Not, save harbor… Just a little Research and all IMHO…
Where is the money coming from?
And,
My thoughts on save harbor assets, retained assets and retained interest …
All IMHO…
None of WaMu’s assets… are in safe harbor.
(In this excerpt…
I added the numbers 1), 2), 3), and 4) because I wanted to point out these 4 sources.)
On Mar 24, 2015, (link at Bottom)
The WMI Liquidating Trust Provided a news release stating…
…the Escrow CUSIPs were established for any potential distributions of shares of WMIHC common stock…
…Specifically, the Escrow CUSIPs do not, in and of themselves, entitle their holders to any possible future cash distributions from the 1) Trust, 2) WMIHC or the 3) Federal Deposit Insurance Corporation (either in its corporate capacity or as 4) the receiver for Washington Mutual Bank).
(I added the numbers 1), 2), 3), and 4) because I wanted to point out these 4 sources.)
As stated by the news release…
Money will not come from the Escrow CUSIPs themselves… the Escrow CUSIPs are for the distributions of WMIHC new shares only. But you can sell the shares for cash.
After the last of the shares are distributed our Escrow CUSIPs will disappear.
Which means no more Escrow Markers/Escrow CUSIPs,
No more, Section 41.6 of the Plan.
No more, distributions to only those that signed timely releases. (this is only in the bankruptcy)
No more, 75%, 25%, (this was for new company shares and any cash left in the bankruptcy, $0)
No more, bankruptcy.
IMHO…
Any distribution outside of the bankruptcy will go to the 27,000,000 total preferred shares… with a liquidation preference of $7.5 billion Dollars.
And the 1,704,958,913 total common shares
Not the signed timely releases…
24,802,644.26 preferred shares that released or the 1,194,340,178 common shares that released.
So, IMHO…
Everyone benefits outside of the bankruptcy.
Unintentionally, the above excerpt also says…
Any possible future cash distributions are from...
the Trust… WMIHC… the Federal Deposit Insurance Corporation…
or the receiver for Washington Mutual Bank.
So…
Money will only come from these 4 sources…
1, The Trust, (all money goes through the trust for tax purposes)
2, WMIHC, (this was money from the proceeds of the WMMRC insurance policies valued at $140 million, this money was used to pay off the run-off notes.)
3, the FDIC, ($274.1 Billion Dollars in assets… this is WaMu’s portion of the mortgage backed securities portfolio which are non-Debtor’s assets that were seized and sold by the FDIC.)
You are the Debtors; these are your assets.
4, the FDIC-R, (this is the Debtor’s Estate, which are all the Debtor’s assets… it’s $32.9 Billion in assets with $8 Billion in Debt.)
Some take the $32.9 Billion and subtract $8 Billion in Debt and get $24.9 Billion Dollars,
This $24.9 Billion Dollars is only from the Debtor’s assets at the FDIC-R, and does not account for the non-Debtor’s assets at the FDIC ($274.1 Billion Dollars).
$24.9 Billion plus $274.1 Billion equals to $299 Billion Dollars. (per/ the FDIC)
Quote from the FDIC…
“Excludes WAMU with total assets of $299 billion and zero estimated losses to the DIF”
And from the Inception document 09/25/2008. (Link at bottom)
Total assets $ 298,791,522,367
So…
To get these assets/cash, the WMILT will have to go through the courts…
So, after the bankruptcy, the LT will have to sue the FDIC for these assets. (Tranche 6)
I believe this lawsuit is just a formality or procedure, to make it legal, final and to release the FDIC.
We also have non-Debtor’s assets that were not seized by the FDIC, this was WMI’s Non-Banking corporate structure (about $7.3 Billion Dollars, this money was used to pay off the creditors)
$32.9 Billion plus $274.1 Billion plus $7.3 Billion Dollars equals to $314.3 Billion Dollars.
These are all WaMu’s assets… and these assets are not in safe harbor.
All IMHO…
Safe harbor assets, are assets that cannot be seized by the FDIC… then sold, by the FDIC.
Safe harbor assets cannot be seized then sold to JPMorgan Chase or to anyone else.
These assets are in safe harbor.
