Replies to post #503177 on Mr Cooper Group Inc fka COOP

[Large Green]

LP, thankfully one of our subject matter experts CBA09 replied recently and I will copy/paste his reply that should answer your question.


This is a wonderful post by CBA09 and I thank him very much for sharing his experience. The following is CBA09's recent post.
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Ref: Based on your experience, if applicable, what is your opinion on the following.............


1) Does the GSA govern ALL future distributions of Safe Harbor assets (only) to our "Markers" or will it revert to pre-bankruptcy ownership rights of the different classes ie Preferred and Common???

Comment:
"Safe Harbor" rules within Bankruptcy Code governs the protection of "ALL" distributions of Safe Harbor assets.

Our situation - Retained Assets ( which will be there ) within SPE/Trust are in the form of residual interests via Certificates held by subsidiaries of WMI (Parent). Safe Harbor rules protect these assets to pre-bankruptcy ownership. The Court nor the estate have no avoidance / claw back power. Fact - Court will ensure / protect the transfer of these assets to it's rightful certificate holder.

I contend WMI being the Parent and having a security interest it's subsidiaries which in turn that have a security interest via holders of security certificates of SPE/Trust residual certificates will reap the value of these Safe Harbor assets. Finally, WMI's legacy holders(escrow holders) gets the so-called Retained Assets. And, yes they will be there.


2) Can any party (FDIC, DTC etc) other than the WMILT make cash distributions directly to our "Markers" for any Safe Harbor assets held outside of the bankruptcy process???

Comment:
Yes, very likely to happen. Reason, the Residual Certificates are securities.

3) As the reorganized WMI, does WMIH own or are they entitled to any of the Debtors pre-bankruptcy assets/interests, other than that which was transferred during the reorganization process (ie WMMRC and 100% Equity in WMIIC) and clearly stated in the GSA???

Comment:
Yes, those assets, if any, that were transferred past a Pooling & Service Agreement cut off date. They would not be protected as Safe Harbor Assets.

4) Is the WMILT the sole and rightful "inheritor" and arbiter of the entire Debtors (WMI + WMIIC) estate,..bar none???

Comment:
The Court has the ultimate authority.

[hotmeat]

In a recent post I asked a similar question and I interpreted his answer to be that NO, our Markers are certainly NOT MOOT.

The response basically stated that the Safe Harbor assets are protected back to pre-bankruptcy ownership...ie WMI.

That being the case, coupled with WMI's subsequent bankruptcy filing, those ownership rights now reside with our Markers.

[CBA09]

Ref: CBA09, if safe harbor rules protect the assets to pre-bankruptcy ownership then its distribution should not apply to POR7. Does that mean escrow markers are moot? Will all Wamu shareholders receive a distribution including the non-releasing ones? Thanks in advance for your input. I have been wondering about this for some time.

Comment:
Liquidation of assets involves two distinct assets:

1) Property of the Bankruptcy Estate - (Por7 applies).

2) Non-Property of the Bankruptcy Estate - Safe Harbor Assets ( regular bankruptcy code procedures / priority apply).

While the above two are distinct in nature "ALL" residual interest will go to Escrow Markers. So, no, not moot. Escrow Markers are the legacy shareholders. Thereby, have final legal standing and in turn sole contractual rights / title in residual interest.

Ownership Chain -
WMI owns the assets of WMI and in turn has legal title to all the assets of it's subsidiaries. Shareholders of WMI have legal title to all the assets of WMI. All assets that end up in WMI thru it's subsidiaries are thereby assets that WMI shareholders have legal contractual rights.

Por7, thru its declarations, have addressed the distribution of liquidated Bankruptcy Estate Assets. All residual interest of estate assets will go to Escrow Markers per the 75 % / 25 % allocation.

Since our Safe Harbor Assets are outside the bankruptcy estate, those captured within SPE/Trusts will follow each respective Pooling & Service Agreement (PSA) provisions. Generally, it's Parent that receives cash flows of residuals. Note, SPE# 1 create the SPE# 2 /Trusts, SPE 1 are many times direct subsidiaries of the Parent. And, SPE # 1's have a great deal of involvement in residual interest of SPE # 2 / Trusts.

In a solvent entity shareholders cannot force a distribution. A Corporation, thru it's board, has to declare a distribution of it's profit before shareholders are to receive any distribution in the form of dividends.

PSA are compelling and indivisible - only one end stop - Escrow Markers.