Replies to post #567064 on Mr Cooper Group Inc (COOP)

[iPrelude]

As discussed herein, on February 1, 2019, the Court entered the Order (as defined below) granting the Trust Motion (as defined below), subject to a stay of the effectiveness of the Order for twenty-one (21) days to allow the claimants to file a notice of appeal to the Court. No such appeal was filed. As a result, on the Order’s effective date of February 25, 2019, the DCR released approximately $68.3 million to become unencumbered Trust Assets. After giving effect to the foregoing, the net asset balance in the DCR was approximately $23,600 and the LTI balance in the DCR was $0.

If and when distributions from the Trust become available to Trust Beneficiaries who have not received LTIs to date, additional LTIs will be issued to effectuate future distributions. As of December 31, 2018, Allowed Class 18 (Subordinated Claims) totaled $38.2 million, plus $8.4 million of post-petition interest. Disputed claims related to Class 18 must be addressed prior to distributing additional LTIs or making further cash distributions. Any additional release of net assets or the cancellation of an LTI balance Disputed Claims Reserve would increase the net asset value per LTI that is available for the holder of Allowed Claims. The following discussion relates to the status of current legal proceedings related to material disputed claims.

[iPrelude]

As of December 31, 2018, the DCR held $66.6 million in reserve on account of Employee Claims, plus $1.5 million in reserve for employer taxes had the claims been allowed, with the aggregate remaining amount of those claims totaling $61.5 million after the application of the Section 502(b)(7) cap. As a result of the Employee Claims order, dated February 1, 2019, the DCR released approximately $68.3 million to be unencumbered Trust Assets. Subsequently, the Trust made a distribution of $50.0 million to LTI holders. See discussion of Impact of Subsequent Event on Financial Results in Item 7 of this report.

[iPrelude]

Mortgage Pass-Through Litigation

On August 4, 2008, New Orleans Employees’ Retirement System and MARTA/ATU Local 732 Employees Retirement Plan (together, the “Mortgage Pass-Through Claimants”), on their own behalf and on behalf of a class of persons and entities who purchased certain mortgage-backed certificates issued by twenty-six Washington Mutual Mortgage Pass-Through Trusts (the “Pass-Through Trusts”) pursuant to a registration statement filed by WaMu Asset Acceptance Corp. (“WMAAC”), a wholly-owned subsidiary of WMB, with the SEC on December 20, 2005, as supplemented on January 3, 2006, commenced that certain action styled as New Orleans Employees’ Retirement System, et al. v. Federal Deposit Insurance Corporation, et al., No. C09-134RSM (W.D. Wash.) in Washington state court against WMI, WMAAC, the Pass-Through Trusts, and certain individual defendants alleging violations of Sections 11, 12(a)(2) and 15 of the Securities Act, 15 U.S.C. § 77a, et seq. (the “Mortgage Pass-Through Litigation”).

On January 12, 2009, Boilermakers National Annuity Trust Fund (“Boilermakers”) filed a complaint in the Washington District Court captioned Boilermakers National Annuity Trust Fund v. WaMu Mortgage Pass-Through Certificates, et al., Case No. 09-0037 (the “Boilermakers’ Complaint”). Like the original complaint filed by the Mortgage Pass-Through Claimants, the Boilermakers’ Complaint asserted claims under the Securities Act in connection with certain certificates. On February 19, 2009, the defendants moved to consolidate their lawsuit with the Mortgage Pass-Through Litigation, and; on August 14, 2009, the W.D. Washington District Court ordered consolidation of three (3) related cases – the Boilermakers’ action, the original Mortgage Pass-Through Claimants’ action, and a third related action (as consolidated, the “Boilermakers Consolidated Action”).

