Mr Cooper Group Inc (COOP)

[ItsMyOption]

MY LETTER TO US TRUSTEE:

March 3rd, 2019

Mr. Clifford J. White, III
Director of the United States Trustee Program
441 G Street, NW, Suite 6150
Washington, DC 20530
Re: Washington Mutual, Inc. Case No. 08-12229 (MFW)

As you should understand WMI Equity holders have no legal representation. We are relying on the Fiduciary duties of the court appointed Trustee William Kosturos CRO (Chief Restructuring Officer) of WMI Estate, and the duties of U.S. Trustee, Pursuant to 28 U.S.C. § 584.

Pursuant to 28 U.S.C. § 584, the U. S. Trustee is charged with the administrative oversight of cases commenced pursuant to Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). This duty is part of the U. S. Trustee’s overarching responsibility to enforce the bankruptcy laws as written by Congress and interpreted by the courts. See United States Trustee v. Columbia Gas Sys., Inc. (In re Columbia Gas Sys., Inc.), 33 F.3d 294, 295-96 (3d Cir. 1994) (noting that U.S. Trustee has “public interest standing” under 11 U.S.C. § 307, which goes beyond mere pecuniary interest); Morgenstern v. Revco D.S., Inc. (In re Revco D.S., Inc.), 898 F.2d 498, 500 (6th Cir. 1990) (describing the U.S. Trustee as a “watchdog”). Pursuant to 28 U.S.C. § 584(a)(3)(B), the U. S. Trustee has the duty to monitor plans and disclosure statements filed in Chapter 11 cases and to comment on such plans and disclosure statements.


Trustee William Kosturos, per the “underwriter stipulation,” rewarded the Underwriters from an unsecured Class 18 of $24 million creditor claim to a Class 19 $72 million claim which appears to be a questionable decision and should draw the concerns of UST. This special stipulation agreement was negotiated without any equity legal representation and it carved out an unfair deal injuring other equity holders. Additionally, the terms of that special agreement were not disclosed until a year later in the WMI-LT annual 10-K filing. The Underwriters never held stock or interest in Class 19 prior to or on the Petition Date and should not receive any special deals that injures other Equity holders within that Class.

I am requesting your powers as Director of the United States Trustee program to review Trustee William Kosturos, and request his clarifications.

(1) Why the Underwriters (Goldman Sachs, Morgan Stanley and Credit Suisse) got nearly $72,000,000 in Class 19 in the March 28, 2013 stipulation when they should have received, at most, a claim maximum of $24MM Class 18 (a creditor claim, so they would have been capped); and

(2) Require Trustee William Kosturos to make the needed changes to force the Underwriters to have their $24MM claim moved back to Class 18, or at least have their claim capped at $24MM in Class 19.

(3) Require Trustee William Kosturos to define if the Underwriters claim is capped. The Underwriters do NOT have any ownership of Preferred shares so by definition of the Plan they must have a max capped amount that must be disclosed.


If you review Exhibit H of the WMI-LT's (Document 10666) 9/14/12 objection to the Underwriter's claim, you'll see that under Plan 6 the $72MM was put in a class that was to be DISALLOWED. This was done pursuant to a stipulation dated 2/3/11. (See link below). In the 2/3/11 stipulation, the Underwriters get just under $24MM in Class 18 (a creditor's class, which is CAPPED). This means that under Plan 6 the most the Underwriters could get would be $24 million.)

The Debtors Objection to underwriters claim 9/14/12 Docket # 10666 http://www.kccllc.net/wamu/document/0812229120914000000000006
The WMI-LT Objection expressly states that the Underwriters are entitled to NOTHING. Yet Trustee William Kosturos gave the Underwriters a special and unfair deal more than 1 year after others signed their releases.
It must also be noted that WMI-LT managers inserted ambiguous language within 23.1 of the Plan – Class 19 “Treatment of Preferred Equity Interests: Commencing on the Effective Date and subject to the execution and delivery of a release in accordance with the provisions of Section 41.6 of the Plan, each holder of a Preferred Equity Interest, including, without limitation, each holder of a REIT Series, shall be entitled to receive such holder’s Pro Rata Share of seventy five percent (75%) of (a) subject to the right of election provided in Sections 6.2(b), 7.2(b), 16.1(b)(ii), 18.2(b), 19.2(b) and 20.2(b) of the Plan, the Reorganized Common Stock, and (b) in the event that all Allowed Claims and Post-petition Interest Claims in respect of Allowed Claims are paid in full (including with respect to Allowed Subordinated Claims), any Liquidating Trust Interests to be redistributed;” IT IS UNCLEAR IF THIS AMBIGUOUS 75% LANGUAGE CAN MAKE UNDERWRITERS’ CLAIM WORTH MUCH MORE, OR IS IT CAPPED? Can the Preferred’s receive more than what APR / max PAR laws provide?

It should be noted within per 27.6 Duties of the Trustee, In all circumstances, the Liquidating Trustee shall comply with all of the Debtors’ obligations under the Global Settlement Agreement and in accordance with applicable law, and otherwise shall act in the best interests of all Liquidating Trust Beneficiaries and in furtherance of the purpose of the Liquidating Trust.


The U.S Trustee must review why, just six months later, on 3/28/13, that same $72MM claim that was ruled as $24MM creditors claim was given a higher claim by the LT-Trustee. This 3/28/13 stipulation essentially flips the $24MM to a $72MM claim; the latter is now valid and dilutes Class 19, which could be a tremendous amount because it appears to be uncapped; there's no limit to how much the Underwriters can get per 23.1 of the Plan.

Sincerely,
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