~ So, Regarding The Washington Mutual Liquidating Trust ~
As the study and research of all things WMI (oldco) - WMIH-Corp (newco) - The legal process that brought us here, - and, - the Washington Mutual, Inc. Liquidating Trust - continues, ...
According to the documents revealed, not only is it legally impossible for a releasing legacy equity holder to be issued an LTI (a Liquidating Trust Interest) ... it is actually also mathematically impossible as well' ... Remember, ... a class 16' piers security was "capped" by the Court at $10.52 per share, as a base number, and, was allowed to continue to receive FJR interest "ON THE CLAIM" until satisfied' ... keep the word "capped" in mind as we continue ... it's important'
prior to reading the relevant footnotes, a review the Tranche defined participants will be helpful,
Tranche 4 = Allowed Senior Notes Claims and Creditor Class 16' (piers security's)
Tranche 5 = General Unsecured Claims --- Rule 510(b)
Tranche 6 = Equity Class 19 and Class 22 Legacy Releasing' Participants
So, Moving forward' ...
Tranche 5 and Tranche 6 will never be in a legal or mathematical position to be issued an LTI (Liquidating Trust Interest) as Footnote # 1 reveals' ...
... The Plan of Reorganization "capped" the amount of return available to the class 16's ... The Plan of Reorganization DID NOT change the "face amount" of the security' ... "if proceeds exceed the face amounts issued to current LTI holders" ... and the Courts assigned capped amount ($10.52) plus FJR, ... ON THE CLAIM ... will never' exceed the face amount of the security'
So, of the four available distribution methods disclosed within the documents', The distribution mechanics allowed, ... which again, are defined to, in Exhibit C' of the Disclosure Statement ... adhered to, within Attachment H' of the Plan, ... reaffirmed within Jon Goulding's submission "In Support Of The Plan", ... and approved, within the Courts Signed approval of Plan 7'
So' ... I am obviously never going to get a Runoff Note, ... I'm NOT going to ever get an LTI' ... So, ... I am only in a position to receive a ... number 1) = Cash (distribution) ... or a ... number 4) common stock in the reorganized company (distribution) ... while the Liquidating Trust is allowed to perform its designated function as a ... "Grantors Trust = Pass-Through Trust" ... for tax purposes'
Footnote 1) Liquidating Trust Interests are not issued to holders of subordinated claims and equity interests. Additional LTI's will only be issued to holders of subordinated claims and equity interests if proceeds exceed the face amounts issued to current LTI holders.
Footnote 2) A claim by a holder of an Allowed Senior Notes Claim with respect to Floating Rate Notes against any of the Debtors or the Debtors' estates for interest accrued during the period from the Petition Date up and including the date of final payment of such Claim, in an amount equal to (a) such holders Postpetition Interest Claim minus (b) such holder's Intercreditor Interest Claim.
Again, as I described, ... when the Court "capped" a piers security, the Court eliminated the possibility of a piers security ever being able to "exceed face" amount of the security, with the FJR returns paid over time future', plus the capped base amount' ... again, the Court "capped" the amount of return' of the piers' The Court DID NOT or COULD NOT adjust the designated security's "face amount" ...
again, The last creditor class (piers, class 16) will never be in a position to achieve its original face value, as the footnotes describe, being a requirement for Tranche 5 and Tranche 6 to be in a position to be issued an LTI' ... (Liquidating Trust Interest) ... Interest ... being the operative word'
Again, The Court was never in a position to change the original "face amount" of a class 16 security, however, the Court was within its Chapter 11 Re-Organizational right to limit or "cap" the return available to the creditor class 16 within the Plans Settled Approval
Tranche 4' ... as the footnotes describe, remain handcuffed to the LT, and restricted to receiving an LTI only ... remember, defined to a Liquidating Trust INTEREST ... once again, for discussion purposes, "INTEREST", being the operative word' ...
... Cash returns (distribution method # 1) not considered to be a Liquidating Trust Interest, can flow to Tranche 5 "General Unsecured Claims" (Rule 510(b)) ... while, Tranche 6 holds its position, to be able to receive a distribution method # 1 (cash) ... and ... distribution method #4 (common shares in the reorganized company)
RECAP;
So If; Liquidating Trust Interests are received ? ... they are to be distributed to Tranche 4'
So if; Other Than - a Liquidating Trust Interest is received ? ... Cash ... General Unsecured Claims must be considered'
So if; common shares in the newly reorganized company are received ? ... The only available recipient, are the owners of the markers' (Equity)
So if; Other Than - a Liquidating Trust Interest is received ? ... Cash ... once Tranche 5 has been considered ? ... then that will be distributed to Tranche 6'
... Simply Remember, ... Tranche 4, as described within BOTH' footnotes 1 & 2, are limited to a LT, issued LTI only' ...
Tranche 4 = Allowed Senior Notes Claims and Creditor Class 16' (piers security's)
Tranche 5 = General Unsecured Claims --- Rule 510(b)
Tranche 6 = Equity Class 19 and Class 22 Legacy Releasing' Participants
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