Hestheman –
It sounds like you are agreeing with most of my assessment but I will comment further using your post as points of interest that arise on the board throughout each week.
Your post makes sense, but even if there is no fraudulent conveyance,
The term ‘Fraudulent Conveyance’ is of high interest to board members, and as far as I can tell, members usually refer to it in the line of thought that the FDIC fraudulently conveyed Washington Mutual Bank (WMB) to JPM. In my opinion, this charge will wear well in court, but our Chapter 11 BK is not where WMI will test that charge. In general, a bankruptcy case will consider the term ‘Fraudulent Conveyance’ as an act that was perpetrated by the debtors (our BOD) to hide assets from our creditors to avoid paying them. When a party in a BK (usually creditors) discovers ‘Fraudulent Conveyance’, the UST will usually file that charge against the debtor. In fact, the exact opposite is currently true. The debtors (our BOD or WMI) have filed the concept of this charge in the court in Washington DC, stating that FDIC sold WMB to JPM for less than fair value. The act of filing this charge in the DC court clearly indicates that the BOD is not complicit in the lowball sale of WMB. It is also clear that WMI and its attorneys know that WMB is past history and its assets will not be a part of the Chapter 11 reorganization, even though the lowball sale may be commented upon in the BK court proceedings..
when Solomen releases his numbers it will be obvious WMB was grossly underpaid for
By now, the entire interested world knows that WMB was worth more than $1.9B and that there may have been some illegal maneuvers between JPM and FDIC to sell WMB for that price. Regardless, the WMB assets will not be a part of Solomon’s valuation, and any charges brought against JPM and FDIC for their acts will not happen in BK.
Furthermore, it is common knowlege the FDIC cannot seize a holding company
I am interested in seeing more information on this issue. As far as I know, FDIC seized WMB and not WMI.
That is why the debtors want us out, so they can reorganize and seek the return of the assets of the holding company.
As I stated in a previous post, the debtors want a reorganization that leaves commons out. The reason that they have asked for various things to be returned, such as their name, is an indication that they will attempt to reenter their area of expertise, which is banking, and loans. If they cancel commons before the EC can force a new BOD, and before Solomon files a true valuation in court, they will have more liquidity to do this. They will have even more when the majority of claims are redirected by the court to JPM (WMB).
That is why Rosen is so hell bent on making sure A<L even if it means giving tax returns/NOLs to JPM or the FDIC.
I am not a champion of Rosen and crew, but we should remember that they work within the rules of BK and do what our BOD tells them to do. They do not make this up as they go along just to benefit themselves. Their pay will be the same no matter how the BK is resolved.
They ultimately want the value of the holding company.
In my opinion, this is of low priority with JPM. Even if WMI gave it to them, they would dissolve it into their already substantial framework of management. Keep in mind, WMI has made no charges against JPM or FDIC in the BK except those that concern WMI assets. The only agreement that these three parties are considering is the cash they simultaneously claim as their own. Of course, we expect the EC and Solomon to slow that down soon.
No one has to agree with my assessment. It will play out as the BK continues. Anyone wishing me to admit I was wrong simply needs to remind me when it happens.
In my opinion, the single most important thing that is pending in our BK is the valuation by Solomon. If a POR (current or similar) is accepted by the court before the valuation, commons are doomed, and if the valuation does not show a reasonable value of WMI after the debt is satisfied, commons are still doomed.
I found it interesting that the Creditor’s Committee filed their pseudo objection to Solomon before their approval by the court was made public.
IMO EOM
