Replies to post #562115 on Mr Cooper Group Inc fka COOP

[Large Green]

LP, here is an excellent, factual, detailed explanation by former WithCatz in late year 2012 to Ron explaining the 75/25 origination and then implemented in this case and is exactly on point from my knowledge of case and documents

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Re: Hidden in Plain Sight
« Reply #57 on: November 21, 2012, 06:04:13 AM »
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Quote from: ron_66271 on November 21, 2012, 02:58:59 AM

This is a payout schedule to include both the preferred and commons classes. Preferred does NOT need to be payed in full as commons are being payed also. Hence 75/25.

The pay out is split 75/25 until preferred is payed in full. Preferred has a face value and is caped out at the face value!

Enjoy.

Incorrect.

Irrespective to my feelings about the validity of the hypothetical.....

The ongoing 75/25 split has two conceptual parts....

1) It allowed commons to immediately share in the post-bankruptcy distributions of WMIH shares, and receive any future distributions into the Escrow Shares (LTIs) -- both in 75/25 ratio. This was done by the court 'allowing' a removal of the Absolute Priority Rule -- which is allowed, when there is a vote by all affected class members to support it.

2) But, because the APR was agreed to be removed, it now remains a perpetual 75/25 split -- effectively meaning there is no longer a 'cap' conceptually on former preferreds.

You can't get one without the other.

Said another way -- If a 'cap' on former preferreds was to be maintained, then there could not be a 75/25 split to allow commons to have shared immediately in post-bankruptcy WMIH shares, etc... Eg, commons would have gotten 0% of WMIH shares. And Escrow Shares would also be compensated 100% to former preferreds until face, and then to former commons...

The effects of the 75/25 split have been discussed exhaustively, including confirmation from former EC people and the WMILT that the 'cap' was removed in exchange for the 75/25 split.
« Last Edit: November 21, 2012, 06:44:01 AM by WithCatz

[hexson]

Exactly, and then there was all that pressure to convert commons to Preferreds - I never bought into that always kept my common position - I also own ps and ks - just didn't like the way that whole " movement" came up

[AZCowboy]

~ LP, Yep A Part Of The "Myth and Lore" ~

That "75/25 to the end", storyline needed to be fueled and then maintained due to the continuance of the blocking and delaying mechanism originally put into place back in 2009' ...

The blocking and delaying mechanism originally put into place back in 2009', right after the "the WMI Action" was filed, ... needed to be carried forward due to the continuing litigation in D.C., beyond Plan 7's Implementation ...

beyond the original 2009' delaying and blocking mechanism, this was accomplished with the creation of a Disputed Claims Reserve, a DCR, at Plan 7's Implementation ... able to hold back the completion of WMI's Plan allowed senior creditor debt (Tranche 4) ...

... Plan 6 Failed' ... and the D.C. Dual Track Continued' with Plan 7's approval ...

AZ