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Claw you are wasting your time with your facts plus logic equals thoughtful conclusion approach. For him to understand you need to use the ignore facts if they conflict with any of my Dreams, Hopes, and or my Denial in the face of any facts no matter what approach. You just don't get it, do you. Me either LOL.
Your post is the first sensible one I have seen today. After all the hopes, dreams, non factual, confused beliefs. The rants about the criminals and justice and the rest of the crap, your post is a ray of sunshine. Common sense and practical truth is simple if not satisfying to all those with the Dream.
Large he doesn't need more DD, you do. EOM
Fiction is easy, and easy enough to recognize so why be surprised with Large dreams and the rest of it. More facts are coming and in the meantime, we digress into dreamland as usual.
Catz Great summary of the complexity of this mess. EOM
Catz Many of us are assuming the current settlement negotiations start with the key elements of the last effort as you and others have outlined. That is, Equity getting ownership in Newco. We really dont know what percentage of ownership was to go to commons last time or what it might be this time. Many on this board seem to confuse the word Equity with Common Equity. Any discussion usually leads to the rancorous aguments about the dreaded APR etc. And yet, that for me is the key unknown at this time. With 1.7 billion commons outstanding and Preferreds ahead of commons, it really explains why the PPS is where it is. It will be interesting to see what the exchange rate will be, old commons to Newco.
the Reinsurance was primarily for conforming conventional mortgage loans with LTV ratios above 80%, and or mortgage backed securities. most of the leaders in this business are gone, or no longer elegible for GSA elegible loans because they are in financial trouble. The exisiting business is not active just collecting fees on previously committed insurance business. This was just a sub of WAMU to take advantage of their mortgage origination business. We called it a vertical integration opportunity when I was there. It will become something else or become a part of the consolidation of similar companies if some way is found to do it so the NOLs will not be lost. The thing we have going for us is the NOL potential is so large it should attract some major Wall Street thinking to find some way to optimize them, and get some huge Fees, of course.
Chiron I agree that a settlement announcement should move the PPS and probably up since it is so low. It depends on what Value gets to commons. I don't think there will be any cash for commons and if we get ownership in the NewCo, it will probably be relatively small, and will take time to turn into any meaningful cash, so who knows what the PPS will go to early on. Commons will be fractionally alive but the future will be uncertain in terms of timing and long term value. As the Voo might say, woke up this morning and had myself a beer, the Future is uncertain and the end is always near.
Just wrong. There would be a new POR, a disclosure hearing, another voting process, and another confirmation hearing.
Chiron I think she said "Contested" not contentious.
Catz would say Value potential. It will take a long time a good plan, and some talent and probably some luck to realize the potential value of NewCo.
Most likely to be worse than that. Preferreds and Commons will get some NewCo shares but the exchange rate will favor preferreds to follow the APR. With the 1.7 billion of commons outstanding, there won't be much left on a per share basis in the exchange rate to make commons worth much, if anything at all. Just my opinion, but the market if not the Board seems to agree. As I pre failure holder I am just here because holding makes more sense than selling. The upside potential is there but the probability of seeing anything is extremely low. At current PPS, i would rather hold to see what happens. I could use a long term capital loss to offset gains I can take from selling some stocks i hold in viable companies. I am ready for this to be over one way or the other. I am sick to think of all the pre seizure holders who have lost so much while the attorneys on all sides have milked this beyond belief. I bought a considerable amount of post seizure shares telling myself that I was going to average my original share cost down. That was probably just a BS rationalizing, emotional move on my part and I only blame myself for throwing good money after bad, especially since all my investments in real companies have turned out really well in the past three years. Speculation in BK stocks is risky, and I don't have time or temperament for this three year waste. GLTA.
CWG The NOL's would be wasted with a JPM purchase of NewCo per IRS rules. There is nothing else there that would be of any significant value to JPM. Such a purchase might cause other potential liability issues for JPM. The idea seems ridiculous to me. Just my opinion.
Voo the Court said it did not want another contested POR confirmation hearing until after the mediation was attempted. Nothing was said about the next step if mediation fails. I expect the GSA will still be in effect so the Debtor would likely write another POR based on the GSA along the lines of the one suggested in the last filing. I think the Debtor will seek a ruling on solicitation and some other issues then start the whole process again including a new solicitation of votes if the court orders it. The key issue would be the Courts ruling on separation of the EQ vs SNH issue from the other POR changes called for in the last POR ruling. If separation is allowed, then a simultaneous dual track POR process will start. If separation is disallowed, we are probably a very long time away from a POR resolution. The court did allow a simultaneous process in the case of Dimeq and that also started with a mediation attempt followed by the trial. In that instance, the POR had set aside a Court ordered escrow amount for Dimeq to be paid should the LTW holders win their case. These are just thoughts that come to mind after reading your question. Obviously, the next step could take a number of different directions so I don't have a strong opinion based on what we know at this time. Maybe Catz and or some of the others have some thoughts to share.