On March 30, 2009, the Mortgage Pass-Through Claimants filed a proof of claim against WMI in WMI’s chapter 11 case in the amount of $39.8 billion. The court appointed The Policemen’s Annuity and Benefit Fund for the City of Chicago (the “Chicago PABF”) as Lead Plaintiff for the Boilermakers Consolidated Action on October 23, 2009, and; on January 18, 2010, the Chicago PABF filed an amended proof of claim against WMI, reflecting the then-current claims based upon the causes of action alleged in the Boilermakers Consolidated Complaint. The amended proof of claim superseded the March 30, 2009 proof of claim. The Debtors objected to the amended proof of claim on various grounds including that the state law claims were preempted, that the claimants failed to establish loss causation, that WMI was not a controlling person to any entities that committed securities violations, that there were no underlying securities law violations, that the federal claims were barred by the statute of limitations, and that, because WMI was removed as a defendant in the Mortgage Pass-Through Litigation, which litigation gives rise to the proof of claim, the Debtors should not have any liability with respect to the allegations contained in the lawsuit.

Pursuant to that certain Stipulation Resolving Debtors’ Amended Thirty-Second Omnibus (Substantive) Objection With Respect to Claim Nos. 3812 and 2689, dated November 23, 2010, by and among the Debtors, MARTA/ATU Local 732 Employees Retirement Plan, individually, and Chicago PABF and Doral Bank, as lead plaintiffs on behalf of the putative class in the Boilermakers Consolidated Action (the “Stipulation”), the parties thereto agreed that certain claims filed by and on behalf of the plaintiffs would be withdrawn, without prejudice to the re-filing of such claims in the event that a plan was filed that would provide recovery to holders of Allowed Subordinated Claims (as defined in the Plan). Certain of the plaintiffs argued that they were permitted to re-file their claims because the Plan provides for a conditional distribution to holders of Allowed Subordinated Claims. In the plaintiffs’ objection to the Disclosure Statement, filed January 4, 2012, the plaintiffs asserted that they are entitled to re-file their claims as General Unsecured Claims rather than as Subordinated Claims. On January 10, 2012, Chicago PABF, Doral Bank, and Boilermakers asserted a new proof of claim, asserted in the amount of “at least $273 million,” on behalf of the class in the Boilermakers Consolidated Action. The Trust disputed the new proof of claim and was required to reserve $435.0 million with respect to the estimated claim until resolved. On May 16, 2012, the Bankruptcy Court, citing the Stipulation, found that the plaintiffs’ new proofs of claim had been filed prematurely, and stated that the claimants would be allowed to re-file their proof of claim only if and when recoveries are available to Subordinated Claim holders (Class 18). Additionally, the Bankruptcy Court denied the plaintiffs’ motion to classify such claim as a general unsecured claim, reserving such determination pending the filing of a proof of claim, and allowed the Trust to release $406.0 million of the $435.0 million which was reserved in connection therewith. On February 25, 2019, the Trust initiated a distribution of approximately $50.0 million to LTI Holders. After giving effect to such distribution, LTIs in Tranche 4 were paid in full. As a result, the Trust believes that the aforementioned Claimant is now permitted to re-file its proof of claim. Any such re-filing, and the ultimate resolution of any such claim (including the priority status thereof), may affect the amount, if any, of distributions that would otherwise be available to, among others, holders of Equity Interests.

[iPrelude]

WMB Subordinated Debt Misrepresentation Claims

Holders of WMB Subordinated Notes Claims filed proofs of claim against the Debtors in their Chapter 11 Cases seeking payment of allegedly outstanding amounts due on such notes and asserting multiple other claims, including, but not limited to, misrepresentations and omissions under the applicable securities laws (the “Misrepresentation Claims”).



12

By orders, dated December 29, 2011, the Bankruptcy Court held that the Misrepresentation Claims should be subordinated pursuant to section 510(b) of the Bankruptcy Code. Accordingly, holders of Misrepresentation Claims would be entitled to receive their Pro Rata Share of Liquidating Trust Interests only if their Misrepresentation Claims were deemed Allowed Claims and recoveries were to reach Class 18 (Subordinated Claims). The Bankruptcy Court expressly preserved the rights and defenses of all parties, including the Debtors’ with respect to the validity and amount of the WMB Subordinated Notes Claims, including the Misrepresentation Claims.

