Boardpost from bopfan minutes ago:
CSNY
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Re: WMI (The Parent) Income Generation Both' pre & post September 2008
« Reply #33 on: Today at 01:27:31 PM »
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Last night I was thinking about the how and why a residual from the FDIC-R could remain hidden. As to the 'why', my mind went to Weil, which controlled the DIP and would have known all about the receivership as a possible source of hidden value. From the beginning of the Chapter 11 Weil was working to mollify JPM and later to help the SNs steal all they could, so it had no interest in drawing attention to the receivership. I particularly recall Rosen representing that the case (meaning all the possible sources of value) had been "investigated to death". I never took that conclusory statement at face value, but didn't focus on what might be concealed in the FDIC-R vs. Weil's interest in keeping what was seen from reaching equity.
Once I became focused (thanks to AZ), the question became: "Did Weil demand to know if any of WMI's property was seized by the FDIC and, if so, did it follow through with the demand before the GSA was reached?" I don't know the answer to those questions. The litigation was settled and with a six year window for the FDIC to defray any scandal of having seized too much and with Weil wanting to keep information hidden, the motivations for keeping them hidden was strong. Further, from the first confirmation hearings the GSA became immutable despite the plan's many incarnations. If WMI/Weil had pressed forward the FDIC would have been compelled in the discovery process to reveal everything it seized. The GSA ended all litigation (and all dialogue) about the seizure and left the FDIC to conduct its business in private.
So much for the 'why'. As to 'how' the FDIC-R need simply remain silent until it closes out the receivership. Generally the receivership process is six months to one year, so any 'aha' moment usually occurs within that time frame. WMI/WMB was an entirely different case in scope, size, and complexity and I can't help feeling the six year duration was not just to give JPM and the FDIC time to evaluate everything (including the litigation they surely anticipated), but to put real distance between the seizure and any inconvenient truths that the FDIC might have to disclose.
The only publicly available information about the FDIC-R's assets is the $2.7B from the tax refunds and the JPM payment. As we've discussed exhaustively, anything owned by WMI (or its subsidiaries (other than WMB)) that was seized can't be used to satisfy WMB's creditors. Further, and per the P&A, WMB's subsidiaries' assets were not given to JPM. I received some information about their value, and it is considerable.
Boardpost post from bopfan late yesterday:
Quote from: CSNY on Yesterday at 05:44:57 PM
Actually, the FDIC press release dates on or after 3/19/12 because it refers to the plan confirmation.
Reading this statement one would not think the FDIC held any of WMI's property as it discusses whether, given its receivership resources, WMI will take as a residuary of WMB assets held by the Receiver. It makes no mention of holding any of WMI's assets or those of any WMI subsidiaries (other than WMB).
It was the debtor's job to marshal WMI's assets and reclaim the assets we've been discussing for several days now. Any residual interest in MBS is speculative, however, as I said several times, I trust an indenture trustee to properly identify the owner of a residual interest in such securities. Mortgages are another matter. If the FDIC seized documentation indicating WMI or non-WMB subsidiaries owned interests in mortgages (all of which would be serviced by JPM) it had a duty to surrender them and the DIP had a duty to recover them. I wondered whether the 363 settlement encompassed any of the assets we're discussing. The relevant 363 language is posted below and the only provision that bothers me is the phrase: "(ii) any checks made out to or funds received by WMI". I didn't like this as it doesn't provide any detail, but I know Susman would never have allowed anything to slip through under such innocuous language.
What I'm left with is the fact that the Liquidation Trust markers are interests in the claim WMI filed against the FDIC. We know about the $2.7B, the administrative claims, and the other claims, but we don't know if there are undisclosed assets besides the $2.7B. Nothing in the FDIC's statement refers to any other resources, whether originally owned by WMB or not.
“363 Sale and Settlement” shall mean, collectively, the compromise and settlement set forth herein pursuant to Bankruptcy Rule 9019 and the Plan regarding, among other things, and including, without limitation, agreements with respect to the ownership of the Plan Contribution Assets and the sale, transfer and assignment pursuant to the Plan and sections 363 and 365 of the Bankruptcy Code
(a) of any and all right, title and interest any of the WMI Entities may have in
(i) the Trust Preferred Securities,
(ii) any checks made out to or funds received by WMI, or otherwise for the benefit of the WMI Medical Plan, the JPMorgan Chase Flexible Benefits Plan for Heritage WaMu Active Employees and the JPMorgan Chase Flexible Benefits Plan for Heritage WaMu Retirees,
(iii) the JPMC Rabbi Trusts and the JPMC Policies, as defined below,
(iv) the WaMu Pension Plan and the Lakeview Plan and all of the sponsor’s interest in the assets contained in any trusts or otherwise associated with such plans,
(v) the WMI Medical Plan,
(vi) certain intellectual property set forth in Section 2.17 hereof,
(vii) the Anchor Litigation,
(viii) the Visa Shares,
(ix) JPMC Wind Investment Portfolio LLC,
(x) the Bonds, and
(xi) certain tax refunds
as set forth in Section 2.4 hereof, in the case of each of the foregoing (a)(i) through (a)(xi), to JPMC or its designee, free and clear of all liens, Claims, interests and encumbrances of any Person, other than the Claims, interests, liens and encumbrances of any JPMC Entity, if any, and (b) of any and all right, title and interest of an Acquisition JPMC Entity and any subsidiary or Affiliate of an Acquisition JPMC Entity may have in (i) HS Loan Corporation, (ii) the WMI Rabbi Trust and the WMI Policies, as defined below, (iii) the intellectual property referred to in Section 2.17 hereof, and (iv) certain tax refunds as set forth in Section 2.4 hereof, in the case of each of (b)(i) through (b)(iv) to the WMI Entities or their designee, free and clear of all liens, Claims, interests and encumbrances of any Person, other than the Claims, interests, liens and encumbrances of the WMI Entities; provided, however, that, in accordance with section 1146 of the Bankruptcy Code, the sales, transfers or assignments contemplated herein pursuant to the 363 Sale and Settlement shall not be subject to any transfer or stamp tax.
To me, the language in that bolded Section (a)(ii) about who the checks are made to is fairly specific and don't think it could be overlapping to any other checks that WMI received outside those benefit plans that JPMC was taking. If I recall correctly, that 363 Sale and Settlement was also specific to only what JPMC got out of the GSA. Also, don't think it would have included any funds that would have been collected by the FDIC-R from any residual payments to WMI
AI
