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Global Corporate Trust
60 Livingston Avenue
EP-MN-WS1D
Saint Paul, MN 55107
usbank.com
Notice to Holders of:
MEDLEY LLC
6.875% Notes due 2026
(the “6.875% Notes”)
and
7.25% Notes due 2024
(the “7.25% Notes”)
CUSIP Nos.: 58503Y105, 58503Y2041
Escrow CUSIP Nos.: 585ESC015, 585ESC0231
NOTICE OF DISTRIBUTION PURSUANT TO BANKRUPTCY PLAN
Please forward this Notice to beneficial holders.
U.S. Bank National Association serves as trustee (the “Notes Trustee”) under that certain Indenture,
dated as of August 9, 2016 (as amended, restated, modified or supplemented from time to time prior to
the date hereof, the “Indenture”), by and between Medley LLC, as issuer (the “Issuer”), and the Notes
Trustee, pursuant to which the 6.875% Notes and the 7.25% Notes (together, the “Notes”) were issued.
Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the
Indenture, the Plan (as defined below), or the prior notices of the Notes Trustee, as applicable.
As previously advised, on March 7, 2021, the Issuer filed a voluntary petition for reorganization
under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware (the “Court”), under Case No. 21-10526 (the “Bankruptcy Case”).
As further previously advised, on October 18, 2021, the Court entered an order [Docket No. 445]
(the “Confirmation Order”) confirming the Modified Third Amended Combined Disclosure Statement and
Chapter 11 Plan of Medley LLC (as modified, amended, or supplemented from time to time and together
with all exhibits and supplements thereto, the “Plan”) in the Bankruptcy Case.
As further previously advised, pursuant to the Plan and Confirmation Order, on the Effective Date
of the Plan, the Notes were cancelled as debt instruments and Holders of the Notes received pro rata
beneficial interests in the Liquidating Trust established pursuant to the Plan. A copy of the Liquidating
Trust Agreement was filed with the Court as Exhibit A to the Notice of Plan Supplement [Dkt. No. 371].
1The Notes Trustee is not responsible for the selection or use of CUSIP numbers or Escrow CUSIP numbers. They are included in this
notice solely for Holder convenience.
As further previously advised, the Notes are registered to a nominee of the Depository Trust &
Clearing Corporation (“DTC”), and any distributions under the Plan on account of the Class 3 Notes Claims
will be made by the Notes Trustee through DTC based upon the amount of Notes each Holder beneficially
held at the time of cancellation at DTC. All such distributions under the Plan on account of Class 3 Notes
Claims will be made to the Notes Trustee in the first instance and are subject to the prior payment of the
Notes Trustee’s fees and expenses as set forth in the Plan.
Copies of the Confirmation Order, the Plan and Liquidating Trust Agreement can be found at:
http://www.kccllc.net/medley or at https://www.deb.uscourts.gov/. The Notes Trustee makes no
recommendation or representation regarding these websites.
DISTRIBUTION PURSUANT TO BANKRUPTCY PLAN
On August 29, 2022, promptly following its receipt of such funds from the Liquidating Trust, the
Notes Trustee will distribute the aggregate amount of $10,000,000.00 to Holders of Class 3 Notes Claims
through DTC. The distribution represents a distribution of 2,039.23487907 per $1,000 principal amount
of the Notes (the “Allocation Rate”):
CUSIP Escrow CUSIP Notes Outstanding Amount Allocation Rate per $1,000 Rate per Note
58503Y105 585ESC015 2,143,800.00 $4,371,711.73 2,039.23487907 2.03923487907
58503Y204 585ESC023 2,760,000.00 $5,628,288.27 2,039.23487907 2.03923487907
Saccullo Business Consulting, LLC, was appointed as the Liquidating Trustee pursuant to the
Confirmation Order, the Plan, and the Liquidating Trust Agreement. Holders interested in contacting
the Liquidating Trustee can do so by calling (302) 643-9175 or emailing SBC@MedleyLiqTrust.com.
Any questions or inquiries about the Bankruptcy Case or the Liquidating Trust should be directed to
the Liquidating Trustee. The Notes Trustee has no duties under the Plan or the Liquidating Trust
Agreement and has no ongoing role in the Liquidating Trust or the Bankruptcy Case.
The Liquidating Trust is a grantor trust for income tax purposes. Holders are encouraged to
review the Liquidating Trust Agreement in its entirety, and, to the extent necessary, contact their own
tax advisors. The information in this Notice is only intended to be a summary. The Notes Trustee
provides no tax advice. The Notes Trustee further makes no recommendation or representation and
gives no investment or legal advice regarding the Notes, the Indenture, or the Bankruptcy Case, the
Confirmation Order, or the Plan.
Questions concerning this notice should be sent via email to Mr. Ian Bell, Vice President, U.S. Bank
National Association, Global Corporate Trust at ian.bell@usbank.com. Holders with other questions may
contact Bondholder Services at (800) 934-6802, option #7.
The Notes Trustee may conclude that a specific response to particular inquiries from individual
Holders is not consistent with equal and full dissemination of information to all Holders.
U.S. Bank National Association, August 26, 2022
as Notes Trustee
Trustee shall commence distribution within fourteen (14) days of the date of this Order.
Order date was 7/29/2022.
Please post to the board when distribution reaches your account to inform other investors.
Order on Chapter 7 Trustee Final Report (Related Doc # 714 ). Approving for Richard Myers, fees awarded: $203102.92, expenses awarded: $5061.31. The chapter 7 Trustee's Final Report and Proposed Distribution is APPROVED. The Trustee's fees, expenses, and bond premium as shown therein are approved and the Trustee shall commence distribution within fourteen (14) days of the date of this Order. ORDERED by Judge Thomas L. Saladino (Text only order) (ADIclerk) (Entered: 07/29/2022)
SIGMUND S. WISSNER-GROSS
direct dial: 212.209.4930
fax: 212.938.2804
swissnergross@brownrudnick.com
October 12, 2021
Via Email and UPS
Board of Directors
Blueknight Energy Partners G.P., L.L.C.
6060 American Plaza, Suite 600
Oklahoma City, Oklahoma 74135
Attn: Duke R. Ligon, Chairman
RE:
Ergon, Inc. Offer to Acquire Common and Preferred Units of Blueknight Energy Partners, L.P.
