Mr Cooper Group Inc (COOP)

[Evintos]

Theoretically yes but I'm not sure how it would apply in KKR's case. Assuming additional shares need to be issued to current shareholders to prevent an ownership change, we're looking at an even more dilution and a PPS post dilution of under $1 (guaranteed).

However:

IRS Section 382 specifies a 3 year test period to prevent acquisitions for the purpose of immediate NOL usage. If my understanding is correct, after 3 years, any limitation on KKR assuming majority ownership disappears.

If the 3 year test period has been satisfied, considering that KKR initially got involved with WMIH in 2015 - WMIH/KKR never would've completed an acquisition prior to 2018 due to the 3 year test limit. Subsection (1).

Considering the prior attempt at acquisition in the late summer/fall of 2015, I'm not sure that the 3 year test limit applied to KKR but applied to WMIH itself, which has long since satisfied 3 years since it's (re)emergence in 2012 which would be subsection (3).

To my recollection there were no events that met the subsection (2) criteria.
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Excerpt below from 26 U.S. Code § 382 - Limitation on net operating loss carryforwards and certain built-in losses following ownership change

(i) Testing period
For purposes of this section—
(1) 3-year period
Except as otherwise provided in this section, the testing period is the 3-year period ending on the day of any owner shift involving a 5-percent shareholder or equity structure shift.

(2) Shorter period where there has been recent ownership change
If there has been an ownership change under this section, the testing period for determining whether a 2nd ownership change has occurred shall not begin before the 1st day following the change date for such earlier ownership change.

(3) Shorter period where all losses arise after 3-year period begins
The testing period shall not begin before the earlier of the 1st day of the 1st taxable year from which there is a carryforward of a loss or of an excess credit to the 1st post-change year or the taxable year in which the transaction being tested occurs. Except as provided in regulations, this paragraph shall not apply to any loss corporation which has a net unrealized built-in loss (determined after application of subsection (h)(3)(B)).