You read Moelis about the same way I do. It is NOT a terrible outcome, just a way less desirable one than the utility model for current common shareholders. In a tit-for-tat comparison with junior preferred shares, it is about the same escalating value for preferreds (around 4X) but with divvy potential restored many years ahead of commons and no risk of dilution.
The problem with Moelis is the impact on government-held warrants. If the government were not addicted to huge FnF income, I might see more merit in a movement towards Moelis and all the donor support putting pressure on the Trump team to provide a commensurate payoff. But Trump's economic agenda is under a lot of duress and I think Secretary Mnuchin is going to grab for the outcome that favors him best. That would not be Moelis but the FHFA/Dworkin version of utility structure.
The fly in the ointment for both camps is the Collins case, now in its remand phase, as it potentially delays any administrative reform while the problem of constitutional defect seeks a cure. I do not believe either proposed solution can be set in motion until that nasty and not-so-little detail gets resolved. The investors that filed some of these peripheral lawsuits may have actually degreased the resolution skids just as some solution was about to be delivered. I view the cadre of Jones, Day suits as falling into this self-same category of defeat snatched from the jaws of victory dilemma. Just you watch as the DOJ files for either an en banc review of the Collins remand or a writ of mandamus to the Supreme Court, slowing the process for yet another 6 months to a year, or more. Remember that the government faces a dual consequence under an unchallenged Collins ruling because it also threatens the structure of the CFPB led by Trump's buddy, Mick Mulvaney.
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