Replies to post #549703 on Mr Cooper Group Inc (COOP)

[JusticeWillWin]

To be honest, I don't know what I should believe. You know from previous conversations with me that I think the Escrows will benefit and WMIH was "the icing on the cake". But IMO the speech concerning the WMCT2001 is absolutely clear. Another interesting quote from the denied confirmation order for POR6

https://www.deb.uscourts.gov/sites/default/files/opinions/judge-mary-f.walrath/mfw01071108-12229_0.pdf

b. Treatment of PIERS as creditors
The Equity Committee and the LTW Holders argue that the PIERS Claimants should be classified as equity, not as creditors, because their rights included warrants to purchase WMI common stock (exercisable in 2041). (Ex. D-5 at 41.) The Plan Supporters disagreed, arguing that the PIERS claimants hold preferred and/or common stock in a trust, Washington Mutual Capital Trust 2001 (“WMCT 2001"), but that the Debtors have an obligation to WMCT 2001 based on Junior Subordinated Debentures issued by the Debtors to WMCT 2001. Further, they note that the PIERS’ warrants have not been exercised and they currently do not hold stock in WMI. Therefore, they argue that the PIERS claims represent debt.

However, the Debtor’s witness was not sure whether WMCT 2001 had been merged into WMI. (Hr’g Tr. 12/2/2010 at 147-48, 150.) 101
If WMCT 2001 was merged into WMI, then the PIERS claims could be
viewed as equity. If it was not, then they are properly treated
as creditors under the Plan because they do not hold stock in the
Debtors but only stock in WMCT 2001, which is a creditor of the Debtors. Consequently, the Court is unable to determine whetherthe PIERS are properly classified as creditors ahead of the equity security holders.

And page 78 and 79 of the DS:
http://www.kccllc.net/wamu/document/0812229111212000000000005

WMI owns the common securities (the “PIERS Common Securities”) of such trust.

And the graphic on page 79

IMO a typical hen egg problem, isn't it??? The Debtor is insolvent, has an obligation to the WMCT2001 (which is NOT one of the 33 subs of the debtor), which makes WMCT2001 a creditor of the debtor. BUT the debtor holds 100% of the equity in the WMCT. Hmmmmmm.....

The WMCT2001 cannot be released UNTIL the debtors paid the obligations to the WMCT2001, but this can only happen if the other creditors got paid IMO

Your post:

In other words you believe the common shares of WMCT, meaning any remaining asset value wholly owned by WMI was transferred to WMIH (COOP)...correct?

[JusticeWillWin]

Because the PIERS were not allowed to receive more than they were owed and it was clear from the beginning that the WMILT would have enough money to satisfy their claim (plus interest) IMO

The PIERS did not "own" the WMCT2001. As shown in my previous post, WMI held 100% of the common securities in the WMCT2001. So if there is enough money (from other sources) to pay the PIERS holders there would be no need "to keep the WMCT2001" (which wouldn't be possible anyhow because it is an independent entity/trust and not a sub of WMI) with the WMILT. It doesn't matter from which money the PIERS holders will be paid...

Just my opinion

In other words you believe the common shares of WMCT, meaning any remaining asset value wholly owned by WMI was transferred to WMIH (COOP)...correct?

If yes, why would the LT retain the Piers Creditor debt which was backed by WMCT's assets and allow WMIH to receive those assets free and clear. That makes no sense IMO.