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If no discharge, where does the excess ~40B come from? Shouldn't every penny collected from the liquidation be used to pay the claimants? Also why is there a 65B cap for the distribution?
Exactly. If you read closely, it agrees with what you just said.
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Debt Forgiveness Exceptions
The most common areas that enable you to avoid or at least minimize the forgiveness of indebtedness income is with respect to the following circumstances: 1. A discharge of debt in a Chapter 11 bankruptcy proceeding; 2. ...
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http://www.avvo.com/legal-guides/ugc/cancellation-of-indebtedness-income-forgiveness-of-debt-income
Let's suppose it is liquidation, not reorganization. According to the same article quoted by you, this means that there will be no discharge. Why did you say "I think there will be discharge, but it did[n't] happen yet"?
If there is no discharge in this case, why are the debts considered "satisfied in full" after the 65B distribution? Why not liquidate everything?
No need for hinting. According to the article I linked to, the discharge has already been done.
Let me quote again: "In general, when a reorganization plan is confirmed, all of the debt incurred before the confirmation date is discharged."
www.money-zine.com/Financial-Planning/Debt-Consolidation/Chapter-11-Bankruptcy/
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Discharge of Debt
In general, when a reorganization plan is confirmed, all of the debt incurred before the confirmation date is discharged.
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www.money-zine.com/Financial-Planning/Debt-Consolidation/Chapter-11-Bankruptcy/
>>The confirmation of a plan does not discharge a debtor if—
(B) the debtor does not engage in business after consummation of the plan<<
Therein lies the answer to your question about Lehman as a "going concern".
Buyout means change of ownership. NOL credit would be lost. Reverse merger, i.e. some profitable co merges into the empty shell to take advantage of NOL, is possible.
That makes sense, and another poster may also be right about the assertion that nobody cares about this (information about the next distribution sure would be nice). But being an inquisitive mind, I still would like to do some research to get a definitive answer when I come back (in two weeks).
Are you saying liquidating 11 has a different POR? Or its POR is treated differently? It would be great if you can cite some reference to back up your statement. I am going abroad Wednesday morning, and don't have time to do extensive research.
Wrong: we are no longer under the jurisdiction of the bankruptcy court. I guess you missed my post #14499 this morning.
In PETTIBONE CORPORATION v. EASLEY, judge Easterbrook of the United States Court of Appeals, Seventh Circuit, clearly states (see paragraph 5):
Once the bankruptcy court confirms a plan of reorganization, the debtor may go about its business without further supervision or approval. The firm also is without the protection of the bankruptcy court. It may not come running to the bankruptcy judge every time something unpleasant happens. ... Formerly a ward of the court, the debtor is emancipated by the plan of reorganization. A firm that has emerged from bankruptcy is just like any other defendant in a tort case: it must protect its interests in the way provided by the applicable non-bankruptcy law, here by pleading the statute of limitations in the pending cases.
http://openjurist.org/935/f2d/120/pettibone-corporation-v-easley
It is Circuit Judge Eastbrook speaking. See point 5.
http://openjurist.org/935/f2d/120/pettibone-corporation-v-easley
Why is it so important to you that Leman is still in BK? I can agree with you that if payments are not made according to POR, then the whole process may be revisited. In that sense, yes, this whole thing is not over until POR is implemented.
But saying that is to miss one very important aspect: upon the confirmation of POR, the Debtors and their business operations are no longer under the jurisdiction of the bankruptcy court. Is this concept too difficult for you to understand?
Statements put out by the Debtors are PRs, not necessarily "facts". So yes, I don't have problem disagreeing with some of their statements. You sound desperate. Are you selling something?
I own common, preferred and CTs. My research is just a way to get myself more informed (after all, my money is at stake). My posts quote opinions of law firms about specific topics being discussed--never an encouraging word about buying (or selling). Nobody can accuse me of pumping. I have been reading many informative posts up to now, so sharing my findings is a way to say "thank you" to all the posters who made contributions.
I just gave you opinions of various practicing (bankruptcy) law firms. If you want to believe everything that the Debtors say, be my guest. I came from Yahoo Blockbuster board. All true longs there know that Blockbuster has been doing everything possible to deceive shareholders for more than two years.
'"Emerge" in the Lehman case means the POR is effective and Lehman can now start to payoff the POR. That is all it means.'
Yes, it needs to make the payments as planned. But beyond that, it can do all the things mentioned below that a company cannot do under the protection of the bankruptcy court.
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Limits on out-of-the-ordinary business decisions.
A company in Chapter 11 needs Court approval to engage in activities that may be outside the ordinary course of business. These could include new business ventures, capital spending or the sale of assets. Creditors may require that a committee be appointed by the Court to have a stronger voice in the operations and business decisions of the debtor.
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http://www.mcrazlaw.com/article.php?ArticleID=5
"You do know your scope is limited to executing the POR which is under the direction of the BK court."
Not really. See below:
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However, creditors and stockholders must approve the reorganization plan. The bankruptcy judge has the authority to accept the plan even if the creditors and stockholders reject it.
Once the reorganization is complete, the company can come out from under the protection of the bankruptcy court and resume normal operations.
A Chapter 11 filing assumes there is a possibility the company can emerge from the process as a viable operating company.
