"The $50 purchase price of each unit was allocated between the preferred security and the warrant comprising such unit in proportion to their respective fair market values at the time of issue. At the time of issuance, the fair market value of each preferred security was $32.33 and the fair market value of each warrant was $17.67. Such position generally will be binding on each beneficial owner of a unit (but not on the Internal Revenue Service). See "Material United States Federal Income Tax Consequences—Allocation of Purchase Price of the Units" in this prospectus."
EDIT: Looks like they are worth $33.29 plus/minus a couple of bucks, assuming float is 23 Million and "OID".
789,353,506.51 (settlement amount) - 23,679,306.88 (amount that goes to WMI) = 765,674,199.63 (divided by 23 m float) amount available for distribution for WAHUQ
765,674,199.63/23,000,000 = $33.29 <---- Off by a penny.
As for conversion, there has been no conversion.
The Trust is still existing and still holds the bonds. No distribution has been made.
YOU SAID: I don't see how the holders here are better off than they were before other than our claim has been adjusted higher.
Actually, the claim was adjusted lower (I was disappointed, but still decent). WAHUQ should have gotten $50 per unit plus cumulative dividends/interest per the prospectus, case precedence: "When debt is issued at a discount, the issuer receives less than the face amount of the debt at issuance, but owes the face amount at maturity. The difference between the face amount and the money received is known as original issue discount (OID), which amortizes over the life of the debt. Because the amortization resembles interest accrual, courts have held that OID constitutes interest for purposes of treatment under the Bankruptcy Code."
As far as being paid, it has a very high probability it will be paid. Washington Mutual is only off by a billion'ish to match liabilities (so long as the $4 billion pending turnover action is won). Have NOL tax refunds makes WAHUQ more than whole. Plus WMI is awaiting the unwinding of 7 or 8 Rabbi Trusts, which will WMI more money in its coffers.
12,926,405 JULY 13, 2001 10,073,595 AUGUST 31, 2001 23,000,000 Total (Adds up to exactly the authorized amount)
According to Mikepgators (?), he states that someone contacted the Trustee and said the float was approx. 14/15 million. (I am not doubting him).
The reason why I believe there is 23 million shares is because the original amount of the Claim was, I believe, $1,150,000,000. $1,150,000,000/23,000,000 = $50 per share. Trustee failed to assert Accreted Value. Factor in Case Law, you come out with:
789,353,506.51 - 23,679,306.88 = 765,674,199.63 amount available for distribution for WAHUQ
765,674,199.63/23,000,000 = $33.29 per share for distribution (interest included)
In bankruptcy, the allowance of a creditor's claim is governed by section 502 of the Bankruptcy Code, which provides that the allowed amount of a claim should be determined as of the date the bankruptcy case is commenced. Consistent with this rule, claims for unmatured interest are disallowed. 11 U.S.C. Section 502(b)(2). The Bankruptcy Code does not define unmatured interest; however, courts have explained that interest is unmatured when it has not been earned as of the petition date. In re U.S. Lines, Inc., 199 B.R. 476, 481 (Bankr. S.D.N.Y. 1996). Accordingly, as a general rule, creditors are not entitled to interest that has not accrued as of the petition date. Prior to Solutia, this rule had been applied to unsecured debt issued at a discount.
When debt is issued at a discount, the issuer receives less than the face amount of the debt at issuance, but owes the face amount at maturity. The difference between the face amount and the money received is known as original issue discount (OID), which amortizes over the life of the debt. Because the amortization resembles interest accrual, courts have held that OID constitutes interest for purposes of treatment under the Bankruptcy Code.
As such, in 1992, the Second Circuit ruled in In re Chateaugay Corp., 961 F.2d 378 (2d Cir. 1992), that an unsecured creditor's claim for OID that remained unamortized as of the petition date must be disallowed as Òunmatured interestÓ pursuant to section 502(b)(2) of the Bankruptcy Code.
The legislative history of section 502(b)(2) of the Bankruptcy Code supports this holding, using unamortized OID to illustrate the section's operation: "a claim on a $1,000 note issued the day before bankruptcy would only be allowed to the extent of the cash actually advanced. If the original discount was 10 percent so that the cash advanced was only $900, then notwithstanding the face amount of [the] note, only $900 would be allowed." See H. Rep. No. 595, 95th Cong., 1st Sess. 352-53 (1977), reprinted in 1978 U.S.C.C.A.N. 5787, 5963, 6308-09. The legislative history adds that to the extent OID has amortized prior to the petition date, "the interest component of the note would have to be pro-rated" to disallow the unaccrued portion of interest.".
For informational purposes ONLY. Do NOT trade on this information.These posts of mine are from 2009, BEFORE insider trading became (going to be per the Opinion) an issue and federal judgment rate became the prevailing rate of the soon to be confirmed Plan of reorganization. IMO
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