Replies to post #34628 on Washington Mutual Preferred fka WAMPQ

[VivaLasVegas]

Well I follow the law of commonsense/fairness and the spirit of the law for which is was designed.
Not the LETTER OF THE LAW.

Because unscrupulous lawyers can tweek it for their situations which is the EXACT opposite of what laws were enacted for.

[clawmann]

Whether typical or not, this is, in fact, a bankruptcy case, and the same rules - including the absolute priority rule - apply unless and until there is a legally acceptable reason not to apply it. One reason would be if a higher priority class (e.g., a class of preferred) agreed contractually (as in a settlement agreement) to allow a lower priority class (e.g., commons) to have a bite of the lunch of the priority class. Personally, if I were a holder of TPS securities, I would not agree to this unless what I was giving up was not that significant and I really want to have the case over and done with quickly.

Soooo, I only see commons getting something under one or more of three scenarios:
1. a settlement agreement is reached giving commons a piece of the action;
2. the estate is valued substantially higher than it is now and the excess flows to commons after all higher priority classes are made whole; and/or
3. some or all of a priority class get knocked out of that priority because of some unlawful or unclean hands act and the waterfall consequently then somehow get to commons after the other priority classes are made whole.

They don't call it the absolute priority rule for nothing.