Logically...
If the trusts were tied to specific stocks (i.e. Ps, Ks, or Qs), there is an issue in that those stocks no longer exist. They have been replaced with escrow CUSIPS. I believe that the trusts would not be aware of who the individual stockholders are (in the cases of Ps, Ks, and Qs), rather are only interested in which class should be paid.
The question then becomes, will the trusts be allowed to pay directly to the CUSIPS or will they be forced to pay to the WMILT which will then pay the CUSIPS.
If it is the former, then the 75%/25% rule will not apply.
If it is the latter, I suspect the 75%/25% rule will apply.
All of that should be obvious to anyone following the discussion.
So, lets analyze the origins of that rule. If I understand it correctly, Ps and Ks (among others) were (with POR 6) in a position where Qs (commons) were going to get cancelled and they would receive 100% of the residue. Had this happened, Qs would likely (all but certainly) have not been granted CUSIPS and the trusts would have had no alternative other than to remit that money to WMILT.
Then came the renegotiation resulting in POR7. This (if I recall correctly) is when the 75%/25% rule was added. It allowed Qs to sit at the table and wait for dessert just like everyone else. In return for allowing the Qs to survive, the other classes were given the lion's share.
If you were in their position, would you have negotiated that split without being sure there were no loopholes that would funnel money away from the negotiated agreement and bypass paying you? I think not.
But it goes deeper than that. I believe that it is technically impossible for such a loophole to have been included in POR7.
I think we can all agree that the intent was that safe harbor assets will come back to the shareholders. However, the court never acknowledged any details about the existence of such assets. Legally, the court is not specifically aware of these trusts.
The court did assign WMILT as successor in interest, so that any assets of which the court was not specifically aware would flow to the stockholders. But the question is, how can the trusts be excluded from the 75%/25% rule in POR7 (a court document) if the court has not specifically acknowledged their existence?
To be sure, if the money comes through in such a way that it can ignore the 75%/25% rule, I will be much better off than if that rule is applied. Therefore I hope AZCowboy is right (assuming that more than 25% of that trust money is allocated to Qs).
However, if I were a 'betting man', I would bet that 75%/25% will apply to ALL assets. Oh, wait. I am a 'betting man' and first bet by buying Qs and then hedged my bet by converting part of the position to Ps and Ks during the time frame of POR6.
I am not bragging, I am saying this to illustrate the point that what is proper is not always what ends up happening. Just like a prize fighter, you must protect yourself at all times. Remember that sometimes return OF capital is more important than return ON capital. But I digress.
I certainly respect AZCowboy and appreciate his information. I also hope he will keep posting. He has been, in my opinion, in the 'top tier' of posters (along with some others). To be sure, he could be correct. It is possible that the Trust documents are written in such a way that the money will still flow to the intended class of stocks.
I certainly hope that is true.
I also am reasonably convinced that it is not.
Thanks to all posters of documents and well founded opinions.
