Bopfan posted on yahoo that one reason they made this deal was to keep A > L so that they could wipe out equity in the reorg, which seems to be the goal of WMI:
"At present WMI's assets (including the $4B) are listed in the MORs at $6.7B or so.
We now know that WMI has already received $3 billion of its tax refunds, and is awaiting another $2.6 billion. Even if we did not have the $4 billion deposit, $2.7 billion plus the $5.6 billion is $8.3 billion or A=L. Accordingly, when the next tax refund comes in WMI will definitely be at A=L.
We now see why JPM has been fighting to keep the $4 billion and part of the tax refunds: if it can keep either, both, or part of each it can perpetuate the fiction that A<L.
By preventing Judge Walrath from ruling yesterday JPM and WMI kept A at roughly $5.7 billion. They can't prevent the IRS from sending the remaining $2.6 billion to WMI, so A will be $8.3 billion shortly no matter what happens in litigation. If Judge Walrath had awarded the $4 billion yesterday A would be at $12.3 billion within weeks, a devastating blow to the forces that want to argue 'hopeless insolvency'.
Since recovering the deposit would help equity, WMI is in the ridiculous position of conspiring with JPM -- an ostensible adversary -- to let JPM keep WMI's money.
Fortunately, the court knows exactly what is going on. However, it is still incumbent upon Venable to make the case that whatever plan WMI files (which will undoubtedly jettison equity), Venable's plan (which will hopefully be filed on or near the 61st day after 3/26) better reflects the equitable and legal policies of Chapter 11. "
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