Federal Reserve under its "source-of-strength" doctrine through the Federal Deposit Insurance Corporation Improvement Act (FDICIA). The Federal Reserve had asserted since 1987 that the failure by a parent to act as a source-of-strength to a troubled subsidiary when resources were available would be "an unsafe and unsound banking practice" and subject to enforcement actions. However, this policy was challenged aggressively in the courts on the grounds that the Board had overstepped its regulatory authority. In FDICIA, Congress clarified that the BHC regulator does have the authority to force a parent company to guarantee the performance of a troubled banking affiliate as part of a capital restoration plan, but it ultimately limited the liability of the parent to 5% of the problem bank's assets. While the Federal Reserve could not compel a parent to use resources in a regulated non-banking subsidiary when such an action would have a "material adverse effect" on that subsidiary's condition, the Board was given the authority to order a parent to raise funds by divesting the non-banking subsidiary. (3) This later provision increases the leverage that the Federal Reserve has in convincing a parent holding company to use resources in non-banking affiliates. Together, these two reforms of BHC regulation constitute a significant strengthening of the legal backbone behind the source-of-strength doctrine."
"The banking industry has argued that the cross-guarantee authority of the FDIC makes the source-of-strength doctrine irrelevant, but this might not be the case for at least two reasons. (5) First, the FDIC does not have the authority to use capital invested in the non-banking subsidiaries of a BHC in order to defray the expected costs of bank failure. In contrast, the source-of-strength doctrine demands that a BHC use the resources in both banking and non-banking subsidiaries to support a distressed subsidiary bank. Second, the FDIC cannot exercise its authority until the subsidiary bank has already failed. In contrast, the source-of-strength doctrine involves the transfer of capital to a distressed subsidiary to prevent failure. This latter point is important given recent evidence that even healthy bank failures are followed by significant and permanent declines in real economic activity (Ashcraft 2005) Moreover, since the largest commercial banks in the United States are controlled by financial holding companies, which in turn own the largest investment banks, the equity that a parent holding company has invested in non-bank subsidiaries has important consequences for the real default risk of the affiliated banking subsidiaries and potential liability of the FDIC in the event of failure."
****Interesting: Was MaMu Holding notified or given the opportunity to inject cash into MaMu Bank? Wamu Bank had the Fed Window available, sufficient liquidity, the strength of it's Holding Company who had at least 4.4 Billion cash. WaMu was not give the opportunity to use its avenues of liquidity BEFORE the FDIC seizure...
****FDIC over stepped it boundaries? BK Judge possibly overturn JPM's purchase of WaMu Bank or order more money from JMP? Anything is possible, right?
****FDIC has no authority UNTIL the bank FAILS...
***FDIC is in DEEP SH!T
http://goliath.ecnext.com/coms2/gi_0199-7979553/Are-bank-holding-companies-a.html
Once again, In my opinion only.
Washington Mutual Tower or WaMu Center Building???? Two Different Buildings...
"Microsoft isn't saying why. Maybe the company is another angry WaMu creditor. But another possibility -- Microsoft covets the Washington Mutual Tower, prime office space in downtown Seattle."
http://www.alleyinsider.com/2008/10/what-does-microsoft-want-from-the-wamu-wreckage-the-building-msft-
WM office building is owned by Second and Union LLC, which is a wholly owned sub of WM the holding company, not the bank.
Properties
The Company’s primary executive and business segment headquarters are located at 1301 Second
Avenue, Seattle, Washington 98101. In March 2006, Second and Union LLC, a wholly-owned subsidiary
of Washington Mutual, Inc., in a joint venture with the Seattle Art Museum, completed construction of
the Company’s headquarters building and was granted an initial certificate of occupancy. At that time,
Second and Union LLC took ownership of a condominium interest in the 944,000 square foot office
tower and the attached 700 stall parking garage and the Company’s employees began to relocate to the
new space. Concurrently, the Seattle Art Museum completed and took ownership of 243,000 square
feet of future expansion space that Second and Union LLC leased, and the Company’s employees will
occupy, for a period of up to 25 years. The Seattle Art Museum has the right to cancel the lease, in
whole or in part, at any time after the tenth year of the lease. Certain leases covering downtown
Seattle locations were not renewed when their terms expired. The Company leases an additional
697,000 square feet in other downtown Seattle locations for administrative functions.
As of December 31, 2007, the Company’s owned and leased property in 36 states was comprised of
2,257 retail banking stores, 233 lending stores and centers and 290 administrative and other offices.
During 2007, the Company sold three administrative locations in California and Florida totaling
275,000 square feet and leased back 145,000 square feet. Administrative facilities involve the ownership
or leasing of approximately 2.6 million square feet in California, 1.1 million square feet in Texas,
825,000 square feet in Florida and 463,000 square feet in Illinois.
