writonwater, good perspective.
Thanks for the composition and presentation of your understanding of the matters. I might not see or agree with everything, but this is how discussions contribute.
Regarding Judge Walrath's confirmation order and the Absolute Priority Rule, "prior to that time and prior to settlement, a number of retail shareholders were trying to preclude the PIERS class from accepting the proposed plan," on that same ground. However, after the Equity Committee agreed to the mediated settlement, the effort was sort of mooted.
So, IMO, and IANAL, I look to the 3rd Circuit court (but also note the 2nd Circuit's different position). Both have held that, "absent consent, "gifting" pursuant to a Chapter 11 plan violates the Absolute Priority Rule.
Absent consent I believe was overcome by the classes (between the gifting senior claimant and the giftee lower claimant or equity), that "consented" to the Plan via their vote in favor of the Plan (97.22% of PIERS by dollar amount, CCB's by vote pre-agreement). This was critical for the CCBs and the PIERS, as explained by the Debtor, because they would suffer erosion of resources if the Plan was not confirmed and litigation continued. It also used the Chapter 7 liquidation bar to the Court and noted that the forced sale of WMMRC would not generate the same value as the settlements in the 7th Plan ($140M in runoff notes issued by WMIH).
So, I guess that (1) with consent of the intermediate classes the "gifting" was confirmable and (2) also produced a better result bar for creditors in alternate liquidation.
Again, IANAL, but that is what I consider and considered. You certainly could be right, however, that there was a violation of the APR. And, as such, I just have a hard time with therefore then "deriving a future benefit intention" from the Judge to give us anything. I hope I'm wrong.
Enjoyed the exchange.
Take care.
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