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Correction: should read Delaware Uniform Principal and Income Act
Large, the Delaware Uniform Principal and Investment Act at Section 61-102(2) states:
(2) “Beneficiary” includes, in the case of a decedent’s estate, an heir, a next of kin, a legatee and devisee and, in the case of a trust, an income beneficiary and a remainder beneficiary.
The terms of the POR left the remainder of the trust to legacy shareholders.
That perhaps gives anyone of us standing to demand the LT to turn over documents for inspection under Delaware Law.
FWIW the liquidating trust document requires all trust records to be preserved for six years after the trust's dissolution.
Large Green , you stated: We have ALL used the term "Escrow ShareMarkers" but we're actually Liquidating Trust Beneficiaries.
The reorganized shares that were issued to us and placed into the disputed equity accounts were never part of the bankruptcy estate. That is why an escrow account was set up over the disputed shares...to keep it separate from the trust assets. The LT was merely the escrow agent acting on behalf of the reorganized debtor. The LT even issued a press release indicating that those disputed shares were not part of the trust assets. So it was indeed a misnomer to use the term "escrows" when one was referring to any residual assets that equity might get.
However, I do not think you can jump to the conclusion that legacy shareholders are Liquidating Trust Beneficiaries because we received shares in the reorganized debtor from the escrow markers. The terms of the liquidating trust seem to require that a liquidating trust interest be first issued before one rises to the level of a beneficiary of the trust. This prerequisite has been noted during message board discussions whether legacy shareholders constitute beneficiaries under the delaware statute giving beneficiaries the right to examine trust records. It should be pointed out though that the chart attached to your Liquidation Trust document link, does show the notation next to preferred stock "no LTI". Whether this dispenses with the requirement for LTI's for legacy shareholders is beyond my knowledge. But the same notation was next to Piers , and I did receive LTI's for my Piers.
I do find it strange for the LT to switch the wording to "relevant beneficiaries." The LT could have easily stated "there will be no cash distributions to Class 19, 21 and 22 holders," and remove all doubt. But once again, the LT does not provide clarity. Why?
Also, could Coop be a relevant beneficiary given that the por did provide a 20 per cent cut to the reorgnized debtor for certain business interests/litigation.
Shareholders own the company...the company owns the assets.
If the residual left after all claims were paid is less than the cost to make the distribution, the POR provided the balance would go to charity.
So do the Libor claims belong to Coop?
Anyone interested in knowing how many Commons underwriters get if put in Class 22 should pay particular attention to footnote 6 in Alice's Withdrawal motion filed today.
It is the LT that attempted to change the law. Delaware requires the trustee to follow the terms of the governing instrument i.e. the POR. The LT admitted in their response that they had to "add to the definition of preferred equity interest " in order to do what they did.
Ali Meshkati tweet:
"Lenders extended $700 billion of home loans in the July-Sept quarter, the most in 14 years, according to industry research group Inside Mortgage Finance. Mortgage originations for the full year are on pace to hit their highest level since 2006, the peak of the last housing boom"
The articles of incorporation of wmi were amended to reflect new common and preferred for the reorganized entity which eliminated/cancelled the old common and preferred. The amended articles are filed in Delaware and filed with the S.E.C.
Nonsense. Liquidation amounts to paying off creditors with your assets. This is precisely what WMI did by the terms of the POR and the Liquidating Trust.
Really? If you read the documents you would see that Hotmeat is correct.
Hopefully, the Motion For Final Decree will provide answers as to any recovery for equity. Since Class 18 is resolved per Rozen, there really is no reason to withhold this information anymore. Imo the underwriters already know what is or is not forthcoming. Alice believes something is forthcoming and the LT is not going to convince her otherwise short of clear , unequivocal, and convincing statements in the Motion. I believe this Motion could aver that distributions,if any, to equity will be made in accordance with the final appellate ruling of Alice's objection. I do not think her appeal will hold up the bankruptcy closing.
So how does anyone expect payment from a trust which was collateralized with only the unsecured promissory notes of a bankrupt WMI? One only needs to go to the actual claim filed in bankruptcy by Wells Fargo for this trust and see that the claim clearly states it is an "unsecured claim". SMH
The money Coop makes off of originations in the 3rd and 4th quarters is going to be remarkable and extraordinary. Moreover, the ten year is at 1.756 as I write, and I expect Coop will state at the earnings call that any MTM for the 3rd Qtr will have already been recovered.
Well who is going to go after these defective title mortgages/notes? The feckless LT?
The fact that the LT may have bare legal title because of the defects does not guarantee anything of value therefrom comes back to legacy shareholders.
The cases that have nullified/barred the foreclosures are but really a small sample. A lot of the mortgagees simply walked away from their "under water" homes and defaulted in the foreclosure actions. Those properties were then sold off and the proceeds went to the purported owner of the note. Many of the original defective loans and mortgages were replaced with new notes and mortgages which the homeowners were eager to jump at by forgiveness of some principal and lower interest rate. Many of the original defective loans are probably still being fully paid off by the homeowners who do not have a clue as to the defenses available to them.
