WMI posted new proposals with the Bankruptcy Court to give WAMU secured holders a greater share of distribution in exchange for JPM getting 80 of the tax loss benefits in the BK bank.
I have not seen anyone recalculate the payout on DIMEQ as adjusted for the tax "CREDIT" that is due on distribution calculations.
i.e. on the original distribution calculation, the FDIC was to pay the bank the court award $363 Mil.to WAMU bank. The bank was to deduct it's share of the take, then the lawyers were to get theirs, then the remainder was to be "adjusted for income tax". This meant that there was to be an additional deduction from proceeds to account for the fact that the CONDUIT ENTITY (Wamu) was liable to pay tax on the total settlement amount and the DIMEQ (holders of the rights to the proceeds from the lawsuit) had to reduce their net as a result.
A funny thing happened on the way to BK Court. Wamu has a TAX CREDIT coming to it, therefore the "tax adjustment" is either negated or better still, becomes a credit to DIMEQ and therefore has to be added to the net proceeds from the lawsuit.
Any comments?
