The WMCT 2001 prospectus tells us that "The preferred securities [the "Piers"] represent an undivided beneficial interest in the assets of Washington Mutual Capital Trust 2001, which consist solely of subordinated debentures issued by Washington Mutual." see https://www.sec.gov/Archives/edgar/data/933136/000091205701521510/a2050803zs-3.htm
What is a debenture?
Debenture Definition - Investopedia Search domain www.investopedia.com/terms/d/debenture.asphttps://www.investopedia.com/terms/d/debenture.asp What is a 'Debenture'. A debenture is a type of debt instrument that is not secured by physical assets or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond to secure capital. Like other types of bonds, debentures are documented in an indenture.
So basically the Piers were sold to investors , a little over a billion dollars cash was raised , and in exchange for that cash WMI issued its unsecured notes and then later funded the trust with funds to pay interest on those notes which then made its way to the investors. I assume the full billion dollars cash was transferred to WMI and was used as working capital, to fund loans to subsidiaries, make loans, buy securities and remained assets of WMI. WMI's obligations under the debentures was discharged per the terms of the por and are worthless and do not generate any "continuing" income for the trust. See Por Section 32.4. So the assets (the debentures) went poof. Now if not all the billion dollars was transferred to WMI, in all likelihood the money was transferred upon the effective date to the Liquidating Trust. Wells Fargo was the trustee and if you look at the first QSR you will find this entry Transfer (to)/from Wells Managed Account - - - - - 493,835,752 see. http://www.wmitrust.com/wmitrust/document/8817600120525000000000002
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