What are you talking about? Different angles? Everyone is entitled to their opinion... Right? You are entitled to yours.
Only thing is, 4.4 billion belonging Wamu Holdingis is irrefutable.
Judge can undo the sale of Wamu Bank to JMP on the basis of fraud and unjust enrichment. Will that happen? Maybe maybe not. Too much publicity especially during this credit crunch and puts US financials and agencies in a worse light than it already is.
Maybe a quite settlement.
Again, IMO...
Actually, if you look at the bottom of my posting, will will see "The above is my opinion only."
No one said that money goes to party of defense. Money goes to bk Estate of the Debtor for the benefit of paying creditors.
Certain creditor are paid in a certain sequence. Certain creditor have to file proof of claim if they want to get paid.
Judge can summon what he wants for the benefit of the Estate. That is not a "wildly ungrounded opinion(s)."
If you know Bankruptcy Law, when a receiver is "receiving" money, it is for the benefit of the Bankruptcy Estate. When an owner of an apartment building goes BK, Debtor's income producing assets are placed into a receivership for the benefit of the Estate. Some times the Debtor will voluntarily place income from assets in to the Estate w/o receivership.
You will also note, that before a person/entity goes BK, the Court will look at what was paid out or what assets were transferred within a certain time period. If the Court finds it preferential, the Court has the authority and power to undo any payment/transfer to said party and summon any funds or assets back for the benefit of the Estate. The Court has a LOT of authority and can basically do what it wants under the Bankruptcy Code.
imo
"As for, "Therefore, 4.4 Billion PLUS 1.9 Billion will shortly be summoned to the Estate," that's a wildly ungrounded opinion with no basis for certainty."
FDIC has no claim over the 4.4 billion that belongs to Wamu Holding Co. That has already been stipulated between the parties.
Wamu Bank was purchased by JP Morgan, therefore JP Morgan bought the assets of Wamu bank. Not only did JP Morgan obtain the assets, they also assumed the liabilities and FUTURE liabilities of Wamu Bank.
Any bonds issued by Wamu bank are the liabilities of Wamu Bank and not Wamu Holding.
FDIC took Wamu Bank from Wamu Holding as the receiver and sold the asset (Wamu Bank) to JP Morgan. JP Morgan, for consideration of the purchase, paid 1.9 billion for said asset. 1.9 Billion was received by FDIC as the receiver on behalf of Wamu Holding.
Now that Wamu Holding Co. filed BK under Title 11, ANY and ALL assets (4.4 Billion), income, sale, proceeds from sale (1.9 Billion), etc., belong to the TRUSTEE of the Estate and is put under his/her control during the BK Proceeding.
Therefore, 4.4 Billion PLUS 1.9 Billion will shortly be summoned to the Estate.
The Judge want all money that belongs to Wamu Holding placed in the CONTROL of the TRUSTEE where it belongs. The Judge will not allow the creditors nor FDIC dictate the law in a BK proceeding, i.e. transfer funds in to an escrow account for the benefit of "certain" creditors or any Moving Party.
All Creditors have to wait in line in their specific order if they want payment. There is no deviation from that. Why even try?
I have more to write, but I going to watch Heros!!!
The above is my opinion only.
Not edited for spelling or grammar.
Pretty obvious he sold.
Just so you know, law firm personal, really know nothing about trading the markets etc. Also, usually they will have to tell you a general answer to limit their liability.
Notice when you are in Court, their are notices everywhere that states that no one (clerks of the courts) can give you legal advice. They are just limiting their liability exposure to you or anyone who asks.
Only the Judge/Trustee knows, but in this case, the few higher ups may know since NO DIRECTORS, EXECUTIVES, CEO, CFO, ETC. has NOT sold any shares (that I am aware of).
Please correct me if I am wrong.
Thanks.
Under Bk proceedings, all lawsuit are under automatic stay. As for class actions, I do not know. Someone else may chime in.
When you are a corporation and have your asset taken away from you, you have to "Reorganize" and divert money flow.
Wamu Holding filed Ch 11 Reorganization to restructure its self with the help of the Reorganization Officer recently hired.
Ch 11 puts an automatic stay as to all creditors while Wamu Holding reorganizes itself.
Ch 7 is for liquidation. Wamu Holding is only CH 11.
Any litigation coming from anywhere as to the loan practices will be against Wamu BANK since it was the one producing the mortgages and loaning money out. Wamu Holding is only at arms length and is a "HOLDING COMPANY". Hence the various assets or entities owned by Wamu Holding.
It will be up to the Judge to decide who is liable.
