Mr Cooper Group Inc (COOP)

[marayatano]

Jack, here is what the fuss is about and some answers to your questions:

As noted above, the TPS Consortium believes the diversion, to holders of
common equity, of 30% of the value of the stock of the “reorganized” Debtors
and proceeds from litigation against third parties, before the payment in full of
preferred equity holders’ liquidation preferences, to be inappropriate. Upon
information and belief, the chairman of the Equity Committee holds only the
common shares that would be benefited by the contravention of the absolute
priority rule to divert potentially-significant value away from preferred equity
holders. In considering the propriety of that distribution scheme, members of
Class 19 are entitled to know the existence and extent of the Equity Committee’s
members’ holdings of the preferred equity they have chosen to disadvantage.

TPS's allegations are that Willingham owns all commons and he is self-serving to the detriment of prefferds holders.

This 70/30 split is only proposed because the members of the EC could not agree to a fixed split. If there was an agreement, the SNH would have said, "this is the way we are going to split it" and have it a fixed, NOT proposed. The compromise is let the "vote" happen and judge make the decision. Willingham knows he is asking too much of the 30% for commons, so he has nothing to lose, but all to gain in making it a proposal. Remember, he is a business man.

Even the EC Q&A was not even confident in the 70/30 split and had to warn everyone so it would not come as a surprise when the judge rules in favor or not in favor. EC even had to word it as a "proposed" split.

This would not be a "proposal" if all EC members agreed.

A "no" votes benefits class 19, TPS, P&K, and SNH. SNH cannot say publicly they do not agree to the split, and we don't if part of the settlement is to vote "yes" or "no". It may that Willingham/SNH say "let the "vote" and judge decide" the %.

imo

The Court has already conducted lengthy valuation proceedings and determined the
“reorganized” Debtors (including their residual tax attributes) to have significant value,
which value would accrue to holders of the stock in the “reorganized” Debtors. Moreover,
the TPS Consortium believes the estate’s claims against the Third Party Litigation Targets
could result in significant additional recoveries that could otherwise be available for
distribution to Class 19 upon satisfaction of remaining claims against the Debtors (if any). In
connection with the last confirmation hearing, over the Debtors’ strenuous objection, the TPS Consortium obtained Court authority to include in the trial record excerpts from a detailed
report by the United States Senate’s Permanent Subcommittee on Investigations illustrating
the types and potential value of just some of the claims that might be brought against Third
Party Litigation Targets. For your consideration, a copy of the TPS Consortium’s submission
is attached hereto at Exhibit A.2 In sum, the diversion of 30% of the foregoing value to
subordinate classes may result in your forfeiture of significant additional recoveries.

Under Bankruptcy Code Section 1129(b)(2)(C), holders of preferred equity interests
are entitled to receive payment of their full liquidation preferences before junior classes can
receive any recovery. That entitlement (commonly known as the “absolute priority rule”) is
triggered when a class of preferred equity votes against a Plan. If, however, the class of
preferred equity votes in favor of a plan that provides for a recovery to junior classes before
payment in full of applicable liquidation preferences, the protections of the absolute priority
rule may be lost. As such, the TPS Consortium urges you to vote against the Plan to
prevent the diversion of potentially significant value to subordinate classes before you have
received payment, in full, of the liquidation preferences to which you are otherwise
entitled.

This not only about a 70/30 split of the distribution of shares of the the NEW WMI2.

This 70/30 split is also in regards to the LIQUIDATING TRUST as well. Any recovery that was going to prefferds are being reallocated to commons in the sum of 30%.

Obviously, TPS (prefferds) are not happy about that since the face value of P is $1,000, and K is $25. Unsure want REITS are.

This LIQUIDATION TRUST that no one is talking about has value, a lot of value because most of the creditors are already paid off, with the exception of a couple hundred million. Next in line is the prefferds in which they can get significantly close to face value. I am not saying they will, but substantially nearer than they are now.

This liquidation trust is on top of new WMI2 shares being distributed.

imo

Abandonment of Potentially-Valuable Estate Claims
During the July 2011 confirmation proceedings in connection with the last version of
the Plan, the Equity Committee, with the support of the TPS Consortium, achieved a
significant victory in obtaining permission to proceed with litigation against certain hedge
funds accused of engaging in illegal insider trading in securities of the Debtors (the
“Settlement Noteholders”). In the September opinion denying confirmation of the Plan, the
Court provided a lengthy discussion and analysis of potential claims against the Settlement
Noteholders, finding such claims to be “colorable” even on the limited evidence adduced
through the minimal discovery conducted by the Equity Committee to that point. Recovery
on such claims could result in significant additional value being made available to members
of Class 19 (either through affirmative recoveries from the Settlement Noteholders or through
disallowance of their claims against the Debtors (resulting in more value flowing down to
Class 19 through the recovery “water fall”)).

But, rather than pursuing that litigation (or even conducting additional discovery), the
Equity Committee appears to have acquiesced to the revised Plan’s: (a) full release of all
claims against the Settlement Noteholders (including claims you might have in your
individual capacities); and (b) a demand that the Court’s September opinion (as it applies to
potential claims against the Settlement Noteholders) be withdrawn and vacated as if the
Court had never found such claims to be colorable. In the view of the TPS Consortium, this
extraordinary abandonment of potentially-significant value for Class 19 is not justified by the
Settlement Noteholders’ potential provision of a secured loan, post-bankruptcy, to the
“reorganized” Debtors3 or other minimal consideration supposedly to be provided by the
Settlement Noteholders in connection with the Plan.
The TPS Consortium does not believe the Debtors’ estates are receiving sufficient value in
exchange for the release of significant potential claims against the Settlement Noteholders,
and recommends that members of Class 19 vote against the Plan and support further
investigation into such claims.

The TPS Consortium does not believe the Debtors’ estates are receiving sufficient value in
exchange for the release of significant potential claims against the Settlement Noteholders,
and recommends that members of Class 19 vote against the Plan and support further
investigation into such claims.
In sum, the TPS Consortium believes the Plan fails to provide members of Class 19
with an appropriate recovery on account of their interests and is another in a series of
proposed settlements negotiated against the interests of Class 19. In that regard, the TPS
Consortium believes members of Class 19 should vote against the Plan and elect to “opt out”
of the releases proposed to be granted to JPMC, the FDIC, the Settlement Noteholders and
others. To the extent you share our concerns regarding the Plan, we would also encourage
you to voice your opinion to others who will be voting on the Plan.

How does a $3 billion potential disallownace claim from SNH become $75 million and 95% WMI2? Answer: Willingham... I won't into it, however, a lot individuals here know why.






So, imo, TPS is only posturing saying APR, however, they know the judge will NOT ZERO OUT COMMONS. Judge may just change the split.

Judge, like everyone else, wants kick out this case and be done with it and everyone needs releases which infers that commons won't be zero'ed out. I am very confident in that.

Bottom line: It is all about "consent" and the percentage. NOT zeroing out commons. TPS has a VERY GOOD ARGUMENT.

BTW, the effective date is what you have to look out for. That is the date where all shares held will converted.









http://www.kccllc.net/documents/0812229/0812229120104000000000017.pdf



imo