Another important issue has just come up.
I received today via express mail notice that WMI wants to consolidate the Broadbill Adversary proceedings and WMI's 43 and 44th (new to me!!!) Omnibus Objections to the LTW claims. That is fine and all to the good.
BUT, they have combined that with the following:
1. The Omnibus Objections and the Adversary Hearings are to be consolidated, with the former the operative proceedings, and the Adversary proceedings stayed pending the resolution of the Omnibus Objections.
2. The combined Omnibus Objections currently scheduled for a hearing on July 20th 10:30 AM are to be continued to SEPTEMBER 7, 2010.
This is bad news for DIME LTW holders, in my layman's opinion. We need a resolution of WMI's omnibus objections to our claims as quickly as possible, because the longer we wait, the closer WMI gets to the confirmation stage of its Plan of Organization. If we get to the POR stage with the treatment of the LTW's remaining as a Class 20, it becomes infinitely more difficult to stop the roller-coaster, and a clam-down of the settlement terms on us becomes very likely.
On the other hand, if we can get the false arguments raised by WMI in its omnibus objections ruled as invalid by the Court, the POR will have to be revised to accord the LTWs the proper priority.
WMI's current management are engaged in a gigantic game of DELAY: (1) delay in getting the courts to decide on whether WMI shareholders can hold an annual meeting; (2) delay in getting the Bankruptcy court to consider whether an examiner should be appointed; (3) delay in getting the substantive issue of whether the DIME LTW agreement should be honored by WMI.
These delays play in their favor - they have a so-called Global Settlement in place which all the parties at risk (JPM Chase, the FDIC, and the current WMI BOD) are given global releases against litigation, and a proposed POR that substantially benefits the unsecured current creditors and "screws up" a substantial number of other parties (including the LTW holders). But the WMI estate is running up a bill of $30M per month in interest charges on the unpaid debt, so at some point, the pressure on the Bankruptcy Court to pull the plug on the show and allow the proposed settlement to be "clamped down" on the dissenting parties will become unbearable. This is what WMI's attorneys are apparently counting on.
Dime LTW holders need to find a way to avoid falling into this trap. Maybe asking the court to rule on the merits of the Omnibus Objections and the responses filed in rebuttal independent of the Broadbill adversary proceedings may be the way to go. But I defer to the superior legal knowledge of the attorneys who are advising Broadbill Investment Corp, Nantahala Capital Partners, and Blackwell partners.
Knixx99
