Dime Bancorp Inc (fka DIMEQ)

[Bluzie2]

The gross up was awarded as part of the court of claims ruling. It's not customary, but Wamu argued that if it had to pay taxes on the award back to the government, effectively the award would be reduced. So the court awarded the gross-up, which was upheld on appeals. Right now, I believe the parties are fighting over how the gross-up is to be computed, but that should not affect us, for the simple reason that WAMU is already in breach of the warrant agreement (by virtue of the fact that it assigned the litigation proceeds to JPM). Hence, the bankruptcy court should simply "zero out" the deduction for taxes, which it part of the reason why most of us think the value per LTW is > 2.00.

There is also statutory interest dating to the date of the breach, plus interest due and owing on the Anchor litigation itself while the parties bicker over finalizing the ruling (first on appeal and now again at the Court of Claims level). Ironically enough, because the original ruling was upheld at the appellate level (and not appealed to S. Court, by the way), the government is definitely on the hook for the entire amount of the original award, plus interest accruing from the date of the original ruling until present.

For what it's worth, the interest the government must pay to Wamu (Anchor), should be computed as follows:

28 U.S.C. 1961
Interest shall be allowed on any money judgment in a civil case recovered in a district court. Execution therefor may be levied by the marshal, in any case where, by the law of the State in which such court is held, execution may be levied for interest on judgments recovered in the courts of the State. Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment.

Remember that if it's determined WAMU breached the LTW agreement, we get interest per the bankruptcy court from the date of petition filing. To determine that, we'd look at the rate in the State of Washington, which is the law governing the LTW agreement. It appears that the Washington rate is 5%, fwiw, but I can't be certain.