Dear Mr. Ligon:
We are counsel to DG Capital Management, LLC, which owns and manages affiliated funds (collectively, “DG Capital”) that, we understand in aggregate, are the largest single holder of common units of Blueknight Energy Partners, L.P. (the “Company”). We write, on behalf of DG Capital, to raise preliminary objections by DG Capital to the October 8, 2021 offer of Ergon, Inc. (“Ergon”) to acquire the common units of the Company at a cash purchase price of $3.32 per unit, and preferred units at a cash purchase price of $8.46 per unit. DG Capital believes that the proposed offer is not in the best interests of the Company’s common unit holders (other than Ergon), materially undervalues the Company’s common units, and improperly seeks to shift value to preferred unit holders. Moreover, there are significant and overlapping conflicts of interest and self-dealing concerns here, with Ergon controlling the Board (a majority of the members of the Company’s Board are Ergon designees), a wholly owned Ergon entity serving as the general partner of the Company, and, as Ergon conceding in its October 8 offer letter, Ergon (directly or indirectly) owning a majority of the Company’s preferred units.
It is the position of DG Capital that the proposed cash purchase price of the common units (under a variety of metrics) is materially lower than the present fair market value of such common units. While the October 8 offer letter claims that the proposed consideration “represents a premium of approximately 5% and 3% to the 20-day volume-weighted average price of the Partnership’s common units and preferred units of $3.16 and $8.21, respectively, on the Nasdaq Global Market as of October 7, 2021,” it is the position of DG Capital that the Company’s common units have been artificially depressed in price by the Company and that their fair market value materially
LOGO
Blueknight Energy Partners G.P., L.L.C.
October 12, 2021
Page 2
exceeds the proposed offer price of $3.32 per common unit. Whether the common units have been artificially depressed in price as a result of willful or intentional conduct by Ergon and its representatives on the Company’s Board in an effort to later line the pockets of Ergon, or others, is outside the scope of this letter, and may need to be determined at a later juncture, if the Company insists on moving forward in discussions with Ergon regarding the proposed transaction at the current offer price. Our client is further concerned that the timing of the proposed offer, just as Congress is about to approve a major infrastructure bill that, according to the Company’s CEO, would generate substantial revenue and increased EBITDA for the Company over the next several years, suggests that Ergon, which together with its affiliates owns approximately 60.4% of the outstanding preferred units (in addition to owning approximately 6.6% of the outstanding common units), has majority control of the Company’s Board through an Ergon-owned affiliate which is the general partner of the Company, exercises effective control over the Company, is advancing a proposed offer that represents self-dealing at its worst, all to the detriment of the common unit holders. While we understand that a “Conflicts Committee” of the Board of Directors of Blueknight Energy Partners G.P., L.L.C., will according to the October 8 offer letter “review, evaluate and negotiate the terms of a transaction,” DG Capital reserves all rights as to the purported independence of the Conflicts Committee and its role in reviewing, evaluating and negotiating the terms of a proposed transactions, and does not waive any rights in such regard.
DG Capital’s concerns include, but are not limited to, the following four illustrative issues:
1.
The Company has successfully engaged over the past several years in a restructuring effort, that has resulted in a material deleveraging of the Company. The Company’s capital needs are modest, at best. The Company has substantial liquidity and balance sheet capacity, which should have resulted in larger distributions being issued to the Company’s common unit holders. DG Capital believes that the Company, in an effort to suppress the trading value of its common units, has kept its distributions artificially lower than they should have been. The fair market value of the Company’s common units, under a variety of valuation metrics, is materially higher than the proposed $3.32 per unit offered by Ergon for the common units. The role of Ergon, as well as its affiliate general partner of the Company, and the Directors of the Company in not distributing appropriate value to the common unit holders, and whether any Board decisions were made to artificially suppress the market value of the common units to unjustly favor Ergon and its affiliates, remains to be determined. We would caution both the Conflicts Committee and the Board that the common unit holders constitute the true holders of the residual interest in the Company and are owed fiduciary duties. At a minimum, it would appear to be a breach of fiduciary duty for the Board to enter into or approve a proposed transaction that strips common unit holders of such value and improperly shifts value to preferred unit holders.
2.
The Company’s preferred unit holders should be paid far less, under various valuation metrics. Such preferred units have a conversion strike price of $6.50. The proposed offer of $8.46 for preferred units, when Ergon and its affiliates own approximately 60.4% of such preferred units, represents a transparent and flagrant effort by Ergon and the Company to improperly shift value to the preferred unit holders at the expense of
LOGO
Blueknight Energy Partners G.P., L.L.C.
October 12, 2021
Page 3
the Company’s fulcrum security holders, i.e., the common unit holders. Moreover, providing each preferred unit with merger consideration that is a substantial premium to either its liquidation preference or conversion value represents a fundamental misallocation of value that instead should be paid to holders of the common units. It would appear to be a breach of fiduciary duty for any Board member, under the circumstances, to enter into or approve a proposed transaction which shifts value from common unit holders to the out of the money (on an as converted basis) preferred unit holders. While DG Capital appreciates that the Company’s preferred unit holders may welcome such an unwarranted windfall, proper corporate governance does not sanction such transparent and improper value shifting to benefit a controlling holder such as Ergon.
3.
The timing of the proposed offer could not be more suspect. It is well known that a major infrastructure bill is about to be approved by Congress. The Company will be a major beneficiary, for years to come, of the infrastructure bill. Indeed, on a recent investor call for the 2Q21 Quarterly Results, the Company’s CEO stated that the federal infrastructure bill could result in an increase in annual federal spending on road construction and highway work of close to 30%, resulting in at least three types of concrete financial benefits to the Company. He first noted that the federal infrastructure bill “could translate into anything from 5% to 8% higher EBITDA or operating margin for [the Company’s] asphalt business.” He further noted that the federal infrastructure bill “supports more favorable [contract] renewal environments.” Finally, he noted that the federal infrastructure bill would help to generate new organic growth projects for the Company. See Q2 2021 Earnings Call, at pages 11-12. As you presumably are aware, back in May/June 2021, when it was anticipated that a federal infrastructure bill would pass, the Company’s common units traded over $4 per unit. Putting aside the issues discussed above regarding the Company’s artificial suppression of the value of the common units and efforts to improperly shift value to the Company’s preferred unit holders, if, as expected, the federal infrastructure bill is passed and becomes law later this year, there will be significant potential upside for the Company. Accordingly, Ergon’s cynical effort to steal value and lock the Company into a proposed merger transaction with a steep discount price being offered to common unit holders, just before the infrastructure bill is passed, should be summarily rejected. It is rank self- dealing, and neither the Board nor the Conflicts Committee should sanction it.
4.
We also note that Ergon, which controls the Company as noted above, appears to be orchestrating the proposed transaction to have the Company otherwise fail to comply with best corporate governance practices under Delaware law. For example, the proposed offer does not indicate that the transaction will be conditioned on the approval of a majority of the disinterested common unit holders. This further brings into focus the degree to which the proposed offer reeks of self-dealing and constitutes nothing more than an attempt by Ergon to unjustly enrich itself at the expense of the common unit holders.
LOGO
Blueknight Energy Partners G.P., L.L.C.
