Here is another example how I see the BONDS are technically PAID In FULL
You cannot pay equity before bonds as we can see the different tranches.
Bonds MUST be paid before equity class 19 and 22
So when Brian Rosen was establishing the furthest the windfall would reach they had a few questions to determine. 1st is this a truly chapter 7 bankruptcy with just enough assets to spread around or is this a chapter 12. Which all depends if there is sufficient assets to reorganize. But remember bonds need to be paid before equity. A chapter 12 means reorganized and that implies equity is paid. But we gotta remember. Bonds get paid before equity
Bonds had to get paid if equity existed class 19 and 22. That is a must!
This is were project eclipse comes into play in the future
2nd to just throw away a potential mega conglomerate is just plain foolish. Both ways would pay bonds but in order to do that leverage was needed.
Brian had to figure out a way to pay bonds and justify why equity exist and receiving shares in WMIH
For equity to have reorganized AND RECEIVE SHARES IMPLIES BONDS WERE MADE WHOLE.
So if you follow the tranches what must come first? Bonds before equity.
So bonds are technically guaranteed paid. That is IMO the only way we reorganized and got shares.
We should have not received ANYTHING before bonds period!
But we did.
We received a reorganized company (WMIH) AND a negotiated percentage.
This implies again that we technically got paid FIRST!
BUT I SAY WE DIDN'T!!!
I Believe Bonds technically are guaranteed paid in full.
Why do I say guaranteed paid in full?
Because we cannot receive anything until junior Subordinate classes are paid FIRST.
So because we got paid something (shares of WMIH) that means Junior Subordinate claims were technically paid in full. Meaning Bonds are guaranteed paid in full.
We all know they can put a hold on things (Administrative hold) But you CANT pay tranche 4 before tranche 3.
Can't put the horse before the carriage
So it would have been a waste to just chapter 7 this and divided everything up.
The potential mega conglomerate with nols AND a mega BOND (as RoyalDude puts it) was a leveraging powerhouse! (Project eclipse)
So Brian Rosen had a obvious choice. Safe harbor the assets as leverage guaranteeing the Bonds and give equity shares from WMIH technically not violating the payout matrix and when this job is done then and only then BONDS will be paid in full and equity will receive its pay out.
Wether it's LTI'S, Cash or shares I do not know.
This is the only explanation that we EQUITY receive something before bonds.
We should have never got anything FIRST!
So a chapter 7 should have paid bonds FIRST and then anything left over to us equity.
A chapter 12 should still force bonds to be paid FIRST but there is no law guaranteeing the bonds in full AND putting an administrative Hold on the bond. Thus giving equity class 19 and 22 shares BEFORE THE BONDS because wmi reorganized.
This brings me to the conclusion that we must be in the money because the WINDFALL ALREADY REACHED EQUITY.
The moment the windfall reached equity is the moment we received shares in WMIH
Brian didn't want to throw this amazing bankruptcy away. This had potential.
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