Mr Cooper Group Inc (COOP)

[ChangnoiPlaza]

Answer by FDIC to my questions:


Please note that the information provided in this response does not, and is not intended to, constitute legal advice and should not be relied upon as such. I recommend you consult a licensed attorney if you want legal advice regarding the questions you have raised.

Before I answer your questions, the first thing to understand is that Washington Mutual Bank was closed by the Office of Thrift Supervision (a federal agency that no longer exists) on September 25, 2008 and the FDIC was appointed Receiver of the bank that same day. Washington Mutual, Inc. was the holding company for the bank. Washington Mutual, Inc., and the interests of equity, debt holders or other creditors of Washington Mutual, Inc., are not included in the closure or receivership of the bank. Washington Mutual, Inc. filed for bankruptcy protection on September 26, 2008. Please contact Washington Mutual, Inc. directly for information about this bankruptcy proceeding. Please note that the closing of Washington Mutual Bank and the bankruptcy of Washington Mutual, Inc. are separate legal proceedings.

More information about the status of the receivership of Washington Mutual Bank can be found online at: https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/wamu.html

Regarding your questions, responses are below in underlined text :

1. Basic distribution of roles
As I understand the American law in the CH11 case, there are the following basic points:

1. There are legal regulations for a CH11 case.

YES, the regulations are commonly known as the Bankruptcy Code (see 11 U.S.C. § 1100 et seq regarding Chapter 11).

2. The FDIC is both the supervising and the executing agency.

The FDIC continues to act as the Receiver of Washington Mutual Bank; it is not a supervisor.

3. The bankruptcy court is the legally supervising as well as the legally deciding body.

YES, but only for the bankruptcy of Washington Mutual, Inc., not the FDIC as Receiver.

4. The bankruptcy court must follow the legal regulations, the FDIC must follow both the legal regulations and the court orders.

The bankruptcy court must decide in accordance with the Bankruptcy Code. The FDIC, as Receiver, must follow applicable law in its receivership activities. The FDIC, as Receiver, is under the jurisdiction of the bankruptcy court only if the trustee or creditors raise claims that are properly adjudicated in the bankruptcy court.


Is this rough description correct? YES/NO (if No, what is different?) Please see above.

2. In 2008 Washington Mutual Bank was finally sold to JPM by the FDIC.

Is this sale already 100% completed YES/NO at this time? (If NO, what else has to happen?)

The sale is mostly complete, the terms of the sale are described in the Purchase and Assumption Agreement dated September 25, 2008 between the FDIC, as Receiver, and JPM. You can read this agreement by accessing the FDIC website provided above. The agreement terminated after six years, but some provisions are still in effect.

3. In 2008, the press / JPM announced that the sales price for the WMB was 1.889 billion USD.

Can you confirm this amount as the selling price? YES/NO (If NO, what sales price was defined?)

The winning bid made by JPM to enter into the Purchase and Assumption Agreement with the FDIC, as Receiver, was for $1.888 billion, and that amount is listed in Article VII of the Purchase and Assumption Agreement.

4. Since the selling price is determined by the book value of the assets transferred to JPM according to the legal guidelines as well as the PAA:

Can you give me a URL where this list of the determination of the book value can be traced?

No, the sales price was the amount of the winning bid by JPM.

5. If the selling price is exactly the stated amount of USD 1.889 billion, no further distributions would be made to the former owners of WMB (ESCROW holders), the legal requirement of the bankruptcy court that the Last Distribution must take place by 23 July 2020 would be satisfied.
Is that correct? YES/NO (If No, please provide further information)

If the FDIC, as Receiver, of Washington Mutual Bank has excess assets from the liquidation of the bank, distributions can be made to certain parties in accordance with the priorities established in 12 U.S.C. § 1821(d)(11)(A). The FDIC, as Receiver, anticipates that it will make a final distribution at a later date. It is unlikely that the Receiver will have sufficient funds to distribute to holders of receivership certificates issued to subordinate note holders or equity holders of the bank.

Questions regarding distributions in the bankruptcy proceedings for Washington Mutual, Inc. should be sent directly to the company.

6. The purchase price of USD 1.889 billion was published by JPM / Presse very soon after the acquisition of WMB. However, this would contradict the legal regulation that the sales price must correspond to the book value, as at that time no well-founded and exact statement of the book values was available.

Can you confirm that the published sales price of USD 1.889 billion is the real sales price? YES/NO (If no, please provide further information)

As mentioned above, the price was JPM’s winning bid, and the FDIC, as Receiver, found that bid to be acceptable given its requirements under federal law.

7. If the real sales price is not the published sales price, there must be further distributions to the former owners of WMB (WAMUQ-Escrows).
However, this would contradict the court requirement that the Last Distribution should have been made by July 23, 2020.

Do you agree with me here? YES/NO (If no, please provide further information)

No, the sales price for the bank has nothing to do with the bankruptcy proceedings of Washington Mutual, Inc.

8. Since all these points mentioned above cannot work on their own, I see here only one variant that fulfills all points:

There is another institution ( I call it New WM Holding ) whose owner is defined by the shares of the WAMUQ- ESCROWs and which has received/will receive the real book value.
Since you, as the executive body, are dealing with this New WMH and you transfer the book values paid/received by JPM to it:

Does this general institution exist? YES/NO
If YES - Where is it managed?

Perhaps you are referring to Washington Mutual, Inc., which did own Washington Mutual Bank before it was closed. Questions regarding the bankruptcy of Washington Mutual, Inc. should be sent directly to the company. The FDIC, as Receiver, could make distributions of excess assets as described above to Question #5, but distributions to equity holders of the bank are unlikely.

Although we might be able to answer additional questions you may have, I again recommend you consult a licensed attorney if you are in need of legal advice.

Sincerely,


Patricia A Deaton
Resolutions and Closings Manager
DRR Customer Service