All these motions to disband the EC are flawed by one key argument. They all talk about the potential claims againsts the Debtors that can't be overcome by assets. Everyone needs to keep in mind that there wouldn't be any claims had WAMU not been fraudently siezed by JPM/FDIC.
There have been many posts about the current Assets vs. Liabilities and the MOR's. One thing to keep in mind is the value at the time of siezure. That value remains constant and the single most important aspect to this whole mess. Here's an analogy to consider:
If a thief steals a brand new lexus off the dealer's lot. Recklessly crashes into 7 other vehicles, kills 3 people in the process and ultimately destroys the stolen lexus. I honestly believe that any court in existence would award damages to the dealership in the amount, not less than, the full value of the car at the time it was stolen, not it's current value. Furthermore, all the additional claims associated with the theft will be the responsibility of the thief, not the owner of the car.
If you steal anything- a car, a tv, a work of art, a BANK, and while in your posession it loses value, or causes loss of value to others, when you get caught, you'd better be prepared to pay full value for the item, plus damages to anyone else who suffered as a result.
The disbandment arguments hold no water because the "claims against the debtors" only exist due to a loss in monetary value by bondholders, noteholders, etc. If a settlement is reached, the monetary value will return, thus eliminating the majority of claims that they argue will still be owed. (hard to continue with a claim when you don't incur a loss) Furthermore, ask yourself who caused the loss of value, WMI or JPM/FDIC? I think you know the answer to that one. They(JPM/FDIC) will be the liable parties for the claims. For this reason, a global settlement may be the only logical solution to this entire debacle.
IMO, it is likely that JPM is willing to pay the piper, but the FDIC is the holdup. The FDIC should realize by now that they were the ones mostly at fault by acting hastily to "protect the coffers". They will have to front a large chunk of the settlement. But how are they going to explain it to the American people? The FDIC must feel like they are standing on the 50 yard line, at the superbowl during halftime, with thier pants around thier ankles, and all of America watching. I have no simpathy for Ms. Bair. Getting in bed with JPM was dumb. I'f you're gonna be dumb, you'd better be tough. Times up Ms. Bair.... Settle this danmn thing before the only ones that get anything at all, are the lawyers!!!
GLT everyone,
Byrd
AI