By order, dated January 19, 2012, the Bankruptcy Court approved a stipulation and agreement by and among the Debtors and certain holders of WMB Notes Claims (as defined in the Plan) that asserted Misrepresentation Claims, providing, among other things, that such holders would receive an Allowed Subordinated Claim (as defined in the Plan) in the aggregate amount of $15 million on account of the claims asserted by such claimants and, furthermore, that such claimants withdraw, with prejudice, any appeal of the Court’s order. The Trust believes that the majority of the outstanding Misrepresentation Claims have been resolved pursuant to such settlement agreement. The remaining holders of Misrepresentation Claims remain unliquidated and disputed.

As previously discussed, with the distribution on February 25, 2019, LTI holders in Tranche 4 were paid in full; therefore, recoveries may be available for Class 18 claimants. The status of Misrepresentation Claims will need to be determined (e.g. allowed, disallowed or estimated) prior to making any future distributions. Therefore, the Trust intends to litigate its prior objections to those claims.

[iPrelude]

Tax Litigation

In years prior to the Petition Date, WMI and its subsidiaries (the “WMI Group”) initiated a suit in the Washington District Court and two suits (subsequently combined into a single action) in the United States Court of Federal Claims (“Court of Claims”) claiming federal tax refunds for deductions for the amortization and abandonment of certain intangible assets by a predecessor corporation in the 1990 through 1995 and the 1998 tax years. In addition to claiming deductions relating to certain intangible assets in the Court of Claims suit for 1995, WMI claimed a refund for taxes paid as a result of an Internal Revenue Service (“IRS”) audit adjustment accelerating the recognition of certain income into the 1995 tax year which was resolved in 2016. As of December 31, 2017, only the Court of Claims actions relating to claiming deductions for the amortization and abandonments of certain intangible assets were unresolved. The Washington District Court action was finalized with the Ninth Circuit, in its opinion dated May 12, 2017, ultimately holding that WMI did have a tax basis in the assets acquired but that it failed in meeting its burden of proof as to determining the proper amount of the refund to which it was entitled.

The remaining Court of Claims action was litigated in a trial that commenced on February 16, 2016. On February 21, 2017, the Court of Claims issued its opinion in which it dismissed the case brought by the WMI Group with prejudice; as such, the WMI Group could not amend the complaint to address any alleged deficiencies. The Court of Claims held that the WMI Group did not meet the burden of proof as to the value of the acquired intangibles and that the Court of Claims was unable to allocate the purchase price among the acquired intangibles. On April 20, 2017, the WMI Group filed an appeal of this decision with the United States Court of Appeals for the Federal Circuit (the “Court of Appeals”).The hearing before the Court of Appeals was held on May 2, 2018. On June 4, 2018, the Court of Appeals issued its ruling in which it affirmed the decision of the Court of Claims. On July 19, 2018, the Trust filed a petition for rehearing en banc with the United States Court of Appeals for the Federal Circuit. On September 13, 2018, the United States Court of Appeals for the Federal Circuit denied the motion for rehearing. No further action on the Court of Claims action is anticipated and the value of the tax litigation is $0.

[iPrelude]

Global Settlement Agreement Receivable / Other Taxes Receivable

The $5.3 million receivable that is reflected in the Trust’s Consolidated Statement of Net Assets in Liquidation as of December 31, 2018 represents the Trust’s estimate of remaining items in other taxes receivable. As discussed in Part 1 of this report, the remaining tax litigation was resolved in 2018; the Court of Appeals affirmed the decision of the Court of Claims denying the WMI Group any refund. While the value of the tax litigation is zero, the value of the state tax refunds due and received, the potential for recovery of interest netting claims, and the return of excess funds in the Tax Refund Escrow is sufficient to support the valuation of $5.3 million.

