Replies to post #561664 on Mr Cooper Group Inc fka COOP

[ItsMyOption]

BBANBOB, I sure hope other don't just cut and paste - send that letter as it very much needs to be edited. Not sure who wrote it??
I could edit and post new update if anyone plans to send it.

I asked my congressional rep to light a fire under Cliff White's butt about: (1) why the underwriters (Goldman Sachs, Morgan Stanley, and Credit Suisse) got $72,000,000 in Class 19 in the the March 28, 2013 stipulation when they should have got -- at most -- a claim in Class 18 (a creditor claim, so they would have been capped); and

(2) amending the trust agreement (Section 9.9 of the trust agreement provides that it can be amended) to prevent use of LT assets unless at least 90% of the profits generated directly or indirectly therefrom are returned to the LT.

If you have time, please think about reaching out to your congressional representative and requesting that he/she tell White to act on (1) and (2) above.

If you look at Exhibit H of the LT's 9/14/12 objection to the underwriter's claim, you'll see that under plan 6 the $72MM was put in a class that was to be DISALLOWED. This was done pursuant to a stipulation dated 2/3/11. (See link below. (In the 2/3/11 stipulation the underwriters get just under $24MM in Class 18 (a creditor's class, which is CAPPED), and $72MM goes into Class 20, which was to be EXTINGUISHED. This means that under plan 6 the most the underwriters could get would be $24 million.))

Rosen's 9/14/12 objection is devastating -- as fierce as anything he leveled against the golden parachute claims. In the 9/14/12 objection the LT expressly states that the underwriters are entitled to NOTHING.

One must ask one's self why, just six months later, on 3/28/13, that same $72MM claim became valid. Again, in both plan 6 and the LT's objection document the LT reserved its right to object to the underwriters' claim: www.kccllc.net/wamu/document/0812229120914000000000006 (it's a long document but only the first 30 pages and Exhibit H are relevant) (Document 10666). The 3/28/13 stipulation essentially flips the $24MM and $72MM claims; the latter is now valid and dilutes Class 19 (but mysteriously doesn't affect Class 22) by nearly 1%, which can be a huge amount because it is uncapped; there's no limit to how much the holders can get.


Mr. Clifford J. White, III
Director of the United States Trustee Program
441 G Street, NW, Suite 6150
Washington, DC 20530
Fax: [phone]

email: [e-mail]

Mr. Clifford J. White, III
Director of the United States Trustee Program
441 G Street, NW, Suite 6150
Washington, DC 20530
Fax: [phone]

email: [e-mail]

You might also mention what Andrew R. Vara, Esq., Acting United States Trustee for Region 3 said about the UST’s mandate:

“Pursuant to 28 U.S.C. § 584, the U. S. Trustee is charged with the administrative oversight of cases commenced pursuant to chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). This duty is part of the U. S. Trustee’s overarching responsibility to enforce the bankruptcy laws as written by Congress and interpreted by the courts. See United States Trustee v. Columbia Gas Sys., Inc. (In re Columbia Gas Sys., Inc.), 33 F.3d 294, 295-96 (3d Cir. 1994) (noting that U.S. Trustee has “public interest standing” under 11 U.S.C. § 307, which goes beyond mere pecuniary interest); Morgenstern v. Revco D.S., Inc. (In re Revco D.S., Inc.), 898 F.2d 498, 500 (6th Cir. 1990) (describing the U.S. Trustee as a “watchdog”). Pursuant to 28 U.S.C. § 584(a)(3)(B), the U. S. Trustee has the duty to monitor plans and disclosure statements filed in Chapter 11 cases and to comment on such plans and disclosure statements.” (Emphasis added.)

In re Cubic Energy, Inc., et al, Case No. 15-12500-CSS (Bankr. D. Del. 2016).

You might also add that equity is a fundamental part of the bankruptcy system and where there is a hint of inequity the UST has a duty to investigate a matter. The flip from 9/14/12 ('no soup for the underwriters') to 3/28/13, when the underwriters get a $72,000,000 EQUITY claim on a claim/theory the LT had called worthless just six months before.