October 12, 2021
Page 4
While DG Capital reserves all rights, please be advised that DG Capital is prepared to engage, in good faith, with the Board and/or the Conflicts Committee to ensure that common unit holders are treated fairly and that, if a transaction is to occur, it be done with value allocation metrics that are consistent with proper corporate governance to assure that fiduciary duties owed to the common unit holders are upheld. Based upon the foregoing, it is DG Capital’s position that the fair market value of the common units exceeds $6.00 per unit and that is without accounting for the additional potential upside to the value of the Company’s common units resulting from the passage of the proposed infrastructure bill, which the Company expects to be significant. The foregoing represents the preliminary analysis of DG Capital with respect to the proposed offer, and DG Capital reserves the right to supplement this letter as its investigation and analysis of the Ergon offer and the proposed transaction continues.
Our client would like to further present its views to you and other members of the Conflicts Committee and/or to the Board, and proposes to do so within the next week. Please let us know your availability at your earliest convenience.
Sincerely,
BROWN RUDNICK LLP
/s/ Sigmund S. Wissner-Gross
Sigmund S. Wissner-Gross
The sale of the Remnant Assets to Oak Point Partners is for $12,500
Reply from Trustee, Rick Meyers, to inquiry about status of Acceptance Insurance.
"Closing on the sale of the subsidiary previously approved by bk court awaits approval of Texas state insurance commission (buyer plans to merge the sub into a Texas entity). I know of no obstacles and hope we close this month or so, then we do final tax return and sale of remnants."
Post Confirmation status report
UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF LOUISIANA IN RE: CASE NO. 17-11213 FIRST NBC BANK HOLDING COMPANY, SECTION A DEBTOR CHAPTER 11 POST-CONFIRMATION STATUS REPORT
PLEASE TAKE NOTICE that First NBC Bank Holding Company (the “Debtor”) has made progress on the requirements for consummation of the Second Amended Joint Chapter 11 Plan of Reorganization for First NBC Bank Holding Company [Doc. 621] (the “Plan”), as immaterially modified and confirmed by the orderentered on May 15, 2020 [Doc. 863], as set forth below1. Plan Funding, Payments and Distributions to Date
1. The First Round Investment of $5,000,000, required for Plan funding, was provided to the Debtor in exchange for, inter alia, shares of the Debtor’s common stock.
2. The Debtor has made all statutory quarterly fee payments to the Office of the U.S. Trustee and all payments toward all other Allowed Administrative Claims as required by Section 2.1 of the Plan.
3. The Debtor has contributed $300,000 to the Litigation and Distribution Trust, as required by Section 6.1 of the Plan.
4. No Class 1 NQDC Priority Claims were Allowed; and, thus, no Plan payments were required by the Debtor with respect to this Class. 1 Unless otherwise defined herein, all capitalized terms shall have the meaning assigned to them in the Plan.
5. The Debtor has made all distributions to holders of Uncontested Class 2 Claims (general unsecured claims) required by the Plan. Specifically, a total of $3,437,879.14 has been paid to the following holders of Allowed Class 2 Claims:
U.S. Bank National Association
American Mutual Life Association
Federated Mutual Insurance Company
Federated Life Insurance Company
Federated Service Insurance Company
Farmers National Bank of Emlenton
Hare & Co, LLC
Cincinnati Insurance Company
Cincinnati Life Insurance Company
Fidelity & Guarantee Life Insurance Co.
Zurich American Insurance Company
FDIC as Receiver for First NBC Bank
Omnivere, LLC
Ashton J. Ryan, Jr.
Cleary Gottlieb Steen & Hamilton, LLP
Skadden, Arps, Slate, Meagher & Flom, LLC
Computershare, Inc.
Consilio, LLC
Public Co. Accounting Oversight Board
Financial Accounting Standards Board
Dean Haines
Michael Lulich
Fred V. Beebe
Robert Bradford Calloway William Roohi Kevin Patrick Reed
Michael L. LeBeau
George L. Jourdan
First Citizens Bank
6. Pursuant to the Plan, the Debtor is not required to make Plan payments to any other Classes of Creditors. Future Payments and Distributions Required by the Plan
7. Pursuant to Article VI of the Plan, there are three sources of funding for Claim payments: (a) Debtor’s Cash on hand; (b) the First Round Investment; and, (c) the Litigation and Distribution Trust.
8. Following payments and/or distributions outlined herein, all of the Debtor’s available Cash on hand has been disbursed.
9. The Debtor has set aside the sum of $502,120 from the First Round Investment for Contested Class 2 Claims pending resolution of objections to the allowance of such Contested Class 2 Claims. 10. The Litigation and Distribution Trust Assets consist of, inter alia, $300,000 cash transferred to the trust upon the Effective Date and all claims and causes of action transferred by the Debtor pursuant to the Plan. The Litigation and Distribution Trustee is responsible for making payments to creditors after the Plan Distribution Date. Other Post-Confirmation Progress
11. All property of the Debtor has been transferred to the Litigation and Distribution Trust or has revested in the Debtor. 12. The Indenture involving $60,000,000 in Certificated Securities has been cancelled, the Indenture Trustee has been relieved of all obligations thereunder and all related securities have been cancelled.
13. The Debtor has been rebranded as Golden Mountain Financial Corp.
14. Redomestication of the Debtor from Louisiana to Delaware has been completed.
15. The Debtor held a special meeting where shareholders approved, inter alia, the redomestication and rebranding of the Debtor as set forth in paragraphs 13 – 14 above.
16. Pursuant to Section 6.12 of the Plan,the Company has taken steps to formally terminate its prior Securities and Exchange Commission reporting obligations and the quotation of shares of its common stock on the OTC markets and all common stock of the Debtor has been reissued with associated trading restrictions.
17. The Debtor has hired employees, retained business consultants and other professionals for its business operations. 18. The Debtor has secured a $5 million working capital facility from the First Round Investors pursuant to a revolving loan and security agreement between the parties, from which $1 million has been drawn thus far by the Debtor. Pending Litigation Matters
19. Pursuant to the Plan, the Litigation and Distribution Trustee has assumed the Committee’s role in the settlement of certain claims for the benefit of the Debtor’s creditors and has been actively involved in multi-party litigation to enforce such settlement; and, is investigating additional claims for the benefit of its constituents, i.e., holders of Allowed Claims in all Classes except for Class 1.
20. As of the Effective Date, the appeal taken by the United States of America (“United States”) on behalf of its Department of Treasury remained pending before the U.S. District Court for the Eastern District of Louisiana (“District Court”). On March 31, 2021, the District Court entered a Memorandum Opinion and Order affirming this Court's Ruling on the United States'
Objection to Plan Confirmation and its Order Confirming the Reorganization Plan. On May 26, 2021, the United States filed a Notice of Appeal2 to the U.S. Court of Appeals for the Fifth Circuit with respect to the final judgment entered by the District Court on March 31, 2021 in favor of the Debtor and the Official Committee of Unsecured Creditors.