[iPrelude]

Annually, the Trust prepares a budget for the remaining life of the Trust based on an assessment of the Trust’s activities. The Trust recorded a liability of $16.1 million at December 31, 2018 and $18.3 million at December 31, 2017 for its estimate of the costs to be incurred during liquidation. On December 20, 2017, the Bankruptcy Court granted the Trust’s motion to extend the Trust’s term to March 19, 2021 (unless dissolved earlier or otherwise extended) and expected costs to operate during the term, as extended, are included in the recorded liability as of December 31, 2018. The Trust currently estimates aggregate costs from the Effective Date through the end of the Trust, on or before March 19, 2021, to be $110.6 million.

The Trust does not have predictable revenue-generating operations. Therefore, in an effort to ensure that the Trust has adequate funds on hand to support the possible increase in operational costs associated with, among other things, litigating Employee Claims to final resolution, as of December 31, 2018, the Trust withheld $10.1 million from funds otherwise available for distribution. After giving effect to this additional hold-back, total funds available for operating purposes were $26.2 million.

[iPrelude]

Investment in Subsidiaries

At December 31, 2018, the Trust had no subsidiaries.

From the Effective Date through December 2017, the Trust had five (5) subsidiaries without any active business operations. The subsidiaries adopted a plan of liquidation in October 2012. The assets held by these subsidiaries were comprised solely of cash and cash equivalents. Upon adoption of the plan of liquidation, in October 2012, the subsidiaries distributed $3.43 million to the Trust. The Trust subsequently distributed such cash to LTI holders. The subsidiaries each maintained a level of cash necessary to pay final invoices received. On June 23, 2017, four of the subsidiaries were merged with and into the last remaining subsidiary, WaMu 1031 Exchange. Prior to such mergers, the subsidiaries distributed their remaining cash to the Trust. The Trust received $444,333 on June 27, 2017. The last subsidiary, WaMu 1031 Exchange, which no longer had any assets, was dissolved on December 8, 2017. In total, from the Effective Date through the dissolution of the subsidiaries, the Trust received distributions totaling $3.87 million from the subsidiaries.

[iPrelude]

After giving effect to the funds released from the Disputed Claims Reserve following the disallowance of the Disputed Employee Claims and the cash distribution initiated on February 25, 2019, the Trust’s Net Assets in Liquidation on February 28, 2019, were:



Net Assets in Liquidation (in millions) 2/28/2019
Liquidating Trust

$ 34.9
Disputed Claims Reserve

$ 0.0
Total Net Assets in Liquidation

$ 34.9
As of December 31, 2018, Allowed Class 18 (Subordinated Claims) totaled $38.2 million, plus $8.4 million of post-petition interest. Disputed Claims related to Class 18 (Subordinated Claims) must be addressed prior to issuing additional LTIs or making further cash distributions.

[iPrelude]

Liabilities

Estimated Costs to be Incurred during Liquidation

The liquidation basis of accounting requires the Trust to record a liability upfront for costs expected to be incurred during the liquidation of the Liquidating Trust Assets. Annually, the Trust prepares a budget based on its assessment of the Trust’s activities for the expected remaining life of the Trust. As of December 31, 2018, the Trust estimated total operating costs to operate through the end of the Trust, March 19, 2021 (unless dissolved earlier), to be $16.1 million. Based on the estimated total operating costs, management recorded an increase of $3.6 million to the Trust’s Operating Reserve for the year-ended December 31, 2018. Given the inherently uncertain nature of estimates, actual costs related to the liquidation will likely differ from current estimates.

Accrued Liabilities

As of December 31, 2018 and 2017, the Trust had other accrued liabilities of $1.2 million and $1.1 million, respectively which were primarily comprised of accrued professional fees for services rendered.

