Mr Cooper Group Inc (COOP)

[bkshadow]

iPrelude, SOTUS Kicked Back to 10th Circuit...

...then the 10th Circuit acted upon it.

...not favorably to the PARENT.

...took some time to read the lead and following documents on Pacer.

The U.S. Supreme Court unanimously ruled in February to strike down the “Bob Richards rule,” which created a presumption that entities that are responsible for losses that give rise to tax refunds should get those tax refunds, unless there was a clear agreement to the contrary. The high court sent the case back to the U.S. Court of Appeals for the Tenth Circuit, ordering it to decide the case again without applying the Bob Richards rule.

...which then had to determine, whether a Tax Sharing Agreement or not existed, what was the evidence of whether the relationship of the PARENT to the SUBSIDIARIES was a "Debtor-Creditor" relationship (in such case the NOL Refund in question goes to the PARENT) or an "Agency" relationship (in such case the NOL Refund in question goes to the SUBSIDIARY; the Receivership of the Bank under the FDIC).

On Tuesday, (May 26, 2020) the Tenth Circuit followed those orders, examining the parties’ contract to determine whether, when the parent company declared bankruptcy while in possession of the tax refund, the parent company was a debtor to or agent of its subsidiary. If a debtor, the refund would go into the parent’s bankruptcy estate and the subsidiary would be one of multiple creditors. If an agent, the subsidiary would get the refund.

A three-judge panel for the Tenth Circuit found that the contract was ambiguous on that point, but that a portion of the contract required the court to construe ambiguities in favor of the subsidiary and its receiver, the Federal Deposit Insurance Corporation (FDIC), which meant in this case that the parent company was the subsidiary’s agent.

“Because the Agreement creates an agency relationship between UWBI and the Bank, we conclude that the tax refund at issue belongs to the Bank, and that the FDIC, as receiver for the Bank, was entitled to summary judgment in its favor,” wrote Judge Mary Beck Briscoe.

So, taking a look back, and using the above logic, the litigation arguments were the same and "did the WMI/Subsidiaries Tax Sharing Agreement" represent a "Debtor-Creditor" or "Agency" relationship?

The TSA is posted below the following notation.

The Global Settlement Agreement, in estimation, allocated the tax refunds as follows and, IMO, indicates the parties were split on who would prevail and the Debtor obtaining $2,550,000,000 or 44% represented a literal "draw."




2019 10-K Exhibit 10.1
August 31, 1999 Tax Sharing Agreement

130
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<DESCRIPTION>TAX SHARING AGREEMENT
<TEXT>

<PAGE> 1
EXHIBIT 10.1


TAX SHARING AGREEMENT

THIS TAX SHARING AGREEMENT ("Agreement") is made as of August 31, 1999 by
and among Washington Mutual, Inc., a Washington corporation ("WMI"), Washington
Mutual Bank fsb, a federal savings bank ("WMBfsb"), Washington Mutual Bank, a
state chartered savings bank ("WMB"), New American Capital, Inc., a savings and
loan holding company whose principle subsidiary is Washington Mutual Bank, FA, a
federal savings association ("WMBFA") and Aristar, Inc., a Delaware corporation,
on behalf of themselves, each of their current subsidiaries and all subsidiaries
that any one or more of them may own in the future (together, the
"Subsidiaries"). This agreement supersedes the Tax Sharing Agreement dated March
30, 1998 among WMI and subsidiaries.

WHEREAS, WMI owns 100% of the issued and outstanding capital stock of
WMBfsb, WMB and NACI.

WHEREAS, WMI owns either directly or indirectly, 100% of the issued and
outstanding capital stock of the Subsidiaries;

WHEREAS, NACI owns 100% of the issued and outstanding capital stock of
WMBFA and Aristar, Inc.;

WHEREAS, WMI, WMBfsb, WMB, NACI, WMBFA, Aristar, Inc., and the
Subsidiaries join in the filing of a consolidated federal income tax return
and combined or consolidated tax returns in various states and other local
taxing jurisdictions; and

WHEREAS, it is the desire of the parties hereto to enter into a definitive
written Tax Sharing Agreement, which agreement describes the manner in which the
consolidated federal income tax liability is shared among the members of the
consolidated group and the manner in which the combined or consolidated state or
other local tax is shared among members of the combined or consolidated group;

NOW, THEREFORE, in consideration of the foregoing premises, the parties
agree as follows:

1. For all taxable years during which WMBfsb, WMB, NACI, WMBFA, Aristar,
Inc., or any Subsidiary is a member of an "affiliated group" of WMI as
defined in Section 1504 of the Internal Revenue Code and is required to
join in the filing of a consolidated federal income tax return of WMI and
its consolidated subsidiaries, the federal income tax liability of such
consolidated group shall be allocated and shared among WMBfsb, WMB, NACI,
Aristar, Inc., and each Subsidiary as if such entities filed a separate or
consolidated return, as the case may be.

2. The federal income tax accounts between WMI, WMBfsb, WMB, NACI, WMBFA,
Aristar, Inc., and each subsidiary shall be settled in the following
manner:
<PAGE> 2

(a) WMBfsb, WMB, NACI, WMBFA, Aristar, Inc., and each Subsidiary shall
make payments on account of their federal income tax liability to
WMI in the same manner and at the same time as if such entities were
filing separate returns or separate consolidated returns with, and
making payment of taxes (including estimated taxes) to the Internal
Revenue Service ("IRS").

