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US Trustee Objection to LTW Equity Committee
http://www.kccllc.net/documents/0812229/0812229110728000000000008.pdf
Thank you for the clarification.
The Aurelius Objection
http://www.kccllc.net/documents/0812229/0812229110622000000000003.pdf
Aurelius Capital, in their objection to the Modified Sixth Plan, objects to the status of "late filed claims". In paragraph 16 and Footnote 7 (an important footnote) they talk about the LTW's and how THMJW used section 726 to justify the LTW's claim.
In paragraphs 43-51 Aurelius sites cases showing that section 726 cannot be used to justify late filed claims, ie Section 12-A claims, and therefore those claims should be excluded from the plan.
Paragraphs 53 and 54 summarize previous courts positions on late filed claims. The objection that Aurelius raises is rather strong based on the court cases they site.
Questions:
It is my understanding that our claim was filed late, is this correct?
Was it the responsibility of the WAMU Board of Directors to file a claim on behalf of the DIMEQ holders, under the LTW agreement, as a class because DIMEQ did not have a trustee?
There is a neglect exception to 726. Did the BOD "neglect" to follow their duties under the LTW agreement, by not filing a claim on behalf of DIMEQ?
When this comes to trial, it is going to be an important factor if not resolved prior to that trial.
A lot of discussion about DIMEQ suing directors
Best way to follow:
http://twitter.com/#!/DelShareholder
WAMPQ US: No longer on the REG SHO Threshold Security List
2011-06-04 14:01:31.380 GMT
WASHINGTON MUTUAL INC NON CU ("WAMPQ-0")
- No longer on the REG SHO Threshold Security List
This issuer is no longer subject to mandatory close-out requirements
outlined in the SEC's Regulation SHO.
More info at http://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm
This list can be found at
ftp://ftp.nasdaqtrader.com/SymbolDirectory/regsho/nasdaqth20110603.txt
No announcement of a GSA extension......Good!
The longer this drags out, the more likely the GSA is in play. What are they negotiating? Take a look at pages 19 and 20.
File complements of Sidedraft.
http://www.sidedraught.com/stocks/WashingtonMutual/Equity%20Committee/POR/WaMu_Closing_Equity_Committe.pdf
Just as with the depositions, there was no news and delays while SG negotiated a rather complicated agreement with the SNHs. Now I believe,they are using that leverage against JPM and the FDIC behind the scenes to amend the GSA. JPM retains $12.36 billion in disputed assets. The FDIC has said it is not about the money. We shall see.
The value of the "EC Releases" remain very high at this point. One only has to look at the Goldman Sachs subpoenas this morning to see what could happen here.
Yes, the Fremont alumni reunion.
When Broadbill stepped down these four private equity funds officially stepped in to take Broadbill's place. I feel comfortable with our representation.
It is my conjecture that Broadbill has sold it's position.
WAMPQ US: Now on the REG SHO Threshold Security List
2011-05-27 14:03:34.892 GMT
WASHINGTON MUTUAL INC NON CU ("WAMPQ-0")
- Now on the REG SHO Threshold Security List
This issuer is subject to mandatory close-out requirements outlined in the
SEC's Regulation SHO. There was an aggregate fail to deliver position for five
consecutive settlement days at a registered clearing agency totaling 10,000
shares or more and equal to at least 0.5% of the issuer's total shares
outstanding.
More info at http://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm
This list can be found at
ftp://ftp.nasdaqtrader.com/SymbolDirectory/regsho/nasdaqth20110526.txt
NOL's and IRS Section 382
Background: Congress enacted IRC §382 to prevent taxpayers from "trafficking"
NOLs, i.e., acquiring or selling corporations primarily for their NOLs. IRC §382 limits
the ability of corporations to utilize "pre-change" NOLs (and certain built-in losses) after
an "ownership change." An ownership change generally occurs if one or more of the
corporation's 5% shareholders increase their ownership, in the aggregate, by more than
50 percentage points over a rolling three year period.
If an ownership change occurs, the utilization and/or timing of the utilization of net
operating losses (NOLs) can be significantly limited. The annual limitation is an amount
equal to the IRS’ long-term tax-exempt rate multiplied by the "market capitalization”
(subject to certain adjustments) of the loss corporation. Market capitalization is
determined by the stock price at the time of the ownership change multiplied by the
number of shares outstanding. This “§382 Limit” can cause a company with NOLs to pay significant cash taxes immediately after the ownership change and may even result in
the permanent loss of NOLs.
