Mr Cooper Group Inc (COOP)

[JohnnyWinter]

The Fat Lady is singing her heart out.


Here are just a few findings from the independent Examiner's report, the same examiner that the EC wanted.

All of the points raised by the conspiracy theorists have been laid to rest by the Examiner's report. Keep in mind that the following quotes are just SOME of the many findings of the court-appointed examiner.


"Analysis of Tax Refund Issues


(page 136 - top of page 148 of the Report, page 145-147 addresses the impacts of the often mis-understood tax-sharing agreement as it relates to receivership law)



Like I said many times, quite a while ago, WMI is getting more under the GSA than they would otherwise be entitled to, and it appears as though the Examiner agrees.


quote from the top of page 148 of the report:

"Thus, with respect to the issue of the Tax Refunds, the Settlement Agreement appears to provide a greater benefit for the Estates than could likely be achieved in protracted and uncertain litigation.""


from page 179-180....

"Effect of Avoiding Downstream Contribution
If the Conditional Exchange is deemed to have occurred, the TRUPS Holders will be
preferred shareholders ofWMI. As such, their claims and interests will be subordinate to the
allowed claims of unsecured creditors in this Bankruptcy Case. The Investors likely will not be
"in the money" if the Downstream Contribution is set aside because the increase in the assets of
the WMI Bankruptcy Estate will be coupled with corresponding increases in the amount of
creditor claims which would be asserted against the Estates.
As set forth above, if the Downstream Contribution is avoided, it may create a
corresponding claim from the FDIC pursuant to Section 365(0) or 507(a)(9). The FDIC has a substantial legal and factual basis to argue that it should be allowed a claim in the same amount
ofthe TRUPS, thus offsetting any net gain to the Estates. At a minimum, there is a substantial
litigation risk that if the Downstream Contribution is avoided, a corresponding claim for the
value of the TRUPS will be allowed and will have priority over the interests ofthe TRUPS
Holders. 653"

from page 186...


"1. Capital Contributions
The Examiner investigated the transfer of $6.5 billion in capital contributions from WMI
to WMB from December 2007 to September 2008 (the "Capital Contributions"). Pursuant to the
Settlement Agreement, the Debtors release all claims related to the Capital Contributions. The
Examiner considered whether the Capital Contributions are avoidable and, if so, from whom
they are recoverable and the consequences to the Estates of avoiding such transfers.
The Examiner concludes that it is likely both WMI and WMB were solvent at the time
that most, if not all, of the Capital Contributions were transferred to WMB. To the extent that
WMI and WMB were insolvent when the Capital Contributions were made, the Capital
Contributions could be avoidable as constructive fraudulent transfers. However, if the Capital
Contributions were avoided, there is a substantial risk that the Estates would receive only a claim
in the Receivership for the value of the Capital Contributions. That claim likely far exceeds the
amount ofthe Receivership's known assets. Based upon the limited information which the
Examiner was able to obtain regarding the assets of the Receivership, it is difficult to determine
whether there would be any cash recovery to WMI even if a claim was allowed for the avoidance
of the Capital Contributions.654 Recovering the Capital Contributions from JPMC as a
subsequent transferee would also be difficult. Moreover, the avoidance and recovery of the
Capital Contributions may cause the FDIC and JPMC to have significant claims against the
Estates. Accordingly, even ifWMI were successful in establishing the elements to avoid the
Capital Contributions, any cash recovery to WMI is remote."


from page 199-200....

7. Potential Claims Against the Estates Resulting from Recovery of the
Capital Contributions
To succeed in recovering the Capital Contributions as fraudulent transfers, the Debtors
would have to prove that both WMI and WMB were insolvent at all relevant times. There is
tension between WMI's business tort claims against JPMC and WMI's avoidance action claims,
in that establishing WMI and WMB's insolvency at various points in time could significantly
undennine the viability of any potential business tort claims because an insolvent WMI is
unlikely to have suffered significant damages.
Further, establishing WMB's insolvency could also subject the Estates to significant
avoidance claims by creditors of WMB, including the Bank Bondholders. Prior to the imposition
of the Receivership, WMI received billions of dollars of transfers from WMB in the fonn of cash
dividends695 and certain tax payments. If it were proven that WMB was insolvent at the time
these payments were made, these payments, like the Capital Contributions from WMI to WMB,
could be subject to avoidance as either fraudulent transfers or preferences, thereby increasing the
potentI.a I cIa l.m s agam. st t h esEt ates. 696
"

"8. Conclusions
Even if the Debtors were able to establish the elements of a constructive fraudulent
transfer, the Debtors are unlikely to obtain meaningful recovery for their Estates on account
of these claims. The best outcome for the Debtors with respect to the FDIC is likely a claim in the Receivership, where the claims that have already been asserted far exceed the amount of
the Receivership's known assets. Indeed, the Estates' claim in the Receivership may be a
subordinated claim. Further, it will be difficult to establish a basis on which to recover the
transfers from JPMC. Given the risk that the Debtors will not prevail in establishing that the
Capital Contributions were fraudulent transfers, the recoverability issues that would arise even if
the Debtors did prevail, the significant claims that would likely be asserted against the Estates as
a result of successful avoidance, and the costs associated with litigating these claims, the
Debtors' avoidance actions with respect to the Capital Contributions do not represent significant
claims that are being compromised under the Settlement Agreement."