Moreover, some entity purchased and paid wmi/wmb etal value for those notes. Any claim of ownership by the LT would be met with an unjust enrichment defense. The LT could be simply ordered to assign its bare legal title to the parties that they sold the notes to. Then you have the biggest problem. How does the LT know which notes (or the proceeds therefrom) to claim ownership of and determine who the current owner is of those notes. And then there is the problem that the current purported owner could be held to be an innocent third party purchaser for value without notice. Then consider the legal costs to even pursue collection.
Imo one has a better chance of winning the lottery.
In addition to what Hotmeat just posted which is correct, you have to realize that the only asset that is mentioned in the escrow agreement are the wmih shares. The wmi shares and the reorganized shares do not and never did constitute assets of the bankruptcy estate. An escrow agent never has control of anything but the property which was explicitly mentioned in the agreement. If you sell your house, the house goes into escrow, but your securities do not. So unless there is a completely separate escrow agreement, which will utilize the same markers, any assets have to be distributed via the Liquidation Trust. That is done by the issuance of Litigation Trust Interests. And if the LT has no control over the markers, then why can't we transfer them. The trust document only states Litigation Trust Interests are not transferable. My guess is that the remaining shares have not been distributed because of Alice's pending appeal. If the Underwriters go to the Common Class, then the remaining shares can be used to pay the underwriters. The underwriters then have to return 1.4 million pre split wmih coop shares to the LT which will then be distributed to Class 19. Legacy common escrow marker holders get to pay the underwriters claim out of their share instead of Class 19.
If the chart was an exhibit or contained in POR 7 it would be "inside the 4 corners of the document" and relevant for the court to interpret the Preferred Equity Interest definition. But even if the chart exists within POR 7, that argument cannot be brought up now since it wasn't brought up in the bankruptcy court. In my Will I can set up a testamentary trust for the residual interest in my estate and state that only my children P, K, and Reits will be the beneficiaries thereof. Once I pass (POR 7 passed), my other son Underwriter cannot be included as a beneficiary of the residue. The trustee cannot amend the terms I set forth.
Rozen already said he expects objections to be filed by "crazies".
Rule 3022. Final Decree in Chapter 11 Reorganization Case
After an estate is fully administered in a chapter 11 reorganization case, the court, on its own motion or on motion of a party in interest, shall enter a final decree closing the case.
Notes
(As amended Mar. 30, 1987, eff. Aug. 1, 1987; Apr. 30, 1991, eff. Aug. 1, 1991.)
Notes of Advisory Committee on Rules—1983
Section 350 of the Code requires the court to close the case after the estate is fully administered and the trustee has been discharged. Section 1143 places a five year limitation on the surrender of securities when required for participation under a plan but this provision should not delay entry of the final decree.
Notes of Advisory Committee on Rules—1991 Amendment
Entry of a final decree closing a chapter 11 case should not be delayed solely because the payments required by the plan have not been completed. Factors that the court should consider in determining whether the estate has been fully administered include (1) whether the order confirming the plan has become final, (2) whether deposits required by the plan have been distributed, (3) whether the property proposed by the plan to be transferred has been transferred, (4) whether the debtor or the successor of the debtor under the plan has assumed the business or the management of the property dealt with by the plan, (5) whether payments under the plan have commenced, and (6) whether all motions, contested matters, and adversary proceedings have been finally resolved.
The court should not keep the case open only because of the possibility that the court's jurisdiction may be invoked in the future. A final decree closing the case after the estate is fully administered does not deprive the court of jurisdiction to enforce or interpret its own orders and does not prevent the court from reopening the case for cause pursuant to §350(b) of the Code. For example, on motion of a party in interest, the court may reopen the case to revoke an order of confirmation procured by fraud under §1144 of the Code. If the plan or confirmation order provides that the case shall remain open until a certain date or event because of the likelihood that the court's jurisdiction may be required for specific purposes prior thereto, the case should remain open until that date or event.
Link? I don't recall the LT making that argument about a matrix in POR 7, so I am skeptical. I recall them discussing POR 6 Class 20 but what is in drafts of the final contract is irrelevant. Otherwise just about any term of a final contract would always be subject to dispute.
The definition of preferred equity interest in the POR explicitly listed the Reits, but failed to include the Underwriters' Claim. If the Reits had not been so listed, the LT would not have been able to put them in Class 19 either. The POR was put to a vote and approved and confirmed by the court as written. The LT has no power to amend the POR itself or pretend that the underwriters were included in the definition . The inclusion of the Reits and no mention of the underwriters in the definition, precludes the underwriters from becoming part of Class 19.The expression of one thing implies the exclusion of others (expressio unius est exclusio alterius). The Third Circuit follows this rule of contract construction.
Maybe then if no commissions doesn't work, the brokerage houses will have to go to negative commissions? Pay people say $5 per $500 trade.
