Replies to post #34829 on Washington Mutual Preferred fka WAMPQ

[Lawrence 147]

We have to assume that the other members on the EC exercised such simple logic as well by rejecting Willingham's 'rob peter to pay paul' proposal b/c the other side of the deal would give more money to preferreds.

First off who is to say that Willingham’s efforts were to ‘rob Peter to pay Paul’. Could we reasonably assume his intentions were to get the HF guys to at least cough up enough money to get the equities in the money no matter what all the while knowing it would be turned down by the PIERS? This would actually give control of the case to equity and should be enough to cause the FDIC and JPM to add to the pot enough to basically admit and more importantly be perceived as guilty?
I see it as more or less a negotiating tool. I am sure you heard about the guy who offered a woman a dollar to have sex with him and she of course turned him down. Then he offered a million dollars and she jumped on that offer.
Well the first offer was get it as cheep as possible then the second was to make sure she was in the market, when it was established she was in the market thatswhen the negotiations began.
Don’t be getting all piss off at Willingham when you don’t know for a fact why he did what he did, he has established they are in the market.

[MrchntDeth]

Tne 0-1% payout for the Preferreds in POR 6.5 is a non-starter. Any REAL evaluation placed on WaMu with real numbers and not any of Rosen's phoney-baloney numbers will show that the Preferreds are the fulcrum security, and that we'll be receiving way more than the 1% number that Rosey tossed out there.

Now, if we assume that the above is true, game theory would suggest that I, as a holder of P's and NO U's, would rather have ALL of the residual go to the Preferreds, and NONE of it going to the U's.

Why share with the U's when there is no basis in law or fact to support giving commons even a single penny, at the expense of the Preferreds? Also known as the great haircut.

Now, as someone suggested last night, I would have no problem at all in giving the commons a long-term, way out-of-the-money warrant on the emerging stock of NewCo, but that would be it.

A 10 year out of the money warrant would take into account the possibility that IF the NewCo increased in value (using the NOL's, mergers, etc.), any common that the P's received would bring our valuation close to FV for us. Let's say at around the $7.5 billion capitalization point. And it would be AT THIS POINT that common should start "sharing" in the pie. But not before Preferreds are made whole (or at least close to it).

That's my 2 cents. I'm ready to get flamed by all the holders of U's that think that we should socialize their losses because "it's the fair thing to do."