"By the time the EC figures out the NOL's may go out the window, equity will have already voted for the plan, and there won't be any backing out, because it's to [sic] late at that point, hence the second death trap.
NOL's shouldn't hold up confirmation."
I think that I know what you mean. That's why I had made the disclaimer about being neither a Bankruptcy Attorney nor a Tax Lawyer.
I am but a simple Caveman Lawyer (and a country bumpkin from Dallas). Your tricky bankruptcy rules and extremely lengthy documents frighten me. These are not the simple straight-forward issues that I confront in my practice on a daily basis:
Beyond a Reasonable Doubt, maybe a little Sympathy for the Devil, but my God! This Chapter 11 business is totally incompressible to me. That's why I appreciate your enlightening me about this stuff - I'd be so screwed if I didn't have people like you to show me how these things work.
Hell, I almost got PANTSED by buying the PIERS at a "cheap price" (only to watch them keep getting cheaper and cheaper and cheaper). All I did just the most cursory research when I looked up the term "contractual subordination" and I realized how SCREWED anybody would be by buying this Toxic, Radioactive Piece o' Crap. To top it off, the H Trustee just rolled over and played dead (instead of negotiating during the Mediation to get the Sr. Bonds to agree not to pursue CR-FJR, in exchange for the H's not holding things up). Now, the H's are circling the toilet bowl, and another tug or 2 on the handle should be enough to flush these turds down the sewer (where they belong). I can't imagine how the poor schmucks that bought this garbage at any price above today's prices must feel. In fact, I seem to recall that when the H's took their first big plunge last year, I predicted it would go to 8 bucks a share - and look at this now - you wanna talk about a Death Trap?! Jesus, this thing is out of control. And I SO lucked out in not buying this wallpaper. I'd rather be lucky than to be good (and/or smart).
Pity the poor Bastards that bought this piece of Ca-Ca. Well, at least there's always the end of year Tax Selling. Write this thing off, sorta like with the unrestricted NOL's that NewCo will have. Just make sure to watch out for that tricky Wash Sale Rule. I think of the Wash Sale Rule as the little investor's version of IRC Section 382, except that with a Wash Sale, one can ultimately capture the tax loss; it just gets deferred, instead of vanishing (Section 382 style).
382 NOL's just go poof, up in smoke, as you seem to indicate, and the EC is gonna get PANTSED, gonna get PUNKED, when they realize that NewCo will INSTANTLY lose about $2 billion dollar in value after they come to realize that the IRS is gonna yank away $5.4 billion dollars in unrestricted NOL's if/when the Dime Ltw's get thrown into the Common Stock Short Bus, pari-passu or otherwise.
Talk about the Law of Unintended Consequences! I would kill (metaphorically, of course), to see the look on the EC's faces, the look on Rosen's face, once everybody realizes (after the fact), that Rosen (inadvertantly or otherwise), managed to F them in the A one more time, all because of a little pride, a little arrogance, a little hubris on the part of Rosen, in refusing to pay Steinberg to go away, AS FAR FAR AWAY from WaMu as possible, even if WMI has to pay the full $337 million set aside in Escrow, as well as paying all of Steinberg's legal fees for representing the entire class of Ltw's. This has truly been a job well done, as he has managed to B-Slap Rosen, et al. every step of the way. And it would be the Ultimate B-Slap if everyone were to suddenly realize that the sub-sub-sub-section under Section VIII of the DS, could turn into a "slight" problem if Rosen persists in trying to get the Ltw's to "Join the Crew" (new NewCo stock style), instead of just paying the Dimes what they've been owed, and wrap this thing up before you have yet another Confirmation Hearing getting Eff'd up at the hands of Rosen and WG&M.
That would NOT be good for WG&M. That little sub-sub-sub section under VIII was put in there for a reason. Words have meanings, and as we've discovered in the Adversary Hearings, contracts are generally construed against the drafting party in cases where ambiguity exists. Why put the reference to the Unrestricted NOL's getting torpedoed under Section 382 (IRC), if it really doesn't come into play with the Ltw's getting stock in NewCo AFTER the Effective Date? Why discuss it at all? To bill a couple fractions of an hour of billing? Makes one wonder why it's there.
But as I said, I'm just going on Caveman Lawyer Rules, and I am very much like Chiroc, the O.G. Caveman Lawyer: I may not know much about your bankruptcy and tax law rules, and I may not be familiar with the ways and customs of these Equity Committees on which you currently sit, but I do know this:
Pay Art now, or pay Art AND the IRS A LOT MORE later.
Again, simple Caveman Lawyer Rules. I hope that you'll go easy on me. But at least give me a little bit of credit for not being stupid enough to try to ride the PIERS bus. That's gotta be worth a little something, no?
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