Where do you find that the Final Stipulation was made public before 2019? The LT merely stated in a press release that the underwriters were issued wmih shares in accordance with the terms of the POR. That was a deliberate lie and coverup imo. Also, the LT , nor anyone, has the power under the business judgment rule to change the terms of the governing instrument. Why is it that Marta was allowed to refile after the waterfall reached Class 18 to see if it would be worth doing, but Alice is not extended the same courtesy?
Since a Motion For Final Decree To Close Bankruptcy requires debtors to aver "that all distributions have been made in accordance with the plan" and a party in interest is allowed to object to the Motion, that tells me Alice beat the deadline to complain, because that is the underlying point of her appeal.
The original stipulation simply allowed the underwriters to be put in Class 18 or equity. It did not state which equity. But somebody was interested in protecting his common escrows to the extent of even deliberately violating the terms of the POR. And do not forget that Alice is trying to protect commons, by arguing that none of the underwriters claim should have been allowed at all given case precedent.
Well consider that edgar sargents email was written a day after the por became effective which showed the underwriters claim had already been settled at that point. (This information was never put in the disclosure statement). Then consider what the market value of a common share of wamuq was around that point and then ask yourself if the underwriters were expecting only $1.4 million, $72 million, or $72 million plus. Then do the division, the conversion from wamuq to wmih, and then the coop split. In your evaluation remember that the underwriters probably know what would come back to equity. And consider if they voluntarily went back to class 18, their 72 million claim would be added to the other 46 million claims and they would get 72/118 of $34 million available for disbursement to Class 18. I will not do the computation for you or others, but it seems to me to have an adverse affect on commons much much greater than 3 per cent imo. I am glad I do not own common escrow markers.
The markers we have been told by the LT are merely for the distribution of shares in the disputed equity account. The LT trust mandates that LTI's be issued. I would think that is necessary for IRS purposes.
Well if one accepts the notion that notwithstanding the cancellation of a prospectus it is still effective once the bankruptcy closes, then wouldn't it follow that notwithstanding a Final Decree the bankruptcy will always remain open? And if the bankruptcy always remains open, then the prospectus can never be revived? So silly.
preferred
income
equity
redeemable
securities
That doesn't stop someone with commons from objecting to the settlement approval or the bankruptcy closing.
I do not see anyone negotiating/representing commons in any possible settlement.
I have trouble with Rozen stating all claims have been settled. Doesn't that mean there is no intention of putting the underwriters in Class 18? And if the preferred equity interests are made whole again, that means p escrows have to at a minimum get back shares the p's were shortchanged and the commons have to fork up the shares. When commons realize this is not an insignificant amount, the common escrows will object to the settlement imo. If nothing is truly coming to escrows, this should have been settled by now imo. Yet it hasn't been.
If I recall correctly the LT issued a press release when Piers were issued their LTI's. Have LTI's even been issued to Class 18 yet?
Has Class 18 been paid?
If the district court rules in Alice's favor will the LT appeal that decision? If the district court rules against Alice, will she take it to the appellate court?
Seems to me the bankruptcy will not close this year.
The hearing tomorrow is probably concerning Class 18 claims only. The LT has to have the court rule that the time for Marta to re-file has elapsed. There may be other class 18 claims that have not settled and perhaps the LT is seeking the court's direction as to how to proceed. Class 18 are based on claims for indemnity. The POR already discharged the Reorganized debtors for ALL claims in return for the monies put in the LT and recovered by the LT to pay the claims. So there is no need for the court to grant any indemnifications. How silly. The hearing tomorrow will have nothing to do with Alice's appeal. The district court now has jurisdiction over that matter and the bankruptcy court can do nothing concerning Alice's objection until the appeal is ruled on by the district court. If I recall correctly, the LT in its memorandum in opposition to the objection conceded she was a P escrow holder. And even if the LT did not, it certainly has not raised the issue on appeal and thus that issue is waived. The only slop I saw was on the LT's response both in the bankruptcy court and especially on appeal.
Who to believe?
"These overnight interest-bearing loans unwind the next morning, with the Fed getting its $75 billion in cash back, and the dealers getting their collateral back. As these operations were undertaken every day for the past four days, it’s essentially the same $75 billion that gets recycled every day. The daily amounts are not additive."
https://wolfstreet.com/2019/09/20/fed-admits-plan-a-of-controlling-money-market-rates-fails-shifts-to-plan-b-repos-which-was-plan-a-till-2008/
The same trusts mentioned in the link appear to be the same trusts footnoted in the Exhibit H Claims Matrix in the POR and Disclosure Statement.
Some ETF's are designed to do just that
https://www.investopedia.com/articles/etfs-mutual-funds/042716/3-best-etfs-short-sp-500-sh-sds.asp
From what I gather from the following link which explains the set up of these trusts were with WMB . WMI subsequently guaranteed the note obligations of wmb thereunder and the bankruptcy estate was liable under those guarantees. So imo, if there were any actual assets other than debentures in the trust, the wmb fdic receivership would get them not WMI/LT.
http://www.kccllc.net/documents/0812229/0812229120419000000000004.pdf