Under the current Plan construct, DIMEQ and WAMUQ will share some relative percentage of the 30% stake in Newco that has been set aside for common equity interests. What is interesting here is that in the event DIMEQ is deemed to be something other than equity then wouldn’t WAMUQ then own the entire 30% stake in Newco? Might this be why the Debtors inserted language allowing the Court to assign some other percentage distribution of the Newco interests among the entire body of the equity constituency as the Court sees fit? It seems that, absent any adjustments to the Plan, a DIMEQ victory would actually improve the Newco ownership percentage for WAMUQ holders. As such, WAMUQ holders are now incentivized to see DIMEQ end up as debt rather than equity. What a DIMEQ victory would seem to impact is the amount of cash that would ultimately flow into the Liquidating Trust from the waterfall. Where WAMUQ and DIMEQ would be at odds with one another would seem to be in a scenario where DIMEQ is found to be equity. And I won't even dare reopen the DIMEQ/WAHUQ debate again at this point. So many possibilities, so little time, so much riding on one factfinders opinion...
Who would have thought a year or so ago that the LTW Adversary Proceeding would eventually play such a meaningful part in the WAMU saga?
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