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The $1.9 Billion was an initial payment for WMB. The Purchase and Assumption Agreement states the JPMC must pay "book value for all assets of WMB. Assets of WMI, if any, must be returned.
Tepper is now the proud owner of the Carolina Panthers. He liquidated his hedge fund years ago.
Gary- In answer to your question; Why did the FDIC shut down WAMU at close of business on Thursday instead of Friday? I believe that the FDIC somehow found out that WMI was going to file for Bankruptcy on Friday morning.
Lodas- You are still talking apples and oranges. WMI is the debtor and WMIH is the reorganized debtor. They are two separate entities. What pertains to one doesn't pertain to the other. Also, the 7 trusts
held by WMRRC are immaterial to the possibility of any further distribution.
Lodas- Most of the people expecting a distribution are not talking about assets affected by the Chapter 11 Bankruptcy. The assets in question are held in Trusts. When assets are placed in a Trust, the Trustee becomes the owner of said assets and the former owner becomes a beneficiary of the Trust. Therefore, the assets are bankruptcy remote and the closing documents has nothing to do with them.
If equity no longer exist, how can class 19 & 22 be impaired?
I can't answer your questin concerning the location of al of the Trusts. However, I do know that Deutsche Bank and Bank of New York Mellon are two of the Trustees. I am also unable to quote the value. I do know they exist. I understand your skepticism. The documents appear to say there isn't going to be a recovery. I believe a recovery is a possibility. In fact, in Rosen's rebuttal to Alice's claim, he said placing the Underwriters back into Class 18 can possibly prevent Classes 19 & 22 from receiving a distribution. The Third Circuit repeated the same. If they think a distribution is possible, who am I to say it is not?
There is a reason why no one challenged Rosen when he made the statement " WMI held no safe harbor assets." It's the truth. It might be a little misleading, but, it is true. "Safe Harbor Assets" are assets held in a Trust. When placed into a Trust, ownership is turned over to the Trustee and the former owner becomes a beneficary of the Trust. Only assets "owned" by the corproration is subject to bankruptcy law.
That's why they are referred to as Safe Harbor Assets. I am sure that you are already aware of this fact.
I meant to say the UWs had a Class 18 claim not a Class 19 Claim. Therefore the question is, Why did they move from Class 18 to Class 19. They had a better chance of being paid in Class 18. Excuse my first mistake. I am getiting old.
Goodie- The UWs had a Class 19 claim not a Class 18 claim. So, the question is, why did they move from Class 18 to Class 19?
Goodie- The UWs had a Class 18 claim not a Class 18 claim. So, the question is, why did they move from Class 18 to Class 19?
It is a bit more complicated than one would think. The statement is true as written. However, it is misleading. In the case of MBS assets, WMI is the benefinciary of said assets. Not the owner. When assets are placed in a Trust, the trustee becomes the owner.
That may be true as it pertains to a balance sheet. However, it was Jaimie Diamon who said he found $30 billion in the rubble of WMB. It isn't hard for me to believe there is 10 times that amount in the same rubble.
Biz.....It isn't the last paragraph one must pay attention to, it is the first paragraph. Ask yourself, if WAMU had $307B in assets, why can"t the FDIC pay all the creditors? The answer has to be that most, if not all, of that money must be in trusts. Therefore, the FDIC can't touch it. It's just a guess on my part. However, the $307B is the relevent issue.
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I encourage all who are interested in the truth concerning DSTs and 1031 exchanges to GOOGLE DST/1031 exchange. This should give you a better understanding of what is going on.
Lodas...We agree more than we disagree. In this case it involves one word "title." I believe that word excludes the mortgages and you it includes them. I hope I am right. I was once told that the law is interpretation and argument.
Lodas....This banhruptcy is very tricky and one must follow the bouncng ball. As I have said before, you are absolutely correct. The document does say what you profess. However, my interpretatin of the facts are slightly different from yours.
The same document you cite also says the Litigation Proceeds are the property of WMI and not WMIH. This is important because, as you know, the Underwriters had a Class 18 claim. This is where you have to follow the bouncing ball. In a settlement agreement between the underwriters and equity, the underwritters agreed to move from Class 18 to Class 19. That settlement enabled Class 18 to be satisfied. The 75/25 settlement, between Class 19 and Class 22, kept Class 22 aiive. The results of these settlements are the "Litigation Proceeds."
BBANBOB.....Sad but true!
Lodas...You are 100% correct. The documents does say that. But here's the kicker. Neither WMI or WMIH own the "title" to the Remote BK Assets. At the time those assets were placed into a Trust, ownership was turned over to the Trustee.
Good Job Civil War General!
I don;t believe you can sue if you signed the release.
Class 22 only owns 25% of the estate. The other 75% is owned by Class 19. That is what, those who gave releases, agreed to. Of the two Plans, POR 6 and POR7, POR7 is the only Plan ratified. Therefore, it doesn't matter what POR6 says. POR6 is essentially useless.
Ron- I am not disputing what POR6 says. In fact, since it was never approved, no one has to do whatever is in there. POR7 is the only plan which must be followed.