(b) WMI shall pay to WMBFA, WMBfsb, WMB, NACI, Aristar, Inc., and each
Subsidiary amounts that may be due them on account of (i) any
overpayment of their said tax liability for a taxable year or (ii)
any credit that may result from the utilization of their net
operating loss for a taxable year, such credit being determined in
accordance with the provisions of item 1 above, within 30 days after
the consolidated return is filed for that taxable year or, to the
extent any such amount due must be recovered from the IRS, within 30
days after payment is received from the IRS, or, if the amount due
represents an overpayment of estimated tax which is in excess of
WMBFA's, WMBfsb's, WMB's, NACI's, Aristar, Inc.'s or a Subsidiary's
estimated allocable share of the consolidated federal income tax
liability for the year, then such excess shall be paid by WMI within
30 days of receipt from WMBFA, WMBfsb, WMB, NACI, Aristar, Inc., or
the Subsidiary of a written explanation of the overpayment.

3. For all taxable years during which WMBfsb, WMB, NACI, WMBFA, Aristar,
Inc., or any Subsidiary is included in a combined or consolidated tax
return with WMI or another of its subsidiaries, the state or other local
tax liability of such combined or consolidated group shall be allocated
to:

(a) WMBfsb, WMB, NACI, WMBFA, Aristar, Inc., and each Subsidiary as if
each of WMBfsb, WMB, NACI, WMBFA, and such other Subsidiary had
filed a separate, combined or consolidated tax return with each of
its respective subsidiaries and

(b) WMI to the extent the sum of the amounts determined pursuant to
clause (a) is different from the liability of the combined or
consolidated group.

In no event will the foregoing allocation result in treatment less
favorable to WMBfsb, WMB, WMBFA, and their subsidiaries than if they had
filed separate, combined or consolidated tax returns, as the case may be.

4. The state and other local tax accounts between WMI, WMBfsb, WMB, NACI,
WMBFA, Aristar, Inc., and each Subsidiary shall be settled in the
following manner:

(a) WMBfsb, WMBFA, NACI, Aristar, Inc., and each Subsidiary shall make
payments on account of their state and other local tax liability to
WMB in the same manner and at the same time as if such entities were
filing separate returns or separate combined returns with, and
making payments of taxes (including estimated taxes) to such state
or other local taxing authority. WMB shall compute its state and
other local tax liability in the same manner and at the same time as
if such it were filing a separate return with, and making payment of
taxes (including estimated taxes) to such state or other local
taxing authority.

(b) WMI shall make payments to WMB in an amount necessary to satisfy the
state and other local tax liability after considering the payments
computed in (a) above.

<PAGE> 3
(c) WMB shall pay to WMI, WMBfsb, WMBFA, NACI, Aristar, Inc., and each
Subsidiary amounts that may be due them on account of (i) any
overpayment of their said tax liability for a taxable year or (ii)
any credit that may result from the utilization of their net
operating loss for a taxable year, such credit being determined in
accordance with item 3 above, within 30 days after the combined or
consolidated return is filed for that taxable year or, to the extent
any such amount due must be recovered from any state or other local
taxing authority, within 30 days after payment is received from such
state or other local taxing authority, or, if the amount due
represents an overpayment of estimated tax which is in excess of
WMI's, WMBfsb's, WMBFA's, NACI's, Aristar, Inc.'s, or a Subsidiary's
estimated allocable share of the or combined State or local tax
liability for the year by more than 10%, then such excess shall be
paid by WMB within 30 days of receipt from WMI, WMBfsb, WMBFA, NACI,
Aristar, Inc., or the subsidiary of a written explanation of the
overpayment

5. Deferred tax assets and liabilities of WMI, WMBfsb, WMB, NACI, WMBFA,
Aristar, Inc., and each Subsidiary will be handled in a manner consistent
with Statement of Financial Accounting Standards No. 109 and, as it
relates to WMBfsb, WMB, and WMBFA, consistent with bank and thrift
regulatory guidelines. A copy of the current regulatory guidelines is
attached hereto as Exhibits A and B.

6. This agreement shall remain in full force and effect until modified or
amended by the mutual agreement of the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
this date first above written:

Washington Mutual, Inc. New American Capital, Inc.

By /s/ KERRY KILLINGER By /s/ KERRY KILLINGER
------------------------------------ --------------------------------
Kerry Killinger, Chairman, President Kerry Killinger, President
and Chief Executive Officer


Washington Mutual Bank fsb Aristar, Inc.

By /s/ KERRY KILLINGER By /s/ CRAIG CHAPMAN
------------------------------------ ----------------------------------
Kerry Killinger, President Craig J. Chapman, President


Washington Mutual Bank Washington Mutual Bank, FA

By /s/ WILLIAM A. LONGBRAKE By /s/ WILLIAM A. LONGBRAKE
------------------------------------ ----------------------------------
William Longbrake, Vice Chair and William Longbrake, Vice Chair and
Chief Financial Officer Chief Financial Officer