Biz: It's like this.
1. How does the FDIC settle this lawsuit w/o branding itself as a government entity that exercised too much control and bad decision making in the seizure and subsequent sale of WAMU? They can't, the information to find out how this all went down is now public, so the FDIC hires a heavyweight lawyer from the FED to come in and clean up their mess with a new 500B congressional appropriation.
A. Mike has to get the WAMU suit settled with the shareholders of WMI. The only way too do this is through a cash settlement with them.
B. JPM is now being sued by WMI shareholders for Fraud and Breach of Confidentiality, UH-OH that's a new One!
C. Save both the FDIC and JPM from this nightmare that is looming on the horizon..
Solution...
FDIC will settle the lawsuit with JPM after JPM buys the Lawsuit, when they purchase WMI. JPM will purchase WMI in a 1:3 stock swap. When WMI was bid Sept (stock price was $8.78 PP) (Value was determined at $11.72 PPS) If JPM converts all the outstanding shares of WMI they only need to issue 600M shares. This is a drop in the bucket to them (18% of O/S). JPM will purchase all the P'S K'S and H's for face value.. I.e. about 5B
3. Once the lawsuit is now in JPM's control they have the right to cancel it and let the FDIC off the hook,[let's just move on] or they have the right to continue the FDIC lawsuit and reap the rewards of the impending settlement with the FDIC. This is probably already been worked out.
How it will occur in order:
1. JPM has purchased all assets of WMI for a total of ___B, Jamie Dimon of JPM stated in a press release that JPM did not get the assets they needed in Sept to adequately help the bank with all their business needs, so we purchased the holding company for the benefit of our shareholders (boom both fraud lawsuits settled). BK of WMI will be worked out in Judge's chambers (if it is still active).
2. Then JPM makes sure lawyers delay hearings in lawsuit against FDIC, to let public interest wain. Once the lawsuit is out of the public eye, book under the table settlement with FDIC, giving JPM all the money back they paid for the Preferreds and a little extra for attorney fees. BAM it's all over, and FDIC has learned a new lesson. And all the officials are out of trouble and our system moves on!
Meanwhile back in JPM common shareholder land, the converted shares have a 90 day restriction on them , so we can't sell out the stock and cause a sell-off of current shareholders of JPM. When the 90 day restriction is lifted, we might just want to sell 25% of our shares and continue holding in an evil banking empire that has the ability to help us double our money I mean $60 a share for JPM is not far off...
NOW this is all IMHO !!! Comments are welcomed the floor is yours!
