Tantrum Griffin confirms that the underwriters received 72K of class 19 escrow markers.
9. Furthermore, while it is true that a holder of $72 million face of Preferred Equity Interests who
granted a timely release would have received approximately 1.4 million shares of Reorganized Common
Stock,5 such stock would not have come from the Disputed Equity Escrow.
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It is interesting that WMILT called class 19 claims so that they can sneak in the underwriters claims, when in fact class 19 is equity.
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The following from Tantrum Griffin is interesting, whether it is true or not. WMI has never released the FDIC-R but we did through the release.
G. WMI Did Not Release All Its Claims Against the FDIC Receivership
31. In its response to the Objection the WMILT states that Griffin made a representation “in the Griffin
Objection that there is an additional $10 billion of assets available to the Debtors’ creditors and equity
interest holders.” (Footnote omitted.)
32. What Griffin actually said was that “f the WMILT recovers more than $10 billion, [the
Underwriters] will receive more than 100%” of $72 million. However accurate, it might be indecorous to
call the WMILT’s attribution to Griffin a lie; nevertheless, as the WMILT has opened the door to the issue
of possible recovery sources and the issue has direct bearing on the possible benefit to the Underwriters
(and loss to Class 19), the issue should be discussed.13
33. Section 1.183 of the Plan is the definition of ‘Released Claims’.14 It excludes claims the WMILT
has against the FDIC Receiver “solely with respect to the Receivership”. This carve out is what WMI and
the FDIC Receiver and FDIC Corporate (both of which were signatories to the GSA) agreed would remain
with WMI after it released, inter alia, its avoidance and Fifth Amendment claims. Obviously, the WMILT
has to establish that it has a right to payment and the value of its claim; it’s simply that the FDIC
Receivership has waived its power to challenge the facts giving rise to the claim. In the event the WMILT
can establish that the FDIC Receiver owes the WMILT payment under Section 1.183 and the FDIC
Receiver refuses to pay, the WMILT can bring a claim against the FDIC Receiver in the United States Court
of Federal Claims (i.e., for breach of contract). (By contrast, members of Class 17A and Class 17B and
other creditors of WMB have recourse only to assets in the WMB Receivership waterfall.)
34. While discussion of the potential WMILT claims against the Receiver for Mortgage Backed
Securities and the links of the Receivership to the WMILT waterfall are beyond the immediate scope of
this Reply, Griffin reserves her rights to brief and address those issues should the Court wish to consider
them as material to the resolution of the Griffin Objection.
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MY TAKE:
Tantrum Griffin will go after the FDIC-R next and this potentially brings back more than 10B to escrow and because the UW are in class 19, they will be paid more than 72M.
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