Mr Cooper Group Inc (COOP)

[rramirez82]

Calling all newbies -- I referenced an excellent summary posted by Marymbobh on Yahoo! for you to get up to speed on the general matters here.

Don't Get Lost in the Details

All of the pleadings, briefs, arguments, counterclaims, and sundry legal actions can cover up the simple facts of the case. WAMUQ (not WaMu) became insolvent when the OTS seized its subsidiary WaMu bank, cutting off its major income source, leaving WAMUQ unable to service its obligations, particularly its $7 billion in bonds. The OTS named FDIC as receiver of WaMu bank, whereupon the FDIC immediately sold the assets to JPM. However, prior to the sale, the FDIC made no attempt to determine which assets belonged to WAMUQ and which assets belonged to WaMu and the asset schedule in the Purchase and Sale agreement was omitted, although referenced. WAMUQ subsequently filed for bankruptcy and has filed an adversary action against JPM requesting that JPM turn over the $4 billion in cash held in a formerly WaMu and now JPM account. All parties agree that the account owner is WAMUQ. Under bankruptcy law, the bankruptcy court has exclusive jurisdiction to determine which assets belong to the bankrupt estate. If the $4 billion bank acount is determined by the court to belong to the estate, then adjudication of claims to the money contained in the account also must be through the bankruptcy court.

JPM has repeatedly attempted to claim that the central issue is that FIRREA prevents the bankruptcy court from having jurisdiction over challenges to the FDIC sale of assets...which is false. The issue for the bankruptcy court is to determine what the assets of the WAMUQ estate are and distribute those to the rightful creditors. If the assets are the property of the WAMUQ estate, then the FDIC did not have any title to convey them to JPM, JPM has no legitimate title to them, and the application of FIRREA to claims against those assets has no relevance in bankruptcy court or anywhere else. It is not WAMUQ or the bankruptcy courts problem if the FDIC didn't attempt to establish and enumerate exactly what it was 'selling' and it is solely JPM's problem if it paid for something that the FDIC had no right to sell. In the absence of any such enumeration, the presumption by JPM and the FDIC would and should have been that only assets belonging to WaMu bank were conveyed.

JPM is also apparently appealing the Rule 2004 discovery order through a twisted, convoluted theory in which the bankruptcy court lacks jurisdiction over the WAMUQ estate since the estate allegedly includes claims against assets that the FDIC conveyed to JPM and claims against those assets are barred by FIRREA. Under JPM's strange theory, bank holding companies would be prevented from ever seeking protection in bankruptcy court and any asset held by any such holding company would effectively always belong to the bank(s) owned by the holding company.

The bottom line is that JPM's arguments regarding FIRREA have been heard and decided. They were extremely weak to begin with and they have not aged well. JPM's appeal and leave to appeal will be ignored and they will be answerable to Judge Walrath for their failure to produce what was requested in the discovery order.

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=86316&tid=209345&mid=209345&tof=5&frt=2