This conversation is the voo/catz version of the movie Ground Hog day. Never has third grade math been explained by so many in so many ways. We all wish for some news, any news just to read about something else. LOL
Voo the split does not change your ownership in the company at all. If you own 10% of a company with 100 shares that is 10 shares. If the stock outstanding is reduced by half in a split there would be 50 shares outstanding, you would have 5 shares, still 10% ownership. Nothing changed. What are you talking about?
Strike I wish you were right about the cash but I don't know why you believe there is enough to trickle down to commons, what am I missing? Where is all of this cash? Are you assuming the APR won't be followed or cash from JPM? Why do you "believe"?
Agreed. Most likely to need more time and billing of estate funds by all attorneys. lOL
Chiron. Your right! Even a dime of cash is not going to happen. A dime or much more might be possible in future value of NewCo if a settlement provides some common ownership, but at 1.7 billion shares outstanding, I can't imagine much value left even if commons are included. In any case, it will be years before the potential value of NewCo is realized. Just my opinion.
Catz. Talk about an extended legal morass, if the GSA goes away, JPM and especially the FDIC are capable of litigating this for years, even decades. You have explained the significance of the GSA settlement of the claims against the estate, but I don't think many here understand it yet based on many of the postings. I don't see much hope of the current GSA being significantly revised in mediation.
Catz when you say "us" I presume you mean Equity ie preferred and common and that will bring the APR back in play. If we get a settlement, assuming equity gets the Newco shares, the question is how would they split the presumed value between preferred and common. We never found out how it was proposed to happen in the last settlement attempt.
Catz. Impressive precise answer to his question. EOM
Catz the .25 sounds typical for an extremely short duration investment without any credit or interest rate risk. Question for you. Would the interest earnings be set aside from the ordinary cash on hand accounted for in WMI? If not , these funds are just used in the ordinary business of the estate like paying attorney fees etc. And they would be included in the reported accounting results so what they earned would be a moot point anyway. It is what the estate has that counts.
Claw if you figure the last three years I would think they may have done better than the FJR because the rates in 08, 09 and part of 10 should have been high enough to beat it. However, it really depends on the average duration of their deposits which are probably relatively short because of the uncertainty about when they would need to have the cash available. Of course, the shorter the duration, the lower the rates. Short term treasuries are typically used for this type of purpose to eliminate any credit risk and lower the interest rate risk. Ironically, if they took more interest rate risk with a longer average duration they could have traded out of there treasuries with capital gains as rates tumbled during the last three years. Who knows what they actually did.
Thanks gyspsy but you are wrong about most people as credit unions share of the deposit market is very small relative to Banks. Anyway, what most people do is not relevant to the original question concerning the short term investment of Estate funds held for disbursement to claims against the estate.
Claw. rates on deposits of any amount are historically low. Banks are flooded with deposits with no way to effectively use them. Money market accounts of any size yield only a few basis points of interest. Three and six month treasuries yield .010 and .045 respectively. The artificial FJR is much better than actual rates available.
Garath the motion is about the debtors plan for a fourth mod to the existing POR which would be expedited to a quick approval hearing because the debtor says it would not require another solicitation process. The suggested process, separation of the stay opinion from the other POR issues in mediation, while the new mod 4 POR is filed without another solicitation is all subject to a court ruling.
Catz Correct. You make my point. The press release you refer to was pretty much dismissed and was hardly mentioned in posted discussions except to say it was ridiculous spin.
The Court Opinion reaffirmed the GSA and emphasized it is needed to stay out of an extended legal morass. She ordered the mediation to help negate the extended legal fight. Now, the Debtor has offered up a process to very quickly resolve most of this BK using the approved GSA and save the estate significant time and millions. If the court is really interested in moving on quickly and maximizing the value of the estate, I think she must give this approach serious consideration. As usual, in all of the discussions on this board, we did not see this coming, so I doubt if anyone here can be confident in reading all the postings that will summarily dismiss any possibility that this motion will prevail. The collective market opinion reflected in the PPS since the Opinion seems to accurately reflect the risk/reward of holding commons, as opposed to most of the posting predictions from some of the fact denying few here. I don't know what will happen here, but I admit it.