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http://stocks.about.com/od/understandingstocks/a/121308bank2.htm
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As Judge Easterbrook astutely observed in Pettibone Corp. v. Easley:(13)
Once the bankruptcy court confirms a plan of reorganization, the debtor may go about its business without further supervision or approval. The firm also is without the protection of the bankruptcy court. It may not come running to the bankruptcy judge every time something unpleasant happens. Formerly a ward of the court, the debtor is emancipated by the plan of reorganization. A firm that has emerged from bankruptcy is just like any other defendant in a tort case: it must protect its interests in the way provided by the applicable non-bankruptcy law....(14)
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http://business.highbeam.com/127/article-1G1-58577004/postconfirmation-jurisdiction-bankruptcy-courts-does
To be fair to LD, there is ongoing debate about bankruptcy court's jurisdiction upon bankruptcy exit.
Is liquidation the end?
"It is commonly considered that the liquidation process signals the end of the company, but for some people, liquidation only begins another business venture. After liquidation, a company can choose to gather the same partners and form a new company bearing another name, but still offer the same type of products and services."
http://www.wisegeek.com/what-happens-during-the-liquidation-process.htm
"The assets of the business are sold and the proceeds distributed among the creditors the business owed. The debts are forgiven, but the business doesn't really have anything left. However, this doesn't necessarily mean that a new business can't be started or that the existing business can't find a new lease on life after a Chapter 7 bankruptcy."
http://bankruptcy-law.freeadvice.com/bankruptcy-law/business_bankruptcy/chapter_liquidation.htm
LD: I can copy-paste too.
"With Judge Frank R Alley presiding, the court approved a reorganization plan with which the Monmouth/Suver based operation that will allow the farm to pay off its creditors over six years. With that approval the farm is officially out of bankruptcy as of Saturday."
"Basically, what Saturday means is the company is no longer in bankruptcy and under the supervision of bankruptcy court….as long as it meets the plan of reorganization,” said Gary Lawrence of Hamstreet & Associates, Olsen Ag’s restructuring advisor."
http://community.statesmanjournal.com/blogs/polk/2012/08/30/olsen-agriculture-to-officially-shed-bankruptcy-saturday/
You've got to be kidding, LD! What do you mean by "dealing with Beck"? As long as the Debtor carries out (and report regularly) the POR as planned, it is out of BK and can do whatever they want to do. F.g., did they have to get the approval for the Archstone IPO from Beck? I don't think so.
What happens in a Chapter 11 bankruptcy after the plan is confirmed?
Confirmation of a plan under Chapter 11 acts as a discharge of all debts, filed or not, excluding those specified as not dischargeable elsewhere in the bankruptcy code. Upon confirmation of a plan, the debtor receives back all his property free and clear of all liens and encumbrances unless such liens are preserved by the plan. Both the debtor and the creditors are bound by the terms of the confirmed plan.
http://www.thevictorialawgroup.com/practice-areas/bankruptcy-faq-2/chapter-11creditors-rights/ (see bottom of page)
Let's be clear about one thing: contribution to any IRA account (traditional or ROTH) must be made in cash. You cannot simply transfer your shares to an IRA account. You need to sell them first.
Daisy, in addition to your new wmih shares, you also own something potentially valuable: part of the liquidation trust. Who knows how much you will be getting eventually? Although I don't believe it, there is debate going on as to whether 20 billions would be distributed to the trust. If true, you are looking at $8-$10 per old wamuq share.
Are you marayantano or his sidekick? If you have a Ph.D., you should know how to cite your sources. How about giving us some links?
I failed to see how the quote you just provided:
If, during the 2-year period immediately following an ownership change to which this paragraph applies, an ownership change of the new loss corporation occurs, this paragraph shall not apply and the section 382 limitation with respect to the 2nd ownership change for any post-change year ending after the change date of the 2nd ownership change shall be zero.
leads to your earlier statement:
"IRS allows 1 change of ownership every 2 years and still preserve tax attributes."
Do you mind connecting the dots?
I may be wrong, but "old and cold" seems to mean at least 18 months, not 5 years.
I found dnoto's old post below. Read section 83.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=69669561
There was a post, quoting one of the court documents, saying that there may also be a possibility of no "effective date."
The guy needs to go back and study hard. I know he is a basher, but even a basher cannot spread misinformation. Of the three points, only point #2 is correct. The other two are completely wrong.
"Equity Interests ... that contributed assets to the entity issuing New Securities"
Looks to me that NOL ("assets") could be in play here.
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In the event that the Plan Administrator issues New Securities, each holder of Allowed Claims or Equity Interests against a Debtor that contributed assets to the entity issuing New Securities shall receive the relevant New Securities as Distributions in accordance with the Plan.
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Good advice! I must admit that not knowing what will happen makes it so much more exciting.
Thanks for the reply! I am holding Ns, Ps and Qs to the end.
And unless they decide to liquidate, everything left belong to shareholders?
I became interested in this stock after reading the dd pieces here. But the trading volume has been 0 for some time. Are shares still available?
But note only $100M is at stake and it's not done yet.
"Deutsche Bank, which said about $100 million is at stake in the classification, can revive the issue later, U.S. Bankruptcy Judge James Peck said today in Manhattan."
Bought 5,000 shares yesterday and today. Put in a limit order @.10XX yesterday, only got 400 (40 dollars worth)! Tried to get the rest at .10xx today. As soon as I submitted the order, the ask was raised to .12 Since I don't trade often, I decided to chase it and changed the bid to .12, and got the shares right away.
The problem is: can you get any though?