Tired of the low-ballers yet?!
Anyone who can rationally look at the uniqueness of events following the seizure of United Western Bank can not help but come away with an outsized settlement picture.
Meritor bank, seized in 1992, fought the FDIC for 19 years over wrongful seizure. Nearly the same size bank (in assets) as UWB, their settlement came to approximately $4.50 a share.
First mistake the low-ballers make is that they assume parity between bank holding companys share count. Meritor had over TWICE as many shares as UWBKQ. How many times have we read in the past this $4-4.50 dollar (or less gasp!) anticipated payout.
Comparable amount would be $9.20 for UWBKQ with less than half the number of shares.
Next, compare the length of time to settlement to get a quick assessment of settlement size. Bigger settlement = motivated FDIC. 19 years Meritor v.s. 3 years UWBKQ.
The FDIC won the initial trial, so why settle on appeal. Especially on the steps of the court house immediately after appeal filing, but before the briefs! Gosh, I wonder what they were afraid of seeing in those docs filed by plaintiff. Guess they did not want to drag it out 19 years. Maybe the shut down of the OTS had something to do with that? Too much crap going on to stay open.
Next, Meritor did not benefit from the time from seizure to settlement.
19 years lost. Yeah that saved the FDIC a bundle. UWBKQ reaps the time benefits because the years piled up after the appeal is dropped. 8 years, nice.
Next. No NOLS for Meritor. Hugh
Next No RMBS debacle to gain easy money in recoveries.
Next No LIBOR. Same, easy money.
Added up. Settlement will easily elipse the low ballers estimates and approach $27's number.
That's my opinion. And a Big Thank you to Guy Gibson is due.
