Mr Cooper Group Inc fka COOP

[FORTY-8]

Coming in to the June 17th hearing …

The judge now KNOWS that Weil is not representing the interests of shareholders, and that Weil views their interests as antithetical to those of the Debtor. She probably believed this to be so back in December and decided to approve the appointment of the EC at that time. As a result of Weil’s unwillingness to share its work product with the EC the judge then received conclusive proof (in her mind at least) that her suspicions were correct. And now (most importantly) Weil KNOWS that the judge knows this to be so. All grace and pretense have been destroyed.

So what does Weil now do?

To avoid sanctions (and the very real possibility) of the intrusion of an examiner, it must, at a minimum, provide the EC with some degree of discovery and document production. It must look as though (on June 17th at least) that Weil is attempting, in good faith, to comply with the judge’s direction. If not, then all is lost (for Weil) … on June 17th.

So what does Weil do then to avoid such a calamity?

On June 17th Weil faces a self-imposed trap of sorts in the form of 1) the motion for an examiner; and 2) the 600 objections to its DS. Since the judge has strongly implied that the DS could not be approved without giving the EC the benefit of Weil’s work product, there is absolutely no way in which the DS will be approved since Weil has no intention whatsoever of turning over its work product (in this regard, listen again to the recording and note the anxiety and yes, even desperation in their voices when they were arguing the issue). Weil now knows this, and knows that the JUDGE now knows it as well. So how does Weil escape the trap that it and circumstances have constructed?

IMO …. Weil will announce to the court that it is withdrawing the DS and the POR. It loses nothing by doing so, in that no other party has a competing DS and POR that’s ready to go. It further announces that it is working feverishly to comply with the discovery requests of the EC, and THAT IT WILL, ON A DATE CERTAIN, FILE A NEW DS AND POR THAT WILL FAITHFULLY ADDRESS A LARGE SEGMENT OF THE PRIOR OBJECTIONS … AND THAT BY VIRTUE OF HAVING RECEIVED ADDITIONAL NOL MONEYS, THE NEW DS AND POR WILL INCLUDE A “NOMINAL” AMOUNT OF MONEY FOR THE HOLDER OF COMMON EQUITY. Weil will then elegantly pivot back to the point that Rosen’s has ominously made on two previous occasions, and remind the judge that the burn rate of inaction is $30 million per month.

There really is, no other way out for Weil.