"...Prior to the filing WMI had directly or indirectly owned all of the outstanding capital stock of Washington Mutual Bank (“WMB”) and WMB’s subsidiaries, including WaMu Asset Acceptance Corp. (“WaMu Asset Acceptance”) and WaMu Capital Corp.(“WaMuCapital”). WMB originated residential mortgages, which were then pooled and transferred to special-purpose trusts (the “WaMu Trusts”). The loans were also pooled with those of third parties into similar trusts (the “WMALT Trusts”). The Trusts sold securities to WaMu Asset Acceptance for resale to investors. From 2006 through 2007, WaMu Asset Acceptance sold approximately $71 million in WaMu and WMALT Trust Certificates to Tranquility..."
"...The Court finds that the Debtors have not adequately proven that the Pooling and Servicing Agreements constitute an operating agreement under the plain meaning of the statute. Even if they could, however, they cannot overcome the fact that WMI was not a party to those agreements... because the agreement in question is between two non-debtors, it cannot provide a basis for subordination ..."
"...Therefore, the Court concludes that because the Certificates sold by WaMu Asset Acceptance were not securities of the Debtors or an affiliate of the Debtors, subordination under section 510(b) is not available..."
"... IV. CONCLUSION For the foregoing reasons, the Court finds that Tranquility has sufficiently stated a claim against the Debtors and the Debtors have not stated a basis for its subordination. An appropriate order is attached..."
Reagrding your this part of your post:
"This is why I believe there was a Turnover Action, WMI v WMIIC and the LT claimed ownership of WMIIC's assets in an SEC filing. "
Could you please expand or facilitate link/filing about this??
Ref: IMO, WMIIC ""owned/controlled"" these Trusts on behalf of and for the sole benefit of WMI and NOW the WMI Estate/Tracking Markers.
Comments: SPE/Trust are designed for independent ownership. Not controlled by WMI nor WMIIC.
Yes these SPE's/Trust are the "Crown Jewel" of WMI in it's capacity of being the Parent. Also Facts of great importance:
1) The bankruptcy estate does not have jurisdiction over these SPE's/ Trusts. WMI in its capacity of equity interest does.
2) WMI abandoned it's stock as worthless on record with the Estate. The Estate in turn diverted all future benefits back to WMI. A clever astute move by WMI.
A Turnover action is routine Bankruptcy procedure to bring back to WMI estate what is considered estate assets. And SPE/Trust Income is not part of the estate assets.
We are all good here with the SPE's/Trusts of the Parent - WMI.
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