[iPrelude]

Executive Officers and Employees

William C. Kosturos

As compensation for Mr. Kosturos’ services as Liquidating Trustee, the Trust Agreement provides that A&M, on behalf of Mr. Kosturos, is paid a monthly fee of $25,000. For 2018, 2017 and 2016, compensation paid on account of the Liquidating Trustee’s services totaled $300,000 per year.



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Table of Contents
John Maciel

The Trust pays A&M on an hourly basis in accordance with an engagement letter entered into between the Trust and A&M. The applicable rate is subject to adjustment annually at such time as A&M adjusts its rates generally. The Trust is also required to reimburse A&M for its reasonable out-of-pocket expenses incurred in connection with any services provided pursuant to such engagement letter. Mr. Maciel’s current hourly rate is $885.00. For 2018, 2017, and 2016, the Trust paid A&M $503,542, $789,394, and $359,625, respectively, for Mr. Maciel’s services rendered to the Trust for the applicable period.

Charles Edward Smith

In connection with emerging from the chapter 11 proceedings, the Trust entered into an employment agreement with Mr. Smith dated April 30, 2012. The employment agreement provides for a base salary of $424,360, a target bonus equal to 70% of Mr. Smith’s base salary, and incidental benefits such as healthcare coverage and parking. Mr. Smith’s current base salary is $537,296. In addition, upon termination, Mr. Smith is entitled to receive a severance payment equal to (a) three (3) months’ base salary, (b) a pro-rated bonus payment and (c) healthcare coverage for six (6) months. Mr. Smith’s employment agreement contemplated an initial term of six-months, subject to automatic renewals for subsequent six-month periods unless earlier terminated in accordance with the terms thereof. For 2018, 2017, and 2016, Mr. Smith was paid $870,227, $840,799, and $812,366, respectively, for services rendered to the Trust for the applicable period.

Doreen Logan

In connection with emerging from the chapter 11 proceedings, the Trust entered into an employment agreement with Ms. Logan dated April 30, 2012. The employment agreement provides for a base salary of $212,180, a target bonus equal to 100% of Ms. Logan’s base salary, and incidental benefits such as healthcare coverage and a transportation subsidy. Ms. Logan’s current base salary is $268,648. In addition, upon termination, Ms. Logan is entitled to receive a severance payment equal to (a) three (3) months’ base salary, (b) a pro-rated bonus payment and (c) healthcare coverage for six (6) months. Ms. Logan’s employment agreement contemplated an initial term of six-months, subject to automatic renewals for subsequent six-month periods unless earlier terminated in accordance with the terms thereof. For 2018, 2017, and 2016, Ms. Logan was paid $510,349, $493,091, and $476,416, respectively, for services, rendered to the Trust for the applicable period.

[iPrelude]

Mr. Willingham

In addition to his role as a member of the TAB, Mr. Willingham was a director of Reorganized WMI until July 31, 2018. Mr. Willingham beneficially owned 51,876 shares of common stock of Reorganized WMI on July 31, 2018, after taking into account the 1-for-12 stock split executed in October 2018. Until July 31, 2018, Mr. Willingham also served as Chairman of Reorganized WMI’s Audit Committee, and was on Reorganized WMI’s Compensation Committee and Nominating and Governance Committee and was a member of the Board of Directors of WMMRC.



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Table of Contents
Mr. Smith

In addition to his role as an employee, Executive Vice President, General Counsel and Secretary of the Trust, Mr. Smith was, among other things, an Executive Vice President, Chief Legal Officer and Secretary of Reorganized WMI until July 31, 2018. Mr. Smith was also a member of the Board of Directors of WMMRC. From the Effective Date until May 2015, Mr. Smith served as Reorganized WMI’s Interim Chief Executive Officer. Furthermore, as noted above, Reorganized WMI and the Trust are parties to the TSA, pursuant to which the Trust has agreed to make available to Reorganized WMI certain services and employees as described therein. Pursuant to the TSA, Reorganized WMI has agreed to reimburse the Trust at a fixed rate per hour in exchange for Mr. Smith’s services as a former executive of Reorganized WMI. On July 31, 2018. Mr. Smith received a special cash bonus of $2.4 million, paid directly to him by Reorganized WMI. As disclosed above, Mr. Smith continues to serve as an Executive Vice President and Assistant Secretary of Reorganized WMI.

