"zero chance Judge Sleet will rule in JPM or FDIC's favor"
From marymbobh on Yahoo:
"Judge Walrath denied the JPM and FDIC motions to stay or dismiss the adversary proceedings. Basically, JPM and the FDIC are now desperately trying to get Judge Sleet in U. S. District Court to override Judge Walrath in Bankruptcy Court. There's a fundamental issue at stake here. The FDIC was appointed to be the receiver of WaMu bank assets which they immediately sold to JPM. Now Judge Walrath is going to determine in Bankruptcy Court what the assets of the WAMUQ estate are and has refused to stay the related adversary proceedings. The problem for the FDIC is that they apparently "sold" some assets to JPM that were actually assets of WAMUQ and therefore not subject to the FDIC's receivership. The FDIC didn't make any effort to determine if assets belonged to WAMUQ or WaMu and now the bankruptcy court is going to make the determination for them. Any assets that can be shown to belong to the WAMUQ estate (such as the $4 billion) were fraudulently conveyed to JPM and will be ordered to be returned by the bankruptcy court. This is standard procedure in bankruptcy cases. Interestingly, there was an asset schedule referenced in the Purchase and Sale Agreement but it was omitted from the final document (the 'scrivenor's error). Obviously, JPM and the FDIC don't want that to happen. JPM wants to hang on to as much of their booty as possible and the FDIC wants to avoid an embarrassing recovery of what they 'sold' to JPM as well as establish some sort of precedent that FDIC actions should never be subject to bankruptcy court review. As you might have heard Mr. Marsal (CEO of Lehman) state in his CNBC interview recently, there is essentially no due process at present. So the fundamental issue is 'Does the FDIC have to account to the bankruptcy court for the actions they have taken with respect to assets of the debtor's estate or are they shielded by FIRREA?' Judge Walrath is on VERY solid ground here. Even if the FDIC (and JPM) were to somehow obtain a favorable ruling from Judge Sleet, such a ruling would ultimately be found to be unconstitutional. However, there is essentially zero chance that Judge Sleet will rule in JPM or the FDIC's favor. The proceedings in bankruptcy court will not be affected by this and will continue unabated so this is just a sideshow that represents a desperate effort by JPM and the FDIC to avoid judgment. The worst thing about this is that the FDIC is participating because it shows just how compromised they have become and it is embarassing to the United States."
