Mr Cooper Group Inc (COOP)

[Dmdmd2020]

I want to point out the very first document filed by Washington Mutual Incorporated Investment Corp. (WMIIC)

http://www.kccllc.net/wamu/document/0812228080926000000000001

PDF page 1 of 10 (bottom of page):

“Estimated Assets ________X $500,000,001 to $1 billion

Estimatesd Liabilities ______ X $0 to $50,000”



PDF page 9 of 10:

Stewart M. Landefeld (Executive Vice President) filed and stated:

“WMI Investment Corp. in the above-captioned case, certifies that Washington Mutual, Inc. Owns 100% of the equity interests in WMI Investment Corp.”

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https://www.prnewswire.com/news-releases/wmih-corp-announces-dissolution-of-wmi-investment-corp-300584678.html

“SEATTLE, Jan. 18, 2018 /PRNewswire/ -- WMIH Corp. (Nasdaq: WMIH) (the "Company") today announced that it has completed the dissolution of its wholly-owned subsidiary WMI Investment Corp. ("WMIIC"). Earlier today, WMIIC filed a Certificate of Dissolution of WMIIC with the Office of the Delaware Secretary of State. The dissolution of WMIIC was effective immediately upon the filing of such certificate.

Prior to September 26, 2008, WMIIC held a variety of securities and investments; however, such securities and investments were liquidated and the value thereof distributed in connection with implementing the Company's Seventh Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code. As such, WMIIC did not have any assets or operations at the time of its dissolution. “

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IMO...conclusions as of December 08, 2018:

1) WMI owns 100% equity of WMIIC, not the assets of WMIIC. Thus WMILT/WMI Escrow Marker Holders owns 100% equity of WMIIC, not the assets of WMIIC.

2) WMIIC did declare assets

3) upon dissolution, WMIIC owned no assets.

So, why is this so important?

IMO...WMIIC was or it became a Special Purpose Vehicle/ Special Purpose Entity (SPV/SPE)

The following is a description of what a SPV/SPE actually is, and how it is required in securitizations of assets.

The following are cited from “Securitization: The Financial Instrument of the Furure” by Vinod Kothari (2nd edition 2006).

Page 11-12

Another phrase commonly used in securitization exercises is bankruptcy remoteness. This means the transfer of the assets by the originator goes bankrupt, or falls into other financial difficulties, the rights of the investors on the assets held by the SPV are not affected. In other words, the investors would continue to have a paramount interest in the assets irrespective of the difficulties, distress or bankruptcy of the originator. Bankruptcy remoteness could also be related to the issuer, that is, the special purpose vehicle is ideally so structured that it cannot go bankrupt. Technically, it is never possible to guarantee that the SPV will not go bankrupt, but the structural protection against bankruptcy relies on a basic tenet of life that we often forget. All worries are associated with wealth. If the SPV is so structured that it can have no wealth and no liabilities, it obviously can have no worries, including worries as to bankruptcy.

Page 15-16

Box 1.3 Why Special Purpose Vehicles?
Special purpose vehicle is a transformation device, it is not an entity with substance, assets or income. It is a mere legal fiction that holds assets and issues securities.
It does not add any credit, value or support to the assets.
The results is that assets get converted into securities, the special purpose entity acting as a conversion device.
The only backing of the securities issued by the entity is the assets, so these securities are asset-backed securities.

Special Purpose Vehicle
A vehicle, whether special purpose or general purpose, is not required in case of asset sales in general, but is required for securitization transactions.
Creation of marketable securities is not possible without a conduit or vehicle that will house the assets transferred by the originator and create securities based on such assets. Therefore, a vehicle is required to serve as an intermediary between the originator and the investors. But or such a vehicle, a transfer of assets between the originator and the investors will be a direct bilateral transfer and any further disposal thereof by the investors will be fraught with problems. We will discuss more of these problems later.
That is why we need a vehicle, but why a special purpose vehicle? The idea of a special purpose vehicle is to clothe an asset(s) with the garb of incorporation, so that one who owns the securities of the vehicle really owns the assets, no more and no less. A general purpose, or operating company, is not fit to hold securitized assets as such a company might have other assets and other liabilities, each of which might interfere with the exclusivity of rights over the assets that the transaction intends to give to the investors.
If an operating company holds assets, it might incur expenses, and/or incur liabilities, and might go bankrupt, thereby destroying the transaction. By its very nature, a special purpose vehicle is a legal shell with only the specific assets transferred by the originator, and those assets are either beneficially held by the investors or collateralize the securities of the vehicle; there is nothing left in the vehicle for anyone to have an interest in. A special purpose vehicle is a legal entity, but a substantive non-entity. This is what makes a special purpose vehicle bankruptcy-remote: Taking the special purpose vehicle to bankruptcy is almost the same as taking legal action against a pauper.