REALITY: POR denied, Court Opinion analyzed by experts and amateurs as well. More media coverage than usual, and the PPS has not changed. Excuses for this are just a denial of the fact that there is obviously very limited demand for WAMUQ or the PPS would go up no matter what the MM tried to do. So, I can only conclude that the Market consensus is telling me the perceived risk/reward of commons getting paid still has not changed. If you feel different, buy more, if not sell or just hold and wait. Only my opinion.
The Mayan calendar problem could make this thing moot even if we dodge the asteroid.LOL
The omission of FAIR in the Court opinion is not significant. Although it is written about in many of these posts to support the hopes and opinions of the writers, you should read Catz recent post for a more thoughtful analysis of the missing fair word in her opinion. Some of the posts are eloquent, hopeful etc. , but just based on feelings , and faulty logic without relevant factual support. Sounds good to many on the Board, but the market has not changed, has it.
Voo what is it about ABSOLUTE Priority that you can't understand? Your wish, hope, dream just seems trivial compared to the Rule.
The Court ruled. The opinion has been read by many, news articles have been written with various slants on the key points, we have heard an expert analysis by a BK law expert, and myriad posts here with key questions, and observations about the opinion and what it means. We also have a reaction to the news by the market which many here rationalize as meaningless, as others think the PPS accurately reflects the overall assessment of the risk/reward of commons getting some value from the waterfall some day. I think we all agree there is a new reality, but predictably, the Board population probably won't agree on what IT is and or what will likely happen in the future. So, we can now look forward to months of rancorous debate about known unknowns, unknown unknowns, criminals, justice, MM price controls, ad infinitum. Many will add real value to the discussion and discovery and unfortunately, some will waste your time reading the SOS. After being here a while, I think I can predict and rely on the same posters to do what they seem to do best. For me, more emphasis on facts, and logic and less on emotion, justice, punishment of criminals etc is the best route to understanding and predicting the value potential and probability here. I know, it is not as colorful as all the passionate ranting, but just more effective in my opinion. My thanks to all who participate in the discussions here. I realize my opinion is just that, and this post might be classified as a rant as well. Back to lurking.
Catz I believe you are justified to be pessimistic about the timing. I think the Court ordered the DIMEQ mediation on March 21 which did not result in a settlement, and the resulting trial is still ongoing. That mediation only involved two primary parties, and it has been about six months since the mediation order. With all the parties involved in this mediation, i can't imagine it will be any faster. Possible, not probable in my opinion.
Most likely it will. Jmo. EOM
Agreed, but what would the split of Newco stock be between the two, and what would common holders get?
BigB they were just declared defective in the Opinion. They will be changed in the next POR, as part of the whole miserable process of disclosure, voting, confirmation etc. Oh, and this time, Mediation first.
This excitement will pass as usual. The Court denied the POR again, but, most of the objections to the plan were over turned, and the GSA was confirmed Again. The denial seems to be based on three defects, two are technical and should be easily resolved. The remaining issue is the dispute with two of the SNH's and that could take a long time to resolve. These parties will be very motivated to fight this because of the serious nature of the allegations. If they want to fight, they are well funded to drag this out with a long legal process. So the Court has ordered a mediation process. She did the same for the parties in interest in the LTW dispute. It just took up a lot of time without any settlement agreement. Who knows, maybe this will lead to a reconsideration of the old settlement proposal. Maybe the SNH's will sweeten the offer, to provide some certainty to the result, and get their payout sooner? Maybe, that will take some form of ownership in the Newco, maybe some future value will make it's way all the way down to commons. Maybe not. Whatever, happens, it will take at least several months, probably more just for the approval of the final POR. This is all my opinion, and I am known to be a pessimist, at least by my wife. The Market seems to be in tune with all these Maybe questions, and the fundamental fact that we are still at the bottom of the waterfall and a long way away from any significant cash value.
Great News for the Lawyers. Most issues are ruled on, but they still get to Bill the estate for more settlement negotiations, disclosure and POR confirmation hearings etc. They must be grinning as they read the new opinion, and realize all the new billing opportunities and time left in this BK case.The good news is Commons are still alive, but still at the bottom of adjusted waterfall. The Bad news is the GSA is now more fair and reasonable than ever.