In my opinion, when you buy an entity, such as Wamu BANK, that produced and loaned money on mortgages, that entity is liable to any lawsuits arising from that action. Not only is Wamu BANK liable, the buyer/purchaser of that entity also BOUGHT THE LIABILITY including any FUTURE liability arising from said action.
Note: Unedited for spelling and grammar due to laziness. The above is my opinion and should construed as such.
Oh dang, the ASK is thinning!! BID stacking!!!Come on, lets EXPLODE!!! DOW is up 200 plus!!!
Tiny sells going through, BUT Large buys coming in. BID getting stacking up. We may blow though technical wedge.
Can't do that while in BK Ch 11. So you know the float won't change.
Funny these MMs do to try and get cheap shares. I think MMs needed shares to sell for the break of the 10s. Too fast of a recovery to be a real sell off.
It appears we will probably break the 10/11 todays.
10 bid increasing / 10.5 asking getting hit and thinning
Broke!!! 10s NEXT STOP 12s hehee
Those are pretty LARGE buys coming in on the ASK.
HUGE volume spike!!!!!!
Exactly, with the approx $5 Billion going back to Washington Mutual Holding Inc., all the traders/investors are competing with the shorts that need to cover. Who know, JMP may be buying the float slowing and to alert the masses! Too many are competing for shares at this point.
With the Reorganization Company hired/in process of being hired, WAMUQ has a very likely chance of withdrawing Bk Ch 11 petition or reemerging from bk Ch 11.
More assets than liabilities.
the shorts needs shares.
imo
Means there are no shares available. Shares are scarce...
I think that the MMs do this on purpose to throw off the charts for people like us who watch the charts during market hours.
It could not have been the next day after BK for K-mart shares to be wiped out. I really do NOT believe your owned K-mart shares after that statement.
During BK proceedings, you have to file pleadings before a reorganization plan is filed. In the organization plan spells out who gets what.
In WAMUQ's case, they do not even know who their creditors are.
They cannot just take the shares from you. You find out about the shares when they file the reorganization plan which will not be for quite some time.
Well, I can tell you this. When WAMUQ.pk was going up, WAMUQ.MX was never heard of. When WAMUQ.pk was falling, WAMUQ.MX was up HUGE.
So maybe it means the opposite.
How can there be a settlement with no litigation. People who will receive proceeds from a buyout will only be shareholders of a future disclosed date, not retroactive.
The above is contingent upon other factors.
That is because there is more than one MM on the bid. If one MM drops the Bid, then the MM above will accumulate the shares. It is basically, first come, first served... MMs do not want to fight over shares and try to make "civil" to not initiate a "squeeze" between themselves.
You got to remember, there is about 200 million shares short. The amount of shares naked is unknown. It use to be over 400 short. Short covering has been occurring...
Shares are scarce... About 80% of the shares are owned by institutions. MMs and shorts needs YOUR shares to cover.
News is eminent.
5 Billions belongs to Holding Co.
Once there is an equity holding committee, WAMUQ shareholders are able to be represented at the table and have a say as to the disposition of assets of the Holding Co.
Too many to list. Too lazy to list them all.
No ruling on shares for Wed. To find out about shares, wait the reorganization plan is filed, which is probably a long ways from now.
I believe the conversions were halted or no longer convertible.
Your choice. Pref have little to no volume. Good IF you want to keep through BK, but good luck getting out of Perf. At least common has LIQUIDITY/VOLUME. In the event you need to get out of common, there are buyers. In the event of a buyout, common is the place to be.
imo
In Bankruptcy proceedings, the Debtor must list any POTENTIAL creditors that may or may NOT be owed any money.
The reason why it is long is because JP Morgan has cut off access to Wamu's computers and therefore have not access to who Washington Mutual Holding's creditors are. Hence the reason why the list is so long.
The Judge will assign the debts to either Wamu Holding or JP Morgan. Some of these creditors are no even owed any money.
This is only a bankruptcy proceeding formality. Nothing more.
Actually it means it is under Reorganization and not bankrupt. It has more assets than liabilities.
Maybe someone who has a Washington Mutual mortgage can chime in and tell us where the payment is sent to and payable to who. That way, we can find out if it is a subsidiary of WM Holding etc.
Also, I recall Washing Mutual Holding acquired several mortgage companies.
I think he would say,
Judge: "JPM was unjustly enriched by taking over an entity with over 300 billion in assets for a bargain basement price of 1.9 billion."
Judge: "Off the record, how were you able to get such a sweetheart deal?"
JPM: "Off the record your Honor -- It is who you know, not what you know! -- off the record of course..."
I believe it is Oct 15.
It is in anticipation of the BK hearing. The smart ones are loading up now prior to the hearing.
You seem to Flip - Flop . . .
In his pockets.