As we know…
The FDIC seized WaMu’s assets…
And we know…
All of WaMu’s assets have to be liquidated and converted into cash (sold)…
Including WaMu’s, WM-Bank’s assets (WMB)…
Which are assets within Assets and are owned by WaMu…
So…
If WaMu’s assets are seized and converted into cash…
Then…
WaMu’s assets are not in “safe harbor”.
Save harbor assets can not be seized and liquidated.
So…
It’s not WaMu’s assets that are in save harbor…
It’s WaMu’s securities that are in safe harbor…
It’s all WaMu’s securities…
The securities are owned by the investors…
Safe harbor, protects the investors from the FDIC.
Specifically, it’s the mortgage backed securities that are in safe harbor.
Not WaMu’s assets… WaMu’s assets have to be sold.
The mortgages are pooled together and converted into marketable securities then moved into a special purpose vehicle where they are isolated and away from a bankruptcy or the FDIC.
Bankruptcy remote refers to the special-purpose vehicle that is formed that holds the assets.
A mortgage backed securities portfolio is partly owned by its sponsor (WMI) and the mortgage backed securities investors…
So, there are two entities that own the mortgage portfolio, WaMu, and the investors.
We have WaMu’s portion of the mortgage portfolio and the investor’s portion of the mortgage portfolio.
Most of the cash ($299+ Billion Dollars) is from JPMorgan Chase purchasing WaMu’s portion of the mortgage portfolio… (these assets are not in safe harbor)
WaMu’s part of the mortgage portfolio, are WaMu’s assets and are not securities.
These assets have to be liquidated/sold.
The investors part of the mortgage portfolio are securities and are in safe harbor…
When WaMu filed for bankruptcy … the FDIC had the power to breach any contract entered into by WaMu… but not the securities.
The FDIC has the power to take WaMu’s assets, which are not securities, and convert those assets into cash, then use that money to pay off… the debt, the creditors, and the investors.
Although all of the mortgage backed securities (MBS) were seized…
It’s WaMu’s portion of the portfolio that was seized by the FDIC, then sold to JPMorgan Chase.
The MBS investor’s portion of the portfolio was not sold to JPMorgan Chase (safe harbor).
All of these MBS’s are still active and producing income for its investors.
And so, the investors will receive their payments plus the interest, until the mortgage is refinanced or paid in full.
And because JPMC purchased WaMu’s portion of the portfolio, JPMC will receive WaMu’s payments and interest, until the mortgages are refinanced or paid in full.
The $299 Billion Dollars the FDIC is holding…
is made up of the proceeds from the sale of WaMu’s portion of the mortgage portfolio… to JPMC… This $299 Billion Dollars belongs to WaMu.
JPMC purchased WaMu’s portion of the mortgage portfolio, plus any mortgage related assets.
WaMu’s assets are not in safe harbor.
This is from January 13, 2010 - Testimony before the Financial Crisis Inquiry Commission
(sorry, no longer linked)
JPMC states…
With the acquisition, we purchased approximately $240 billion of mortgage and mortgage related assets… with $160 billion in deposits…. and $38 billion in equity… We immediately wrote down most of the bad or impaired assets (approximately $31 billion) … and established proper reserves for the remaining assets, ….as well as for severance and close-down costs.
So…
This “$240 billion of mortgage and mortgage related assets” in this excerpt, is part of the $299 Billion Dollars the FDIC is holding…
And so…
With respect to the MBS’s and safe harbor…
It’s the MBS investor’s portion of the portfolios, (or their assets/securities) that are in “safe harbor” not WaMu’s assets.
But as investors in a bankruptcy, we want all of WaMu’s assets converted into cash… then pay the debt and creditors… then, outside of the bankruptcy, return whatever is left to the investors (the owners of the company).
So… IMHO…
Where is the money coming from?
From the FDIC…
We’re currently waiting for the bankruptcy to close, then we pursue the $299 Billion the FDIC has.
About retained assets and retained interest and the $299 Billion Dollars…
All IMHO…
Continued on next post…
Stay safe… Stay healthy
All IMHO and GLTA…
Jiminy…
Jiminy Christmas…
Just my opinion, research and curiosity…
Not intended to serve as a basis for investment in any security of any issuer. GLTA