Ron...Plan 6 was never adopted. It was during the confirmation hearng that Nate Thoma revealed that the SNHs were involved in insider trading. The Judge ditched Plan 6.
Lodas...I don't believe WMIIC has anything to do with any potential payout. As you said, it was dissolved of its assets.
Lodas...WMIIC either filed at the same time as WMI or shortly thereafter. I don't recall which. However, I do recall that they filed as "debtor in possession." I also believe that WMIIC was dissolved of their assets as you have stated.
Lodas...The other bankruptcy was WMIIC who filed as a debtor in possession.
I agree with the scenario you have described. However, it doesn't speak to Chapter 11 bankruptcy law and procedure. I do see the relationship to the MBS process in that it speaks to ownership of property. If you are saying that WMI doesn't own the MBS, I agree. What they do own is a beneficial interest in the MBS. Being that Class 19 and 22 are impaied, that interest is now owned by them 75/25.
Lodas...First, I want to thank you for your reply. I agree with most of what you said. WMI did abandon yhe stock in WAMU/WMB. That is where the NOLs came from. It is also true that most of the MBS were sold to investors. So, I agree that WMI only purchased a small percentage. However, small percentage has grown into Billions over the years. I believe that WMI has been reinvesting their portion of the returns on a quarterly basis for at least 20 years or more. I figure there is a pretty hefty sum of cash stacking up somewhere. Class 19 & 22, as the impaired class, now own that cash 75/25.
I would also like to add that I have no problem with your knowledge of the facts, I find you to be very knowledgeable. I just have a different interpretation of those facts. I was taught , by some pretty good attorneys, that the law is interpretation and argument. No, I am not an attorney.
Lodas- In the world of finance I accept your definition of impaired. However, in the realm of Bankruptcy, I disagree with that interpretation. In a bankruptcy, it is the responsibility of equity, as owners of the company, to pay all of the creditors. In the event one of the classes of creditors aren't paid all of their claim, that class inherits the company.
In WAMU's case all classes ahead of Class 19 & 22 were considered paid. This left Classes 19 & 22 as the impaired Class. In other words, class 19 & 22 shares ownership of the estate 75%/25% respectively. This includes any BK Remote assets. I know you don't believe that these assets exist and that's OK. In fact, you may be right. But, I don't think so.
Lodas- What does the phrase " classes 19 and 22 are impaired, with no further distribution, " mean to you? I ask this because I believe you and I interpret legal matters slightly different.
Lodas- What does the phrase " classes 19 and 22 are impaired, with no further distribution, " mean to you? I ask this because I believe you and I interpret legal matters s;ightly different.
Lodas-That's a damn good explanation of what is going on.
Lodas- I agree with you 99.9%. The only part I disagree with is your interpretation of what Rosen said. Rosen is speaking in "legalese" when he says WMI has no safe harbor assets. Which is true from a legal standpoint. The safe harbor assets are in a trust. When WMI placed these assets in the Trust, they turned over ownership to the Trustee and WMI became a benefciary of the trust. Since WMI no loger "owns" the assets, it can be legally said that WMI doesn't have any safe harbor assets. The safe harbor portion of said assets are the "beneficiary interests" which WMI does have.
I believe JPM made a downpayment of $1.88B and signed a Purchase and Asumption Agreement, which is basically a promisory note, to pay book value for the assets. To date, they haven't paid the book value for the assets. Personally, I don't believe JPMC will pay for the assets until the FDIC is prepared to close the WMB Receivership. In the meantime, JPMC is utilizing these assets to make money. It is possible that, by the time JPMC actually pays for the assets, they would've made the eventual cost of the assets.
Lodas- I am an optimist. I see the upside to everything. Sometimes that is a good thing and sometimes it isn't so good. I have learned that you must look at things from both sides of the issue. That's why I always read your comments. You are knowledgeable of the facts and present them from the opposite perspective. I, for one, appreciate that. Keep sharing your views.
Lodas- You are correct. Classes 19 & 22 are impaired. However, that's not always a bad thing. There is a possibility that these classes will receive a distribution. I say this because in Rosen"s rebuttal to Alice"s claim against the underwriters, he said, "placing the underwriters back into Class 18 could prevent equity from receiving an additional distribution." I've read a lot of Rosen's correspondence. He may make misleading statements. But, I haven't seen where he lied. I don't know when or how much, but, I do believe there will be a distribution.
That depends on which equity interest they are talking about. If you are talking about the equity interest in WMB, which I believe they are. Then, what it means is, WMI cancelled its equity interest in WMB and took a $20.7 B write off. That's where the NOLs came from. Remember, WMI owned 100% of the equity interest in WMB at time of seizure.
Lodas- It is true that the escrows were removed from our trading accounts because they were deemed worthless. Being that they were in our accounts for approximately 10 years, does this mean they had value prior to this event? Why did it take 10 years to remove them? Or, why create them in the first place? I am serious. I can't figure this out.
Lodas- I believe the 20.7B loss is for the abandonment of WMB stock which WMI owned 100% of.