Ms. Logan

In addition to her role as an employee, Executive Vice President, Controller and Treasurer of the Trust, Ms. Logan was an Executive Vice President and Interim Controller of Reorganize WMI until July 31, 2018. Pursuant to the TSA, Reorganized WMI has agreed to reimburse the Trust at a fixed rate per hour in exchange for Ms. Logan’s services as a former executive of Reorganized WMI. On July 31, 2018, Ms. Logan received a special cash bonus of $50,000, paid directly to her by Reorganized WMI. As disclosed above, Ms. Logan continues to serve as an Executive Vice President and Assistant Secretary of Reorganized WMI.

(b) Review, approval or ratification of transactions with Related Persons

To avoid any potential conflict, the Trust’s governance procedures required Mr. Willingham to recuse himself from any decision of the TAB that relates to matters that involved Reorganized WMI. In addition, any applicable related party transactions that arise during the life of the Trust will be elevated to the TAB and/or the Board of Directors of Reorganized WMI, as required, for further consideration.

[iPrelude]

http://www.sec.gov/Archives/edgar/data/1545078/000114036113014726/ex10_5.htm

{ Employment Agreement between WMI Liquidating Trust and Doreen Logan, dated April 30, 2012, as filed with the Securities and Exchange Commission under cover of Form 10-K by WMI Liquidating Trust on April 1, 2013.
}

[stoxjock]

"Furthermore, and as discussed in more detail in Item 3 of this Form 10-K under “Mortgage Pass-Through Litigation”, the Bankruptcy Court has indicated that it will allow one Claimant to re-file its proof of claim as either a General Unsecured Claim (as defined in the Plan) or a Subordinated Claim, as determined by the Court, when recoveries become available to holders of Subordinated Claims. "

Who is this 'one claimant' they are talking about? TIA & GLTU!

[ron_66271]

Currently WMI Still Holds the Title of WMB.

WMI only released the Equity Interest in the Stock of WMB, not the Title. Yes WMI released all rights and title (control), but not the Title. That is what Doc #5885 is all about.


"WAAC and WMMSC are affiliates of the Debtor."

Because WMI still has Title to WMB, "the Bankruptcy Court has indicated that it will allow one Claimant to re-file its proof of claim" (MARTA) is valid until "the Final Payment" for "WMB and it's assets" is received, and the Title of WMB is transferred to JPM through the FDIC with the FDIC's payment.

Tranche 5 is now the active Tranche, which is the pay-point for WMB.

[stoxjock]

"Based on currently projected values for the Trust Assets, the amount of allowed and disputed Subordinated Claims and costs associated with administering the Trust, management currently believes it is unlikely that the Trust will make any cash distributions to holders of Equity Interests."

We will keep seeing the above Paragraph from WMILT for some time to come.. I am following AZCB's & RON66 DD and their Posts to us on this subject...theycan correct me If I am wrong

1. WMILT is Legally stating a true FACT as they do not have monies to pay these Claims "at this time"

2. WMILT doesn't have monies because FDIC hasn't Released those monies to it.

3. FDIC hasn't released because JPMC hasn't Paid for the Assets of WMB FSB yet.

4. JPMC hasn't paid yet as it wants to make some more money on the Assets before it pays FDIC???

5. We, as CLASS 19 & CLASS 22 Claimants will have to wait until then Steps 2,3, & 4 are executed & CLass 18 is settled concurrently.