Replies to post #118683 on Mr Cooper Group Inc (COOP)

[byrddog]

"Why did the banks debt not transfer with it when it went to receivership?"

Sculelos, I believe that this question was answered by another poster already. I will go back and look for it. It is my understanding that the bonds (debt) are the responsibility of JPM if they are not deemed worthless through BK proceedings. JPM purchased assets AND debt for the 1.8bil, therefore, bond debt would be inclusive in the purchase. If JPM thought they bought only the assets and not the debt, they will be in for a RUDE AWAKENING!!!

[Dragynn]

Why did the banks debt not transfer with it when it went to receivership?

That's the 50 billion dollar question my friend. That is part of the heart of this case, it all boils down to two things in general IMO. 1. An improper seizure 2. An improper sale

The FDIC press release about the sale:
http://www.fdic.gov/news/news/press/2008/pr08085.html

"JPMorgan Chase acquired the assets, assumed the qualified financial contracts and made a payment of $1.9 billion. Claims by equity, subordinated and senior debt holders were not acquired."

Why the heck not? How are you going to put up what is supposed to be a "failed" bank for sale, and allow someone to cherry-pick only the good stuff?

This is part of what is wrong with the system, the FDIC only exists allegedly to insure and protect depositors, and that they can do, but someone other than they and the OTS needed to have been involved here, because in the larger picture, thousands of investors were wiped out, jobs lost, and the entire U.S. economy brought to the brink of cataclysm by an inept knee-jerk move by a lesser bureaucrat.

[rattlewatch]

It is my understanding that WMI will not be liable for any of the bonds since they where issued by the bank and if the bank will not redeem them the bond's are essentially worthless.

That's the way i see it ,It's the FDICs fight with the bank bondholders. WMI is suing for its other assets ,along with fair value for its 100% share ownership of the banks.

$4B cash
$10B suit against JPM
$13B suit against FDIC (DC court)
$2-3B tax return
NOL value;

Here's an interesting thread about the NOLs started by Gibson a few days ago on the other board:

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=86316&tid=275358&mid=275358&tof=35&rt=2&frt=2&off=1

[linda1]

"Only thing WMI is liable for currently is it's secured debt which comes to 8.3 Billion with H's included and it's preferred shares which total 3.5 Billion, which includes the K and P shares."


Is WMI liable for the preferred shares - wamkq and wampq?


I thought these shares were considered equity and not debt like the capital trust shares - wahuq.


Is that not why preferred and commons are often cancelled in bankruptcy so a company can reorganize and emerge from bankruptcy with some assets?


Can anyone answer these questions for me?