MY THOUGHTS -- SEE BELOW
That's not entirely accurate. The parties were very much afraid of the examiner - they simply moved to "Plan B" and sought to minimize the scope of the examiner's investigation as well as the timeframe through which the examiner could conduct his or her investigation. The reasons they moved to a "Plan B" are pretty obvious. They were well aware of the fact that the EC demonstrated more than enough cause for the appointment of an examiner - so arguing against it would have been a complete waste of time. The attempt to minimize the examiner's scope was made in effort to reduce their exposure to liability. If they could get away with a narrow investigation, the appointment of an examiner could still prove to be significantly cheaper for JPM/FDIC than a very expensive settlement (as the EC is probably demanding). Moreover, by limiting the timeframe of the investigation, the parties can use various tactics to delay the investigation while moving forward with the sham settlement and DS/POR that they're so vigilantly trying to confirm.
Judge Walrath clearly decimated their "Plan B" by allowing a virtually unlimited scope of investigation - including an assesment of the settlement, asset valuation and potential claims against JPM/FDIC - and expanded on the narrow timeframe put forward by our adversaries while clearly stating that the settlement and DS/POR would not be confirmed without the examiner's report. If this isn't enough for everyone to digest, they should be made aware of the fact that Judge Walrath was well within her discretion and jurisdiction to direct the UST to appoint an examiner - and her decision is not appealable. Accordingly, our adversaries have exhausted all of their options and must now weigh the cost of further exposure by the examiner against the cost of a true global settlement that includes equity. Time is not on their side either because based on the timeframe set forth by the court, Judge Walrath wants this resolved expeditiously.
Now we must hope that the UST appoints the best examiner possible. I wouldn't be surprised to find JPM try to buy him or her off in the same way they bought off Rosen and the WMI board. The UST has my utmost confidence - as does Susman, Nelson, Willingham and the EC.