Respectfully submitted by: /s/ Barbara B. Parsons WILLIAM E. STEFFES (#12426) BARBARA B. PARSONS (#28714) THE STEFFES FIRM, LLC13702 Coursey Boulevard, Bldg. 3 Baton Rouge, Louisiana 70817 Telephone: (225) 751-1751 Fax: (225) 751-1998 Email: bparsons@steffeslaw.comCounsel for Debtor
21. Should the United States proceed forward with prosecution of its appeal to the Fifth Circuit, it appears to the Debtor that moving to dismiss such appeal based on, inter alia, the doctrine of equitable mootness maybe appropriate.
Enterprising Investor
Could you contact me at gsgardipee@gmail.com.
Will explain after contact.
Medlay Management did not pay the quarterly interest on the 6 7/8% debt (MDLX) today, February 16, 2021. The interest also remains unpaid on the 7 1/4% bonds (MDLQ). The company has 30 days to pay interest due MDLQ and MDLX before it is officially in default.
https://www.sec.gov/Archives/edgar/data/1611110/000143774921003006/mman20210216_8k.htm
Peter Kravitz joins the board
https://www.sec.gov/Archives/edgar/data/1611110/000143774921002335/mman20210209_8k.htm
https://www.provincefirm.com/our-team/peter-kravitz/
MDLX bond interest due 2/16/2021
We can expect another 8-K with a non payment notice.
Medley misses bond payment on 7.25% bonds due February 1, 2021.
https://www.sec.gov/Archives/edgar/data/1611110/000143774921001699/mman20210201_8k.htm
Estate expenses will be a factor.
Extending the math from what we know.
$1,279,000 6/02/20 income
$1,327,539 11/24/20 income
$4,000,000 1/12/20 DARAG Sale
----------
$6,606,539 Total
-231,837.75 attorneys paid thru June 2020
-2,078.27 accounting docket 664
-14,200.00 Deloitte tax opinion on NOL's docket 666
----------
$6,358,422.98 Net (so far)
3,795,000 trust preferred shares
Wisdom Of Jesse Livermore
“After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: it never was my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight!
The Court Hearing has concluded.
Sale at $4,000,000 subject to the the two approvals described by Enterprising Investor:
" The Sale Closing is conditioned upon: (a) the approval of the Form A filed by the Successful Bidder with the Nebraska Department of Insurance and (b) a final and non-appealable Order from the State Court, dismissing the Estate's subsidiary, Acceptance Insurance Company from its rehabilitation proceedings."
The most interesting part of the court hearing occurred when Rick Myers said the Nebraska Insurance Commissioner's Office had indicated the company was ready to come out of rehabilitation on its own because Acceptance Insurance management had done a good job of rehabilitation.
Court Hearing to accept the Stalking Horse offer of $4 million is scheduled for 1:00PM today 1/12/2021
December 4, 2020
Tomorrow is the court hearing to approve the stalking horse sale starting at $4,000,000.
The assets being sold include:
Net Admitted Assets $6,819,309
Non Admitted Assets 4,497,558
Total $11,316,867
What about those non admitted assets:
(from the 3rd quarter report)
At September 30,2020 approximately $4.2 million of bonds and $0.2 million of cash equivalents are in trust and pledged to Clarendon and Praetorian to secure Acceptance's obligations under the reinsurance agreements. In addition to securing amounts assumed by Acceptance from Clarendon and Praetorian under the reinsurance agreements, these trust balances also secure, in part, reinsurance balances due to Clarendon Reinsurers. The total amounts of the pledged assets have been non-admitted as the funds are not readily available to meet policyholder obligations.
Acceptance has not established a liability as the amounts pledged and nonadmitted far exceed any reasonably estimated loss to Acceptance from such guarantees based on management's review of the current status of this situation.
The "Clarendon Reinsurers" companies already have $10,000,000 originally ceded loss and loss adjustment expense reserves above and beyond the $4.4 million non-admitted assets.
In addition, Acceptance has $85,098,643 of unused operating loss carryforwards that will go along with the sale. They belong to the insurance company.
December 4, 2020
Tomorrow is the court hearing to approve the stalking horse sale starting at $4,000,000.
The assets being sold include:
Net Admitted Assets $6,819,309
Non Admitted Assets 4,497,558
Total
Motion for sale of Subsidiary Acceptance Insurance Company
1)The Stalking Horse is DARAG North America
2)The Stalking Horse bid is $4,000,000
3) Date of court hearing to approve Motion for Sale is 12/4/2020
4) Sale includes the surplus note for $20,000,000.
5) Purchase Price Adjustment. The Purchase Price is based on an adjusted net asset value
(“NAV”) of Six Million Eight Hundred Nineteen Thousand Three Hundred and Nine Dollars ($6,819,309)
(the “Signing NAV”). The Purchase Price divided by the Signing NAV is the “Applicable Percentage
6)1.4.3 Notwithstanding anything in this Agreement to the contrary, the Closing NAV shall not include the approximate One Million Three Hundred Twenty-Seven Thousand Dollars($1,327,000) 2019 trust release related to the “Praetorian Trust”
7) 6. Reliance Insurance Company.
The Company, and former affiliates Acceptance Indemnity Insurance Company (“AIIC”) and Redland Insurance Company (“RIC”), filed proofs of claim on an aggregate basis in the Reliance Insurance Company (In Liquidation) case filed in the Commonwealth Court of Pennsylvania (Cause NO.: 1 REL 2001) (the “Reliance Proofs of Claim”). With respect to any proceeds or distributions related to such Reliance Proofs of Claim (the “Reliance Proceeds”), the Company’s portion of such Reliance Proceeds (with Company’s portion including any Reliance Proceeds with respect to RIC),
total approximately ninety-four percent (94%) of the Reliance Proceeds (the “Seller’s Share”), with the remaining approximately six percent (6%) of any Reliance Proceeds belonging to AIIC (“AIIC’s Share”).
The parties agree that the Seller shall be solely entitled to the Seller’s Share of the Reliance Proceeds. Upon receipt of any Reliance Proceeds from the Reliance Proofs of Claim, the Company shall promptly pay the Seller’s Share to the Seller and AIIC’s Share to AIIC, and in no event later than ten (10) business days after
the Company is in possession of receipt of such Reliance Proceeds. If Closing has occurred, Purchaser shall cause Company to pay such Reliance Proceeds received by Company to Seller and AIIC as set forth above. Seller may sell its Seller’s Share in the Reliance Proofs of Claim, in its sole discretion, to any third
party (the “Reliance Claim Buyer”) at any time. Upon written notice by Seller of such sale to Company,Company shall pay, and after Closing Purchaser shall cause Company to pay, any Reliance Proceeds that Company receives related to Seller’s Share to the Reliance Claim Buyer, in accordance with the same terms and conditions it would have paid such Seller’s Share to Seller under this Section 6. Any such Reliance Proofs of Claim and Reliance Proceeds shall not be considered when determining the Closing NAV.
