Mr Cooper Group Inc (COOP)

[Joshfm]

Great post from the Y board:

Perfect Catch 22

Keep it in simple terms. Rosen as the sole representative of WMI equity prior to EC formation removed us from the D.C. court along with WMI bondholders. Why cause he was going to kill equity and WMI bondholders who he is primarily working for were going to make out like bandits. The proposed POR attempted to funnel a small amount 37 to 50 cents on the dollar to the WMB bondholders via WMI tax refund to FDIC. WMB bondholders did not accept this. Now WMB has made the argument that WMI did not accurately portray financial status at purchase time = fraud. Judge Mary has responded with two key points (1) Who owns the bonds both WMB and WMI and when did they buy them and (2) You have the right to pursue those fraud claims if the FDIC does not.
The impact is simple whether it is WMI or WMB bonds as to time of purchase. If you are an original pre-seizure holder this is good news as you can show the entire loss and might have a case. If you bought post-seizure you do not have a case and will not see the pennies to dollars profits you were looking at before. Secondly those holding WMI bonds and WMB bonds will be exposed indicating who is really behind the POR. Finally to pursue the fraud angle there are two key points (1) If fraud is proven WMI BOD and executives are in the position of facing criminal charges and (2) to defend themselves from this fraud charge they must show valuation which will uncover the true assets of the holding company and the bank which will put FDIC in hot water for seizure and possibly bring to light the evil behind-scenes actions from JPM. Thus the Triple Entente is broken apart as each has to look out for their own skins.
The impact to equity is an indirect positive in that unless WMB bondholders are taken care of the fraud argument to include valuation will be brought forward. At this point the only way to take care of WMB bondholders is three ways (1) FDIC - can't do it or they are admitting wrong and then equity can roll in, (2) WMI - will not do it - See yesterdays court arguments, and (3) JPM settles or buys out WMI taking care of everyone. Judge Mary put everyone in a Mexican standoff requiring three way cooperation to enable a global settlement.
Side note - NO equity friendly PR again. How about "Equity sides with WMB bondholders in requesting valuation". When will we learn to start fighting the dirty fight. WMB bondholders do not seem to have a problem getting good
press out there reference the Peg Brinkley article.

written by corcor27