Replies to post #329466 on Mr Cooper Group Inc (COOP)

[gyspsy]

WC, what really get's me incensed is that we are only talking about the IT issue, they seem to be the benefactors for sure, also having made tons of monies trading!
I know you said it's the Debtors/WGM.

BUT what about the 3.1a (scrivener's error my foot! why wasn't this corrected a loooong time ago?)

Illegal transfer by FDICK and subsequent sale of WMI (holding Co's assets) by JPIG!

Nobody seems to be talking about this anymore.

Comment?

GYS

[maekuz]

It seems the APR violations included cases were equity holders were part of a settlement as per this document.

It states (see abstract, p. 2):

The U.S. Chapter 11 bankruptcy system has long been viewed as debtor friendly, with
frequency of absolute priority deviations (APD) in favor of equity holders commonplace, as
high as 75%, before 1990. In the 1991-2005 period, we ¯nd a secular decline in the frequency
of APD to 22%, with the frequency as low as 9% for the period 2000-2005.

Yes, i think that (9 %) would qualify for "rare". And that is before In re Armstrong World Industries, Inc.

But, I found a some PPT-slides stating that in 81 % of the cases equity got a payout (see p. 25).

I dunno. I think its means those things happen(ed).

[radiumsoup]

I was also going to point out that the examples given (second link) are related to creditors and don't mention equity except in passing, but the basic attitude would apply to both, I think -

I read that article (which was very good, I might add, not to mention objective) this way:

As a rule, any POR must follow the absolute priority rule unless someone who has a stake in recovering money voluntarily gives up a portion of their right to collect in order for another party below them in priority to recover... but even still, that plan must still be weighed in its entirety against the criteria for "fair and equitable/reasonable" even if all parties agree to the violation of APR (I like that acronym, Catz, I'm gonna use it now, thanks...). In regards to pre-POR settlements, even then the court must apply APR in all circumstances if a senior creditor (or, by extension, preferred classes of equity) objects to the settlement.

In other words, if a settlement comes out prior to a POR which provides money to Commons without the consent of Preferreds, the court is required to deny the settlement on the grounds that an impaired class (Preferreds) objects to the settlement, *unless* the court also finds that the settlement is fair and reasonable given the totality of circumstances, which is apparently a high bar.

If a settlement comes out prior to a POR which provides money to Commons with the consent of Preferreds, the court should still review the settlement to ensure the impaired class is not voting in collusion with another party for some other reason, and to ensure the Prefs are not being treated unequally even with their consent.

Seems pretty clear, to me at least, that according to the 2nd Circuit, the APR applies even with a pre-POR settlement where preferred equity might be asked to give up more than would be fair and reasonable. For instance, say there's $3B to go to equity... if the settlement stated that $1B would go to WAMPQ and $2B would go to WAMUQ, that's not fair and reasonable, even if WAMPQ holders voted in favor. But $1.5B to P and $1.5B to U might be considered fair, according to the rule and spirit of the APR.