8) Initial overbid would be $4,286,000. In which case the stalking horse would receive a breakup fee of $186,000. Bids after the initial overbid would be in $50,000 increments.
What is Nonadmitted Balance
A nonadmitted balance is an item on an insurer’s balance sheet that represents reinsured liabilities for which the reinsurer has not provided collateral. Nonadmitted balance entries reduce the policyholders’ surplus because they represent a liability.
BREAKING DOWN Nonadmitted Balance
Insurance companies cede risk to reinsurers in order to reduce their exposure to the risks associated with the policies that they underwrite. In exchange for taking on some of the insurer’s risk the reinsurer is provided a fee, often a portion of the premium. The reinsurer is thus responsible for claims made up to a certain level, and is required to demonstrate that it will be able to handle those claims if losses do arise.
Insurers may require a reinsurance company to provide assets as collateral as proof that the reinsurer will be able to cover a risk if a claim is made against the policy. If the reinsurer is required to provide collateral then this will reduce the nonadmitted balance, and thus increase the insurer’s surplus. Reinsurers and other captive insurance companies typically use a letter of credit (LOC) as the source of collateral. The letter of credit is issued by a bank. If the ceding insurance company does not require the reinsurer to provide collateral to cover the nonadmitted balance and the reinsurer becomes insolvent, the insurance company will treat the nonadmitted balance as the loss reserve and write the balance off.
The nonadmitted balance represents the portion of unearned premiums and loss reserves that do not count on the insurer’s statutory statements, which is where the insurer accounts for any capital and surplus required to maintain its license to conduct insurance business. Because the balance is nonadmitted, the insurer cannot count the balance toward its solvency ratio or any regulatory required reserve level, meaning that the loss reserve associated with the nonadmitted balance cannot count toward the general loss reserve. For this reason, insurance companies have an incentive to require reinsurers to provide collateral.
Examples of Nonadmitted Assets
Some examples of nonadmitted assets include assets consisting of goodwill, furniture and fixtures, automobiles, agent debt balances, accrued income on investments in default and other items. They are excluded in order to present a balance sheet that is as conservative as possible. However, a rise in the proportion of nonadmitted assets to admitted assets is an indication that a company may be investing in nonproductive or risky assets. However, this isn't always this case. To determine one way or another, an insurance company's financial's must be closely scrutinized to determine if the proportion of nonadmitted assets on the balance sheet is truly an indicator of nonproductive or risky assets.
The WMB Noteholders Class 17B that received $15 million on 1/10/2020 is a subset of the total class 17B.
The WMB Noteholders include Thrivent Financial for Lutherans, AEGON USA Investment Management, LLC (AEGON Life Insurance (Taiwan) and Transamerica Financial Life Insurance Company), PPM America, Inc. (The Prudential Assurance Company, Ltd., JNL VA High Yield Bond Fund, Jackson National Life Insurance Company of New York, and Jackson National Life Insurance Company), New York Life Investment Management LLC, Legal & General Investment Management (Legal & General Investment Management America), The Northwestern MutualLife Insurance Co. (Northwestern Mutual Life Insurance Co., Northwestern Long Term Care Insurance Company, Northwestern Mutual Series Fund, Inc. and its Select Bond Portfolio, and Northwestern Mutual Series Fund, Inc. and its Balanced Portfolio), ING Direct NV, Sucursal en España, and their affiliates, who are the legal or beneficial holders of, or have control or discretionary investment authority with respect to, in excess of $600 million in aggregate principal amount outstanding of Senior Notes and Subordinated Notes issued by Washington Mutual Bank
PostCog, your information was exactly correct. Hats off to you.
$1,426,235.17 was the total distribution and $.37582 is the actual per share distribution.
On October 21,2019 there was a court hearing held regarding claims objections filed by parties to Acceptance Insurance. An audio of that hearing is filed as Docket #629 on Pacer.gov.
A) Mr Myers, the Trustee, gave a background of the case and made some important points which are worthy of discussion.
B) The parent company, AICI, has $84,625,062 in operating tax loss carry forwards available. Under Section 382 of the IRS Code, at least 50.1% of a reorganized company would have to include parties to the bankruptcy as stockholders in order to use the $84,625,062 NOL.
C) The parent company has one remaining subsidiary that is coming out of "Rehabilitation" and will be an active insurance company. That subsidiary is Acceptance Insurance Company (AIC). AIC insures agricultural crops for farmers. Mr Meyers believes he can sell AIC as an active insurance company for approximately $5 million dollars.
Under items B) and C) above, there are opportunities which investors should take a look at before discarding.
Referring to C) The Deutsche Bank, Trust Preferred are owed $119,704,189.92 and as a group could easily bid for the AIC subsidiary but would forgo the $5,000,000 in cash that Mr Meyers anticipates getting.
Referring to B) we could issue new shares of the parent company, reorganized AICI, to both common and trust pref holders. Trust Pref holders would own approximately 90% of the new common. This would be similar to what WMIH (Washington Mutual)and NOVC (Novastar) did in their reorganizations. AICI would be a shell company and would have to have a rights offering to raise money and then buy a business in order to use the NOLs.
Combination of B) and C) would involve keeping AIC the subsidiary and issuing $5,000,000 in debt to the trust pref. Then issuing new common with 90% going to trust pref. Trust Pref would exchange its claim for $119,704,189.92 for the $5,000,000 in debt plus 90% of the common. I believe this would meet the requirements of IRS section 382.
I would like to thank Enterprising Investor for the information he has provided. As a result of his input, I did this further due diligence. We should at least discuss these options before discarding them.
I'm a little miffed by the number $1,426,235.17 as a distribution. The reason being that in docket 641 filed on 11/12/2019 the Trustee is clearly identifying Deutsche Bank Trust Company for a proposed payment of $1,729,616.30 at this time. That would leave a remaining balance of $75,234.26 in the Trust to cover operating expenses.
Deutsche Bank Trust filed claim #67 in the bankruptcy and its allowed claim is $119,704,189.92 or $31.5426 per each Trust Preferred share.
$1,729,616.30
-$1,426,235.17
______________
$303,381.13
We will have to wait and see what happened to the $303,381.13.