Page 640
The following limitations should be imposed in the constitutional documents to make the SPV bankruptcy remote:
The company’s purpose should be limited. The purpose will depend on the function of the SPV. Issuer SPVs will have the purpose of acquiring the assets of the originator, issuing securities and all ancillary functions.
The company’s ability to incur indebtedness should be limited. The nature of the limitation will depend on the limited liability company’s role in the transaction.
The company should be prohibited from engaging in any dissolution, liquidation, consolidation, merger or asset sale and amendment of its articles of organization as long as the rated obligations are outstanding.
The company must have an independent director. Preferably, the majority of the Board must be independent.
The unanimous consent of the independent directors and members should be required to (i) file, or consent to the filing of, a bankruptcy or insolvency petition or otherwise institute insolvency proceedings; (ii) dissolve, liquidate, consolidate, merge or sell all or substantially al of the assets of the corporation; (iii) engage in any other business activity; and (iv) amend the company’s organizational documents.
The company should agree to observe the “Separateness Covenants” (see above).




Page 592
Safe Harbor
Delaware
On January 17, 2002, the state of Delaware enacted the Asset-Backed Securities Facilitation Act, 6 Del.C. 2703A (the “ASBFA”). The ABSFA effectively creates a safe harbor under Delaware state law for determining what constitutes a true sale in securitization transaction.
?The ABSFA first provides that any “property, assets or rights purported to be transferred, in whole or in part, in the securitization transaction shall be deemed to no longer be the property, assets or rights of the transferor.” Given the foregoing provision, to the extent Delaware law applies, the traditional legal criteria used in determining what constitutes a true sale in the context of a securitization is intended to be irrelevant.
?The ABSFA further states that a “transferor in the securitization transaction…to the extent the issue is governed by Delaware law, shall have no rights, legal or equitable, whatsoever to reacquire, reclaim, recover, repudiate, disaffirm, redeem or recharacterize as property of the transferor any property, assets or rights purported to be transferred, in whole or in party, by the transferor.” The ABSFA also provides that in “the event of a bankruptcy, receivership or other insolvency proceeding with respect to the transferor of the transferor’s property, to the extent the issue is governed by Delaware law, such property, assents and rights shall not be deemed party of the transferor’s property, assets, rights or estate.”
?Thus, effectively, the state law makes a securitization transaction completely free from risk of recharacterization.

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IMO...overall conclusions:

1) WMIIC was a SPV/SPE which bought assets in order to transfer them to another SPV/SPE (which specifically are in Delaware Statutory Trusts (DST) such as Thackeray III).

March 05, 2012 —WMI/WMIIC contracts CSC Trust Company of Delaware as Delaware resident trustee. Therefore, WMILT can function as a proper liquidation trust.

https://www.sec.gov/Archives/edgar/data/933136/000090951812000131/mm03-1212_8ke101.htm

“WMI LIQUIDATING TRUST AGREEMENT, dated as of March 5, 2012 (this “Trust Agreement”), is by and among Washington Mutual, Inc. (“WMI”) and WMI Investment Corp. (“WMI Investment” and, together with WMI, the “Debtors”), as debtors and debtors-in-possession, William C. Kosturos, as liquidating trustee (together with any successor or additional trustee appointed under the terms hereof, the “Liquidating Trustee”), and CSC Trust Company of Delaware as the Delaware resident trustee (together with any successor Delaware resident trustee appointed under the terms hereof, the “Resident Trustee” and collectively with the Liquidating Trustee, the “Trustees”) of the WMI Liquidating Trust (the “Liquidating Trust”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Debtors’ Seventh Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, dated December 12, 2011, as confirmed (including all exhibits thereto, as the same may be further amended, modified, or supplemented from time to time, the “Plan”).”

March 19, 2012–Effective Date of POR7

June 27, 2017– WaMu 1031 Exchange creation in Delaware

December 08, 2017–
a) WaMu 1031 dissolution in California
b) Long Beach, Wamu Capital Corp., WMMSC, WMAAC, and one other WMB subsidiary merged with JPMC

December 11, 2017– DB Globic letter to investors stating distribution from MBS Trusts starting after January 2018

January 18, 2018– WMIIC dissolution in Delaware

IMO...WMIIC was the conduit SPV/SPE which transfered all assets from all subsidiaries to DST such as Thackeray III Bridge.

WMI/WMILT/WMI Escrow Marker Holders are 100% the rightful equity beneficial owners of all assets in DST which hold all the assets and non-banking assets (i.e. real estate, mineral rights, beneficial interests of certificate participation in MBS Trusts created by WMI subsidiaries)