Reorganized WMMRRC
With the events of the last couple of days, investors are making the assumption that WAMUQ will live on under the reorganized WMMRRC.
Assuming this happens, then it could very well follow that the DIMEQ LTW's agreement may remain in effect, and thus the LTW's could be converted into WMMRRC stock. This may not be all that bad for LTW holders. We have $356 million($382 million - $26 million expenses)coming from the government that has a 46% tax factor attached as of 2003. Under the WMMRRC umbrella that 46% goes away because of the $17 billion NOL's that WMMRRC has. The LTW's thus could get more shares of WMMRRC because of the tax savings. In addition WMMRRC would get the full $356 million cash. Cash is the one thing WMMRRC will badly need for investments, if it is to realize the benefits of the $17 billion NOL's.
Up until now, we have been looking at this as if LTW's would get the cash distribution directly, about $250 million net. What would an LTW investor rather have, $356 million in WMMRRC stock or $250 million in cash. That $250 million cash distribution would also be subject to capital gains tax above the share purchase cost for most LTW investors. The WMMRRC stock would be a tax free exchange just like any other warrant exchange. LTW holders could then sell their WMMRRC stock, if they wanted to, on the open market.
The one thing the LTW's have to do however, is get back the LTW rights from JPM. The GSA should be expiring at the end of May and with that expiration, everything is back on the table.
Maxwin6ft
Your investment analysis is very interesting (see post #3661).
There is an inverse relationship to the price of WAMUQ and what DIMEQ would get. The higher the price of WAMUQ, the worse off DIMEQ is. For example, lets say that WAMUQ stock runs to $.8903.
Using the $.8903 figure in your formula will generate a conversion factor of 1 LTW = 1.726 shares of WAMUQ instead of 30.7342 shares of WAMUQ when the price was at $.05.
Also, the court may add $63 million to the award for DIMEQ.
Your analysis did bring up some else of interest. See the next post.
Liquidation Analysis Update
The Liquidation Analysis in the current Disclosure statement does not reflect any set aside for DIMEQ as THJMW has instructed in her nonconfirmation of the previous POR. Docket #6711, page 934, from 2/9/2011 shows General Unsecured Claims of $375 million, the same as the current Disclosure. Thus the current Disclosure does not meet one of the requirements THJMW set down in her written response to nonconfirmation. This will have a direct affect on those classifications directly below Category 12, should DIMEQ prevail.
The final liquidation analysis will look very different.
Two other comments:
StinkyJunk - I was in Fremont
Dumerthanmost - Your post and comments were very sound advice.
Liquidation Analysis
The recent Dislosure Statement shows a figure of $375 million in the General Unsecured Claims section (Category 12) where DIMEQ is supposed to be positioned upon winning the litigation. Is this $375 million the set aside for DIMEQ or is it other claims.
The reason I ask is THJMW indicated their should be a set aside when she denied confirmation of the plan in February, yet I am uncertain whether that has actually occurred.
Information available for DIMEQ
1) Voting and Election Deadline: 5:00PM (Pacific Time) on May 13, 2011
2) DIMEQ is being asked to vote as Class 21
3) The confirmation hearing commences on June 6, 2011, (after the voting deadline.)
Voting - What to do?
The following is from Bophan on Y, and reprinted by William48 on the WAMPQ board. This is also the same strategy I plan to follow with DIMEQ.
It's very good. She's to be applauded ... for doing the job that SG suddenly seems unwilling to do:
Re: DS Voting Procedures 14 second(s) ago
"A no vote may preclude you from sharing in any settlement."
That is not exactly correct. For preferred shares, a returned ballot that has the "opt out of granting releases" box checked will result in no distribution.
If a ballot is returned with that box left unchecked (ie not option out of granting releases), the voter will be "deemed" to have granted the releases and thus will be eligible for a distribution. In this case, ANY distribution, even one penny per share, will finalize the releases having been granted. Only if there is no distribution at all will the releases have not been granted (even though "deemed" on the ballot). No distribution = no release.
There is no way on preferreds ballot to vote on the Plan (yes/no) while abstaining on making a decision on the releases.