Docket 644 Filed 12/05/2019
Order Approving (RE: related document(s)640 Chapter 7 Trustee Interim Final Report and Application for Compensation filed by U.S. Trustee US Trustee). The pleading was filed, served and noticed pursuant to local rules. No timely resistance/objection was filed. The Chapter 7 Trustee Interim Final Report is approved and the Application for Compensation is approved. Movant is responsible for giving notice to parties in interest as required by rule or statute. ORDERED by Judge Thomas L. Saladino. (Text only order) (drs) (Entered: 12/05/2019)
The Summary of the Trustee's Final Report, (docket 641) is showing a
recommendation for disbursements totaling $1,730,393.89.
This includes the following:
1) $69,606.11 Trustee Meyers
2) 777.59 Claim #164 Roger Stordahl
3) 1,729,616.30 Deutsche Bank Trust (AICPQ)
________________
$1,730,393.89 Total
$1,729,616.30 / 3,795,000 shares = $.4557
Tanjazielman post # 502283 1/02/2018
“- According to the corporation registry of California, WaMu 1031 Exchange was dissolved on the 8th of December (WMILT entity) of 2017;
- on exactly the same date Long Beach, Wamu Capital Corp, WMMSC, WMAAC and another entity (former WMB entities) merged into JP Morgan according to corporation registry of California;”
Azcowboy post #505580 1/24/2018
“Washington Mutual Mortgage Securities Corporation (WMMSC), WAS NOT' -
SOLD - to JPMC as many were originally lead to believe', ... (JPMC only received the rights to service')
WMMSC, as the "Master Servicer" was a subsidiary of WMI (the parent corp), ... and, in being a subsidiary of Washington Mutual Inc., (WMI), ... WMMSC' was NOT ABLE TO BE SOLD, to JPMC', ...”
Comment: Perhaps a little more due diligence in this area.
Very good work Dmdmd2020. Here is some additional information for you.
The Deutsche Bank Trusts are shown here in Exhibit A
ww.globic.com/wamurmbssettlement/pdfs/2017-04-26 Duff Report.pdf
All the totals are not given in Exhibit A so I will give them to you. This information is as of April 26, 2017.
A) Original DB Trusts $159,827,434,887
B) Current DB Trusts $13,068,808,338
C) Current % not liquidated A)/B) = 8.18%
D) Liquidation % = 1-8.18% = 91.82%
January 4th hearing cancelled
http://www.kccllc.net/wamu/document/0812229180102000000000002
Here is another site that lists security changes by venue.
Nothing showing.
https://www.otcmarkets.com/market-activity/venue-changes
A business with leverage for WMIH ...KKR
How the Great Fannie and Freddie Dustup Could End
Senate legislation would set up private competitors to the housing finance agencies and remove their government backstops
By Aaron Back
Dec. 21, 2017 1:28 p.m. ET
12 COMMENTS
After years of political stalemate over the future of Fannie Mae and Freddie Mac, things are beginning to move in Washington. The big news for investors is that the ultimate endgame for housing finance is starting to take shape in Congress.
In a surprise announcement on Thursday morning, the Treasury Department and the Federal Housing Finance Agency said they would allow the government-controlled housing finance giants to build up limited capital buffers of $3 billion each. This represents a shift from the existing arrangement under which both companies’ net profits are to be paid to the federal government until their capital buffers go to zero.
Nonetheless, the companies remain wards of the state and their ultimate future remains uncertain. This is underscored by the fact that both companies will be making large draws on the Treasury, likely around $14 billion between them, once the tax overhaul becomes law. The companies will have to write down the value of deferred tax assets on their books, creating an accounting loss. The circular flow of money between the companies and the Treasury will remain in place regardless of Thursday’s announcement.
Back and ForthCumulative total draws from and dividendspaid to the U.S. TreasurySource: The companiesNote: Data is from 2008 through 3Q 2017
Draws from TreasuryDividends to TreasuryFannie MaeFreddie Mac$0 billion$50$100$150$200
Far more significant for the long-term future of the companies—as well as for banks, homeowners and investors in mortgage-backed securities—is a plan being discussed in Congress. As The Wall Street Journal has reported, bipartisan Senate legislation that could be introduced early next year would set up private competitors to Fannie and Freddie, remove the two companies’ government backstops and replace it with an explicit government guarantee on mortgage-backed securities.
If properly designed and implemented, such a plan could ensure a continuation of affordable housing for American families, accessible securitization outlets for mortgage lenders, and a stable mortgage-backed securities market for investors. The plan keeps Fannie and Freddie intact rather them winding them down, which could mollify holders of the two companies’ shares, who fear being wiped out.
If the aim were to eliminate Fannie and Freddie, as earlier plans proposed, it would make little sense now to let them begin accumulating capital. But if the aim is to put them in competition against new private companies, Fannie and Freddie will need some capital to compete effectively.
The real significance of Thursday’s decision is that it dovetails with the direction being set in Congress. With the White House and lawmakers from both sides of the aisle seemingly on the same page, durable housing finance reform looks possible in 2018.
William C. Gallagher
Mr. Gallagher is our Chief Executive Officer and has served as a director since May 2015. Mr. Gallagher previously served as a consultant of WMIH since November 21, 2014. Mr. Gallagher served as an Executive Vice President and member of the board of directors at Capmark from November 2014 until May 2015. Mr. Gallagher served as President and CEO of Capmark from February 2011 to November 2014. He was Executive Vice President and Chief Risk Officer of Capmark from March 2009 to February 2011. Prior to joining Capmark, Mr. Gallagher was the Chief Credit Officer of RBS Greenwich Capital from September 1989 to February 2009. Mr. Gallagher is a member of the Corporate Strategy and Development Committee.
https://www.sec.gov/Archives/edgar/data/1119605/000127727705000627/prosupp2005wl1.pdf
From the Wamu Long Beach LBMLT 2005-WL1 Prospectus page S-24:
"A financial guaranty insurance policy or policies (collectively, a ìNIMS Policyî) may be issued by the NIMS
Insurer, if any, covering certain payments to be made on NIMS which may be issued by an affiliate of the Depositor or
of Greenwich Capital Financial Products, Inc. or by one or more entities sponsored by an affiliate of the Depositor or of Greenwich Capital Financial Products, Inc. after the Closing Date.
What are NIMS?
DEFINITION of 'Net Interest Margin Securities - NIMS'
A security that allows holders to access excess cash flows from securitized mortgage loan pools. In a typical net interest margin securities (NIMS) transaction, excess cash flows from the securitized mortgage loan pools are transferred to a trust account. Investors in NIMS receive interest payments from this trust account.
BREAKING DOWN 'Net Interest Margin Securities - NIMS'
The creation of NIMS is facilitated by the fact that numerous securitized mortgage pools contain subprime mortgages with interest rates that are much higher than the typical rates offered to mortgage-backed security (MBS) investors. The bigger the difference in these interest rates, the more the excess cash flows generated by the MBS and consequently the higher the value of the NIMS. Of course, the value of the NIMS can decline rapidly if there is a significant increase in the default rate of the mortgages held in the MBS, and a subsequent decrease in excess cash flows.