695 In its counterclaims in the WMI Action, the FDIC has asserted avoidance claims against WMI for upstream
dividends from WMB in the amount of at least $10.5 billion.

from page 200...

"Given the risk that the debtors will not prevail in establishing that the Capital Contributions were fraudulent transfers, the recoverability issues that would arise even if the Debtors did prevail, the significant claims that would likely be asserted against the Estates as a result of successful avoidance, and the costs associated with litigating these claims, the Debtors' avoidance actions with respect to the Capital Contributions do not represent significant claims that are being compromised under the Settlement Agreement."





"There is no indication, however, that lPMC provided false information to regulators or
ratings agencies as that concept is understood for purposes of this tort.928 The slide deck shown
to regulators was the same deck that lPMC management presented to its own Board to evaluate a
potential acquisition of WMI -- there is no indication it contained false information. Indeed,
other bidders who did due diligence independently came to the same conclusion about WMI's
loss projections being in the $30 billion range.929 There also is no indication that lPMC falsified
the internal WMI information and projections that it presented. lPMC obtained this information
from WMI as part of its due diligence process. Similarly, the information given to ratings

agencies -- the possibility of a receivership transaction for WMB -- was not false. In sum, there
is no indication that JPMC made false statements about WMI.
The Examiner also believes there would be significant difficulty in showing that JPMC
acted with malice or intent to injure WMI. The Examiner finds that JPMC's meetings with
regulators and ratings agencies were done for legitimate business purposes. Witnesses from the
regulators said that it would be normal for a third party interested in an acquisition to meet with
them in advance to discuss possible implications.93o Similarly, the ratings agencies indicated that
it would not be uncommon for someone in JPMC's situation to reach out to the agencies to
determine what impact an acquisition would have on its ratings. Consistent with this, JPMC
witnesses stated that the purpose of these meetings was to obtain the regulators' and ratings
agencies' reaction to a possible transaction and the impact on JPMC before moving too far
forward. 93 1
In addition to JPMC discussions with regulators and ratings agencies, there also was one
incident of a JPMC branch manager in the summer of 2008 telling customers that WMB was
going out ofbusiness.932 There was no evidence to suggest this isolated incident was part of a
coordinated or malicious attempt by JPMC to disparage WMI.
The Examiner also did not find evidence that JPMC maliciously placed former JPMC
executive vice president, Stephen J. Rotella, or others, as "insiders" at WMI to gather
information. 933 The Examiner found no evidence that Mr. Rotella or any other former JPMC
employee provided JPMC with WMI confidential information or that JPMC obtained internal
WMI information outside of the due diligence process.
Finally, the Examiner finds that none of the alleged disparaging acts caused "special
damages" as required under a trade libel theory. There are also procedural obstacles to a trade
libel theory. 934"

page 243-245


"No specific information suggests that JPMC had discussions with companies other than
Santander or CCB about WMI. There has been speculation, however, that the lack of bidding
interest from parties other than JPMC demonstrates the existence of a broader conspiracy not to
purchase WMI.940 In light of this speculation, the Examiner investigated whether other possible
bidders for WMI also may have conspired with JPMC. Indeed, as a matter of alleging a
plausible bid-rigging scheme under the antitrust laws, a conspiracy to suppress the bidding on
WMI might only be successful if all of the potential bidders reached a common agreement, not just some smaller groUp.94I The other most interested bidders for WMI and WMB included,
inter alia, Citigroup, TD Bank, Wells Fargo, Blackstone, and the Carlyle Group.942"

page 247-248




"After conducting due diligence, Santander had substantial concerns about WMI's
assets. 979 Santander estimated WMB' s loan losses at approximately $26 to $32 billion. 980
Santander management was unwilling to take on these risks outright and considered an
acquisition ofWMI only if the FDIC would guarantee that Santander's losses would be capped
at $26 billion.981 Mr. Sanchez indicated that even if the FDIC would have agreed with capping
losses at $26 billion, Santander still would have needed to raise $10 billion in capital to support
WMI's assets because WMI had no remaining equity. 982"

page 253


"The Examiner found no evidence, however, that any suitor would have paid more than $1.88 billion for any select assets of WMB. In any event, the Examiner found no evidence to suggest that the "bad assets" of WMB -- its troubled loan portfolio-- could have been sold separately from the "good assets" at any price. Accordingly, the Examiner concludes there is no factual support for the allegation that the FDIC receiver could have realized more from WMB's assets in a "liquidation". "


(bottom of page 313 and top of page 314 of the report)


The Examiner concludes that there are substantial legal impediments make recovery on a tortious interference agains the FDIC highly unlikely, and, further, the Examiner did not discover FACTS sufficient to form the basis of such a claim."

(page 323 of the report)



Here is an OCR'd version of the Examiner's report.

http://www.ghostofwamu.com/documents/08-12229/08-12229-5735.pdf