The preferreds conundrum: grant or not grant releases when you don't know the level of the distribution?
One way to go: don't vote, thus making no choice regarding releases. Wait to see how much the distribution will be, then decide. You have one year from the effective date to grant the releases and receive your distribution. The trustee must contact you every three months reminding you that you haven't yet granted releases.
Another benefit of this approach: your shares don't get locked up (if you return a ballot, regardless of how you cast your votes, your shares will be locked).
This company is focused on one project, Brightwater. I just do not see any long term vision of where the company is going beyond this project.
http://www.sellinghuntingtonbeach.com/ocean-view-home/
Chapter 22
For anyone interested, this is the second trip through bankruptcy for Bolsa Chica. The LA Times has a fairly good series on the sequence of events that have occurred over time.
http://articles.latimes.com/keyword/signal-bolsa-corp
Originally, Signal Cos(Signal Oil) spun off its real estate holdings to form Bolsa Chica. It included real estate in New England, timberland in Wisconsin and Michigan, and Bolsa Chica in California. The LA Times articles depicts the strong opposition from everyone that did not own the property, and ultimately led to the first bankruptcy of Bolsa Chica. CALCQ was formed out of those ruins from the first bankruptcy. It did OK for a for a few years but their cash flow never impressed. The housing crash and tight credit markets brought CALCQ down.
I am a veteran of the first Bolsa Chica bankruptcy and paid my tuition back then. I know how you guys feel.
Goldcanyon341
DIMEQ from the 2/8 Court Transcripts
The Broadbill case for $337 million in claims has set the following schedule:
1) March 1, 2011 - deadline for amending pleadings
2) March 18, 2011 - deadline for discovery requests and request
for production of documents
3) February 25, 2011 hearing - will set further scheduling including
a) Discovery Cutoff Date
b) Firm Trial Date
I agree, the Broadbill case should be decided prior to the effective date, because it effects distributions to classes below the Class 12 "General Unsecured Creditors". Even if Broadbill were to loose, it would go to appeal immediately.
The case is pretty strong for Broadbill. The LTW's should have followed along to JP Morgan with the cash benefit. The fact that the debtor separated the cash from the LTW's, broke the bond between them and the debtor has to accept responsibility for that. The debtor is fighting this so hard because they screwed up in their analysis of the LTW's and our counsel has agressively pointed out the their error.
My primary question, Is the $337 LTW reserve set aside in the current Class 12 "General Unsecured Claims" which has a current reserve of $375 million? If another $337 million would have to be added to the existing $375 million, that would have a negative effect on all the classes below class 12.
Liquidation Analysis:
In the original 6th Plan dated 10/06/2010 the "General Unsecured Claims" provision of the Liquidation Analysis shows $375 million set aside. The modified 6th plan dated 2/08/2011 shows the same amount of $375 million. Between those two dates, the court ruled to set aside $337 million for the DIMEQ claim. Is it correct to assume the debtor continues to disregard the DIMEQ claim even though the court has ruled to reserve the $337 million?
The $2 million is TOPRS money being withheld by Wells Fargo until payment from SGGH for its Trustee Fees and attorneys fees. In the October 7 court hearing, Wells Fargo agreed to release $1.6 million to TOPRS. That will flow now. The remaining $.4 million will come when the dispute with SGGH is concluded. They will be back in court January 6, 2011.
With the Holidays rapidly approaching, do you think a decision on the POR would be made prior to 01/06/2011? From what I have seen in other cases, seldom is anything accomplished between Christmas and New Years. Many judicial employees take off for vacation.
Philipmax,
You have an excellent flare for writing with emotion, a good quality. May I make one suggestion regarding the substance of your letter, to guide the Court on how to rule in this matter.
Historically the LTW's have always moved with the institution that controlled the ownership. Anchor went to Dime and Dime went to Wamu. Each time the LTW's followed, with the new owner entitled to 15% and the LTW's entitled to 85%. The WAMU plan proposes to move the assets to JPM, the LTW's must also move with them. The error in negotiations of a settlement with JPM was made on behalf of Wamu's management. It is clear from their testimony when questioned by Mr. Steinberg, that they lacked knowledge of the matter. To correct Wamu management's error, the Court should send the LTW's to JPM.