Comment: LBMLT 2005-WL1 is one of the Deutsche Bank Trusts. It appears Mr. Gallagher, as Chief Credit Officer of Greenwich from 1989 to 2009, has a very intimate understanding of the DB Trusts.
After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made big money for me. It was always my sitting.
......Jesse Livermore
On 11/7/2016 Boarddork made the following post #466927 on IHUB. His discussion centered on the retained interests in the QSPEs.
1) Just look at income from the mortgage strips and certs income stream only..... $40B before FJR interest rate per 8 years....
"from WMI 2007 10-k...pg 5
" For other retained interests in securitization activities (such as interest-only strips and residual interests in mortgage and credit card securitizations), the discounted cash flow model used in estimating fair value utilizes projections of expected cash flows that are greatly influenced by expected prepayment speeds and, in some cases, expected net credit losses or finance charges related to the securitized assets. Key economic assumptions and the sensitivity of retained interests fair value to immediate changes in those assumptions are described in Note 7 to the Consolidated Financial Statements – "Securitizations." Changes in those and other assumptions used could have a significant effect on the valuation of these retained interests. Changes in the value of other retained interests in securitization activities are reported in the Consolidated Statements of Income under the noninterest income caption "Loss on trading assets" and in the Consolidated Statements of Financial Condition as "Trading assets."
WMI consolidated states it posts the income value from securities under Trading Assets in the Consolidated Statements of Financial Condition. So:
2007 WMI 10-K
Trading Assets:
2007 $4.5 Billion income generated
2006 $7.8 Billion income generated
2005 $7.2 Billion income generated.
Kerry Killenger testified and we know losses were not that bad in 2008. Additionally what DB settled for in damages as trustee, is minute compared to the assets they managed.
If 2008 is the bottom and a slow recovery from there......to now 2016......could one assume an average of $5B per year + interest? That's $40B + 8 years interest.....AND THIS IS JUST CERT INCOME ( 1) above).
2) But Wait there is much more.......There is still value in liquid and illiquid mortgage assets that were temporarily pledged or lent to the time-capped securitizations per each prospectus; and once that yoke is run-off over time per each prospectus (nearly done now), then the underlying mortgage assets remaining (not refi'd or foreclosed) are free to return to use for the actual holder - WMI (remember WMI 10-k $240B mortgages held in portfolio prior to BK). And eventually we should see something reflective of that.
What's interesting about run-off mode is that everything was flash frozen in safe harbor and legal isolation. A performing institution would be continuously reinvesting mortgage liquidation cash into funding new loans......but when musical chairs stops in receivership/bankruptcy. .....the CASH piles up and can't be reinvested by the parent. It just collects like a thousand raindrops in a bucket. 8 years of accumulations will be a hell of a lot more, than a snapshot in time, pre 2008 imo.
3) and Wait a bit more.....there's also credit card securitizations, commercial loans, HELOCs (2nds, 3rds), etc, etc.
WMI is a cash machine for legacy tracking marker holders who released.
Below is a short FDIC paper describing the structure of SPE/QSPEs and showing diagrams of how they work. This paper is for credit card receivables but is basically the same for mortgages, auto loans etc.
https://www.fdic.gov/regulations/examinations/credit_card_securitization/pdf_version/ch2.pdf
SPE / QSPE
Special Purpose Entity (SPE) and Qualified Special Purpose Entity (QSPE) are corporate entities created for the purpose of securitization of mortgages and other financial debt instruments. The securitizations are created in a two step process. After Washington Mutual Bank (WMB) accumulated a significant volume of originated mortgages, they sold these bundled mortgages to a wholly- owned bankruptcy remote SPE, WMI Mortgage Inc., out of Vernon Hills, IL. WMI Mortgage would then transfer ownership of the mortgages to a securitization vehicle, typically a QSPE trust. The QSPE trusts would often have different levels of risk, called tranches, which they would market to institutional investors. WMI would retain the bottom highest risk tranche and would often invest in senior tranches along with other investors. The money received from the QSPE investors would then be paid back to WMB for the mortgages sold and the whole cycle would begin all over.
FASB Statement 140 and its Amendments described the qualifications for these remote securitizations.
“The transferred financial assets have been isolated from the transferor --- put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership. Transferred financial assets are isolated in bankruptcy or other receivership only if the available evidence provides reasonable assurance that the transferred financial assets would be beyond the reach of the powers of a bankruptcy trustee or other receiver for the transferor or any consolidated affiliate (WMB) of the transferor that is not a special-purpose corporation or other entity designed to make remote the possibility that it would enter bankruptcy or other receivership (bankruptcy-remote entity).”
In 2005 Lawarence R Gee, Deputy Controller Washington Mutual wrote to the FASB commenting on an FASB 140 Amendment. Mr. Gee stated “In the event of its (WMB) insolvency, the FDIC would be appointed as receiver…. The FDIC would not reclaim, recover, or recharacterize as property of WMB the transferred assets that have been transferred by WMB to the transferee in connection with the specified securitization transaction pursuant to the FDIA, Federal Deposit Insurance Act.”
None of these QSPE trust assets are reflected anywhere in the bankruptcy Disclosure Statement for WMI or the receivership of WMB. The word QSPE or SPE is nowhere to be found. The designation of Bankruptcy Remote meant that the transferors (WMI, WMB, WMB/fsb etc) no longer owned the assets but the stockholders of WMI retained an interest in them, no longer as stockholders because of the bankruptcy, but as escrow holders.
Even more noteworthy, the “escrows” that we received as Preferred, Common, and REIT Preferred holders of WMI are nowhere identified in the WMI Disclosure Statement. While the word escrow is frequently used, it is not used in the context of the escrows we received, but rather in reference to the Disputed Equity Escrow, Tax Escrow, DIMEQ Escrow, Escrow Partners LP ( the FDIC ) etc.
The reason the HJMW prevented Joshua Hockberg from investigating and reporting on the QSPE mortgages was because of their status as bankruptcy remote. They were simply not part of the WMI bankruptcy. At that same court hearing, Rosen referred to them as the “retained assets” and there status was simply, that they were retained.
We can make several conjectures based on this information.
1) The WMILT will not handle any assets related to QSPEs because they are Bankruptcy Remote.
2) What the WMILT has disclosed is what we will get through LTIs, at best somewhere around $88 million.
3) Distributions from QSPEs to escrows will be made outside of bankruptcy, most likely from DTC directly to escrow holders.
