United Western Bancorp Inc (fka UWBKQ)

[imawswami]

E*Trade Letter w/indirect evidence of stipulation between UWBI & FDIC

Non-Transferable Securities Math made easy:
0=valueless
valueless~nonexistence
existence=value
value~ownership
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Letter
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May 11, 2023
Recipients:
Michael A. Pizzi Chief Executive Officer
Lauren Carney V.P. Customer Service
E*Trade Securities LLC (Customer Service)


Dear E*Trade,
This letter is in response to an email dated 5-1-23, sent by the brokerage, regarding removal of non-transferable securities from 2 customers contained in 3 accounts. The security in question is United Western Bancorp Cusip #913201109.

This issue of removal of personal property, in the form of non-transferable securities, has been an ongoing issue (2020 letter on record) between the brokerage and all account holders with this security, In the past the brokerage has suspended such removal and am hopeful the same condition may be found acceptable. As an alternative, it was suggested in past letter (on record) to assess a fee, as other brokerage houses maintain
(e.g. Ally Invest -Brokerage Arm of Ally Bank).

As before, my brother and I would gladly pay a fair and reasonable fee to cover the cost the DTC may access the brokerage to hold such securities in an account. Payment would be prompt upon receipt of bill.

I understand E*Trade may be reluctant to pursue a fee model. Obviously, it would be far easier to simply remove personal property (e.g. United Western Bancorp securities) for destruction without offering a remedy for the inability of the customer to compensate the DTC directly for non-transferable security holding costs.

Yet, the Brokerage is held here to a legal Duty of Care, This Care requires E*Trade to manage
a customer's account in the Best Interest of the client, even above the brokerage's own.

Removing personal property in the form of digital holdings, to facilitate destruction by the DTC,
without offering the customer a remedy -is unjust, and falls below the level of best interest.

The intermediary model, regulated by the SEC, firmly establishes the brokerage operating between buyer & seller, holder & record keeper. Thus the brokerage, by it's unique position, is straddled with satisfying both the customer and the regulator, and for that I and my brother offer to compensate E*Trade for the burden borne.

This fee option allows E*Trade to fulfill a Duty of Care owed to the customer, whereas blanket removal presents as a misrepresentation/mischaracterization of the situation, representing negligence or worse....

Please understand , holding United Western Bancorp in our accounts is not some fool's errand.
My brother and I hold nearly X% of the outstanding shares for a reason and will vigorously pursue account ownership of our personal property.

Enclosed you will find a brief explanation on the hidden value of this security, revealed in two BK7 filings -a value which favors both ourselves and you our brokerage provider.
Thank you,
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page 2. (filing # 696 & #710 were also included from here:
https://www.docketbird.com/court-cases/United-Western-Bancorp-Inc/cob-1:2012-bk-13815 also:
https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/unitedwestern.html
and
https://receivership.fdic.gov/drripbal/bank/10331?FIN=10331
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The Value of United Western Bancorp

In 2011 United Western Bank, the primary asset of UW Bancorp (holding company UWBKI), was seized by the FDIC. The holding company almost immediately filed suit for wrongful seizure. By 2012, UWBI, without it's primary bank asset, filed for chapter 11 BK. In early 2013 UWBI dropped their suit against the FDIC et al., satisfied with the results.

In filing #696 (enclosed) for the first time, we read that: (Highlighted) UWBI received income from the FDIC that was challenged by the IRS as taxable -for both 2016 & 2017.

Why is this significant? The FDIC is not a charity. They seize banks and are not known for doling out funds to BK7 holding companies. More importantly, the FDIC is involved in resolution, that is recovery of depositors funds as a result of a bank being placed into receivership.

Funds recovered must follow a priority of claims, with depositors first fully satisfied with recovered funds, followed by unsecured creditors to be made whole, before subordinated debt is satisfied. Lastly, any remaining funds recovered by the FDIC go to the corporation/shareholder (please see VIII. Priority of Claims).

Question: How can UWBI, representing the shareholders interest,(group 4 & last in priority) be placed ahead of claims of 1)Depositors, 2) Unsecured Creditors, and 3) Subordinated debt, when 1) Depositors have yet to be satisfied in this claims waterfall (see FDIC balance of $144 million in unpaid deposits.)?

Question: What is IRS Code Sec. 7507 (highlighted in filing 696 Part B) and why did UWBI successfully use this statute against IRS taxation claims?

Answers: The FDIC violated their own rules of priority claim with a dispensation -it appears a stipulation exists between UWBI and the FDIC, obviously related to UWBKI vs. FDIC is the only viable reason.
This arrangement may be viewed as confidential in nature, since it is never spelled out in the BK filings.

Additionally, when UWBI successfully used IRS Code Sec. 7507 to avoid taxes on income, it became obvious that funds were diverted from depositors with priority claims greater than the bank holding company (see IRS Code Sec. 7507 enclosed here). Recovered depositor funds are not taxable, even though they did not go to those individuals but rather a bank holding company. More proof of an arrangement as no explanation of settlement exists in the BK7.

Lastly, and by way of example, once such an arrangement has been shown to exist, we can use a similar sized bank seizure and agreement as an estimate of UWBI recoveries....on the conservative side.

Meritor Bank (deposits of $2.4B vs. UWBI $2.3B), was wrongfully seized in 1992, and fought the FDIC until an eventual payout in 2011 of $276 Million. This amount would represent approximately $10 per share to UWBI if applied to our situation.

This is a very brief value presentation for UWBI, with many other issues of income not discussed.
Thank you