Freilinger’s personal account of the “day zero” procedures coincided to the time line after the WMI BOD ratified (June 24, 2008) selling more than 50% of Washington Mutual (selling bad assets like Long Beach Mortgage) to TPG and it’s affiliates. This is not correct. WMI didn't "sell" anything to TPG. WMI raised capital by issuing shares to TPG. TPG became and investor, just like the other existing investors. I dont know what % they owned of the company after the capital raise, but I REALLY doubt it was 50% (who would give majority control to another entity?). That would have been considered a Change in Control.
Keep in mind that WMI BOD gave Bonderman et al a waiver to anti-takeover provisions on April 06, 2008. This gave Bonderman et al the opportunity to buyout WMI if it wanted to. I contend that Bonderman et al wanted to buyout WMI even before the infusion of the $7.2 billion cash into WMI on April 07, 2008. Not True. TPG did not have any right to buy out WMI. TPG had an antidilution provision that meant that any subsequent capital raise could not dilute TPGs position (issued new shares at a lower price than what TPG paid), or if so, TPG would get extra shares at no additional cost to maintain their ownership stake.
Remember David Bonderman was a director of WMI (thus having access to all the insider information with respect to WMI) since 1996 when Robert M Bass sold American Savings to WMI. Not true. Bonderman WAS a director for WaMu in the mid 90's and then quit or resigned. I think he had not been involved with WaMu for at least 5-7 years leading up to the TPG investment.
I contend that the "day zero" procedures included transferring assets from WMB to WMI non-bank subsidiaries (i.e. Thackeray Holdings Corporation in Delaware).
Can you clarify whether you believe that WMI paid for these assets?
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