4) The QSPE pool of trusts is quite large, having now been in existence for over 30 years. Of course as loans were refinanced, mortgages paid off, and homes sold, these pools would decline over time. WMI’s interest in these pools would be a fraction of the total value of the pools.
5) The function of WMIIC may have been to monitor the income flows from the QSPE assets. The QSPE assets would not be reflected on WMIIC’s balance sheet or WMI’s balance sheet because the QSPE’s were bankruptcy remote.
6) These assets will not come back to WMIH in an unliquidated form because they will remain in the QSPE trusts and only the cash distributions from the trusts are distributed to investors.
7) WMIH may regain servicing rights to the QSPE trusts, but not ownership of the actual trust assets.
8) There may be other assets outside of the QSPE trusts. The creditor stance that WMI holds against the FDIC may point to other assets.
9) The QSPE assets are not reflected on the WMB bankruptcy statements from the FDIC because the QSPEs are bankruptcy remote and WMB has no ownership interest in the assets. They bundled them and sold them to the SPE.
10) The Deutsche Bank trusts are QSPEs.
Hotmeat your statement reads:
"I'm having a hard time figuring out how the 75%/25% split can only be applied to WMI assets and not WMIIC's, when WMI owned it all."
You are entirely correct.
WMIIC has only one stockholder and it is WMI(WMILT). All of the escrow assets held by WMIIC must flow back to its sole stockholder WMI(WMILT)and split according to the 75/25 "negotiated" agreement.
WMIIC never had any public traded stock or stockholders, although I can see how some WMI common stockholders may wish otherwise.
Footnote 1 relates to actions that were taken on August 23, 2013. It refers to the 2nd paragraph in Judge Walrath's Order. It is describing the sequence of events.
The entire order when read as a whole, dismisses the employee claims.
The PIERS should be paid off November 1st. As a result, all creditors will have been paid off and the waterfall is going to drop down to equity. Equity may receive LTIs because there should be several million left in the WMILT. These LTIs, if granted, would be separate from escrows, which I consider to be the off balance sheet assets held by WMIIC. WMILT could use LTIs as the vehicle to move everything back including escrows or escrows may continue to stand on their own.
November 1st is the next major date to watch, but prior to that WMILT may request to vacate the reserve that was set up for employee funds.
This is a necessary step for the court to take, paying off the creditors before equity can receive anything.
This is significant and events are moving rapidly.
The Ohio filing
IN THE UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO EASTERN DIVISION
STEPHEN ROSENBAUM,et al.,Plaintiffs,
v.
JPMORGAN CHASE BANK, N.A.,Defendant.
Case No. 2:16-cv-281
Judge: Hon. George C. Smith
Magistrate Judge: Hon. Terence P. Kemp.
NOTICE OF DISMISSAL
OF CASE WITH PREJUDICE
All Plaintiffs
-
Stephen Rosenbaum, Frank E. Williams, Jr., Eric Wagoner, David Eidelman, Ian MacKenzie, Carolyn MacKenzie, Marsha Schniedwind, Michael Kovens, Arthur Wasserman, and Adam Shapiro
- provide notice that, pursuant to Fed. R. Civ. P. 41(a)(1)(A)(i),
they hereby voluntarily dismiss all of their claims against Defendant JP Morgan Chase Bank,N.A., with prejudice
.
Date:
June 16, 2016
MEYER WILSON CO., LPA
__
/s/ Matthew R. Wilson
______________
David P. Meyer (Ohio Bar #0065205)
Matthew R. Wilson (Ohio Bar #0072925)
Michael J. Boyle, Jr. (Ohio Bar #0091162)
1320 Dublin Road, Suite 100
Columbus, OH 43215
Tel: (614) 224-6000
Fax: (614) 224-6066
Counsel for Plaintiffs
Pacer.gov, go there and register to get an account. Once you have an account number and password, Pacer will allow you to search cases in many courts. Investors interested in distressed securities, will find this to be a valuable tool.
The Ohio action is in the 6th Circuit, under the name Rosenbaum, Stephen. The case number is 2:16-CV-00281
Another JPM filing in Ohio
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
STEPHEN ROSENBAUM, et al.,
Plaintiffs,
v.
JPMORGAN CHASE BANK, N.A.,
Defendant.
Case No. 2:16-cv-281
Judge: George C. Smith
Magistrate Judge: Terence P. Kemp
REPLY MEMORANDUM IN FURTHER
SUPPORT OF DEFENDANT’S
MOTION TO STAY PROCEEDINGS
On May 10, 2016, JPMorgan filed a motion to stay this litigation
pending resolution of JPMorgan’s Motion for Enforcement filed
in the Delaware Bankruptcy Court. See Defendant’s
Motion to Stay Proceedings (Docket No. 8) (the “Motion to Stay”).
1 In their opposition, the
Plaintiffs offered no reason why this Court should not stay these proceedings until the Delaware Bankruptcy Court decides the Motion for Enforcement. See generally Plaintiffs’ Memorandum
in Opposition to Defendants’ Motion to Stay (Docket No. 12).
Instead, Plaintiffs argued the merits of JPMorgan’s Motion for Enforcement and asserted that the Delaware Bankruptcy Court
lacks jurisdiction.
Id.
Since the Plaintiffs filed their opposition, the Delaware Bankruptcy Court granted JPMorgan’s Motion for Enforcement
deciding these issues against Plaintiffs.
See Order attached
to Notice of Delaware Bankruptcy Court Ruling (Docket No. 13). In its order, the Delaware Bankruptcy Court found Plaintiffs to be in
contempt of the Bankruptcy Court’s Confirmation
Order and required the Plaintiffs “to dismiss the Complaint with prejudice within fourteen days,”
or by June 20, 2016.
Id. ¶¶ 4-5. If the Plaintiffs’ do not comply with the Delaware Bankruptcy 1
Capitalized but undefined terms in this Reply have the same meaning ascribed to them in the Motion to Stay.
- 2 -
Court’s Order, this Court should
stay the action until they do so.
See Celotex Corp. v. Edwards,514 U.S. 300, 313 (1995) (holding
challenges to a bankruptcy court’s order should be made in
that court and not collaterally attacked in another district court).
JPMorgan should not be required to defend a lawsuit that
Plaintiffs are under court order to dismiss.
For the foregoing reasons, JPMorgan respectfully requests the Court grant the Motion to Stay.
Respectfully submitted,
/s/ Matthew C. Corcoran
Matthew C. Corcoran (0078236)
(Trial Attorney)
JONES DAY
325 John H. McConnell Boulevard, Suite 600
Columbus, OH 43215
Telephone: (614) 469-3939
Facsimile: (614) 461-4198
Email: mccorcoran@jonesday.com
Oral Arguments before US Court of Appeals Federal Circuit
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2013-5005.mp3
Go to time 21:04 and listen until very end, starting with Mr Fountain