Replies to post #333598 on Mr Cooper Group Inc (COOP)

[clawmann]

Actually, IT is not quite out of her jurisdiction as she has - from what I've read - a variety of remedies at her disposal to penalize a member of the creds committee who engages in IT. She cannot put them in jail, and she cannot require the disgorgement of the IT profits, but she has some pretty potent equitable remedies that she can engage. The best of which is equitable disallowance of their claim entire; but I doubt she will go that far, but I do believe equitable disallowance or equitable subordination of some significant part of their claims is very possible.

BTW, this type of conduct by hedge funds who take over and dominate creds committtees and then continue to trade has been getting increasing attention lately. This is why, I believe, she jumped on Nate's IT allegations, which were based solely on pretty circumstantial evidence, rather than saying "Oh, Pshaw."
I think she was waiting for someone to raise this issue.

[russian roullette]

Look Judge when she first denied the POR wanted to find out if there is any truth to Nate's allegations. Now at this hearing she found out there is a good circumstantial evidence that these SNH committed IT. We all heard the same story Parker narrated, he has convinced us that under these difficult circumsatnces of these Hedgies hiding behind Lawyer Client privileges and not showing several crucial documents. Here is excerpt from closing arguments on page 226
<<the further reason why the Court should not be
7 imposing a strict requirement of proof of scienter at this
8 point goes back to the discovery problem that I mentioned
9 before. We were not allowed the opportunity to conduct the
10 kind of full discovery that we would have conducted in order to
11 establish the actual subjective reasons and processes that went
12 on within these hedge funds that underlie the trades they
13 engaged in. It is again, completely unfair in that
14 circumstance, which they brought upon themselves by the
15 positions they took in discovery, to get up here today and
16 argue that we have to have the kind of scienter evidence that
17 would be expected in some sort of a government criminal case.>>

Now Judge asked us to prove IT allegations and we did it as best as we can under these circumstances. There iS no way Judge can approve this POR. She knows the evidence is strong these guys were pulling the strings of the Debtors.

In my opinion Judge was convinced there was IT but she just wanted to clarify why SG asked to prosecute only 2 of these Hedge Funds because the evidence shows all 4 of them were guilty of IT.It makes her decision easier to throw all under the Bus than only two.

<<MR. FOLSE: We do request -- we put in there at the
25 time it was filed, I want -- this requires a little explanation
Page 233
VERITEXT REPORTING COMPANY
212-267-6868 www.veritext.com 516-608-2400
WASHINGTON MUTUAL, INC., ET AL.
1 because people have tried to take advantage of it, to suggest
2 that that means we do not believe that either Owl Creek or
3 Appaloosa engaged in insider trading, that's not true; we've
4 been very clear both at the hearing and in our briefing that
5 all four of them were in possession of material nonpublic
6 information, that all four of them traded in differing amounts
7 and at differing times, but traded while in possession of that
8 information. We have argued that as a basis for rejecting plan
9 confirmation.
10 When we filed the motion for leave to file the
11 adversary proceeding, we explicitly stated in there that we
12 reserve the right to ask for permission to pursue claims --
13 additional claims -- against the two parties that were named in
14 the proposed complaint at the time, as well as against other
15 parties. And to be honest, Your Honor, we wanted to see what
16 came out at the plan confirmation hearing. But Your Honor, we
17 do reserve the right -- and I suspect it's likely we have not
18 discussed this with the equity committee, one thing at a time,
19 it's an issue that obviously requires the Court to decide that
20 the case will be able to go forward at all -- but that is
21 definitely an issue we want to reserve on, and we may well be
22 coming back to the Court if the case is permitted to proceed,
23 with a request to amend it for that purpose.
24 THE COURT: All right, thank you.
25 Let's take a short break.
Page 234


The Judge has several things on her plate,TPS,STERN cases all have to be included in coming to a conclusion. I think she is being very careful and it is going to take some time. Meanwhile I am sure all parties are all still talking. If I were HF I would be spending some sleepless nights.