Replies to post #38931 on Washington Mutual Preferred fka WAMPQ

[jhdf51]

Yes this is the biggy. My concern about further diluting common and/or P's which would not make me a happy fella.

5) DimeQ is a huge wildcard. IGNORE THIS FACT AT YOUR OWN INVESTMENT PERIL. Depending on how it is placed (as debt, or as equity) means either reducing the value of everybody, or just NewCo commons. This is HUGE. I can’t speculate further on what the court will do, or what the new mediation including DimeQ will do to this. But this ought to be on anybody’s radar as a huge unknown.

[radiumsoup]

Thanks for waiting to say all that - I wish I had held my tongue at first, but this is a fantastic analysis of the current state of affairs... as expected from you, of course. :)

[marayatano]

WithCatz, your thoughts (Subject: Liquidating Trust):

ARTICLE XXIII
PROVISION FOR TREATMENT OF PREFERRED EQUITY INTEREST (CLASS 19)
23.1 Treatment of Preferred Equity Interests: Commencing on the
Effective Date, and subject to the execution and delivery of a release in accordance with the
provisions of Section 41.6 of the Plan, each holder of a Preferred Equity Interest, including,
without limitation, each holder of a REIT Series, shall be entitled to receive such holder’s Pro
Rata Share of seventy percent (70%) of (a) subject to the right of election provided in Sections
6.2(b), 7.2(b), 16.1(b)(ii), 18.2(b), 19.2(b) and 20.2(b) of the Plan, the Reorganized Common
Stock, and (b) in the event that all Allowed Claims and Postpetition Interest Claims in respect of
Allowed Claims are paid in full (including with respect to Allowed Subordinated Claims), any
Liquidating Trust Interests to be redistributed; provided, however, that, in the event that, at the
Confirmation Hearing and in the Confirmation Order, the Bankruptcy Court determines that a
different percentage should apply, the foregoing percentage shall be adjusted in accordance with
the determination of the Bankruptcy Court and be binding upon each holder of a Preferred
Equity Interest. In addition, and separate and distinct from the distribution to be provided to
holders of the Preferred Equity Interests from the Debtors, pursuant to the Global Settlement
Agreement, and in exchange for the releases set forth in the Global Settlement Agreement and in
Article XLI herein, on the Effective Date, JPMC shall pay, or transfer to the Disbursing Agent,
for payment to each Releasing REIT Trust Holder its pro rata share of Fifty Million Dollars
($50,000,000.00), determined by multiplying (a) Fifty Million Dollars ($50,000,000.00) times
(b) an amount equal to (i) the principal amount of REIT Series held by such Releasing REIT
Trust Holder on the voting record date with respect to the Sixth Amended Plan divided by (ii) the

Preffereds looks like 70% of liquidating trust after Subordinated Claims are paid. (But the $ stops at H's, so I don't how subordinateds claims are getting paid). This is one fudged up DS/POR.

ARTICLE XXIV
PROVISION FOR TREATMENT OF DIME WARRANTS (CLASS 21)
24.1 Treatment of Dime Warrants: Commencing on the Effective Date, and
subject to the execution and delivery of a release in accordance with the provisions of Section
41.6 of the Plan, each holder of Dime Warrants shall be entitled to receive such holder’s Pro
Rata Share of thirty percent (30%) of (a) subject to right of election provided in Sections 6.2(b),
7.2(b), 16.1(b)(ii), 18.2(b), 19.2(b) and 20.2(b) of the Plan, the Reorganized Common Stock and
(b) in the event that all Allowed Claims and Postpetition Interest Claims in respect of Allowed
Claims are paid in full (including with respect to Allowed Subordinated Claims), any Liquidating
Trust Interests to be redistributed, each to be shared on a pari passu basis with holders of
Common Equity Interests; provided, however, that, to the extent that holders of Dime Warrants
are determined, pursuant to a Final Order, to hold Allowed Claims, and such Allowed Claims are
not otherwise subordinated to the level of Common Equity Interests in accordance with section
510 of the Bankruptcy Code, such Allowed Claims shall be deemed to be Allowed General
Unsecured Claims classified in Class 12 of the Plan and shall receive the treatment provided in
Article XVI hereof; and, provided, further, that, in the event at the Confirmation Hearing and in
the Confirmation Order, the Bankruptcy Court determines that a different percentage should
X:\NRPORTBL\US_ACTIVE\COLEMANE\43711321_15.DOC 60
apply, the foregoing percentage shall be adjusted in accordance with the determination of the
Bankruptcy Court and be binding upon each holder of a Dime Warrant.

Dimeq states pari passu w/ commons, but does NOT state after prefferds are paid to receive distribution, HOWEVER, after Subordinated Claims. It skipped preffereds to be paid. I find that very strange and disturbing.

ARTICLE XXV
PROVISION FOR TREATMENT OF COMMON EQUITY INTERESTS (CLASS 22)
25.1 Treatment of Common Equity Interests: Commencing on the Effective
Date, and subject to the execution and delivery of a release in accordance with the provisions of
Section 41.6 of the Plan, each holder of Common Equity Interests shall be entitled to receive
such holder’s Pro Rata Share of thirty percent (30%) of (a) subject to the right of election
provided in Sections 6.2(b), 7.2(b), 16.1(b)(ii), 18.2(b), 19.2(b) and 20.2(b) of the Plan, the
Reorganized Common Stock and (b) in the event that all Allowed Claims and Postpetition
Interest Claims in respect of Allowed Claims are paid in full (including with respect to Allowed
Subordinated Claims), any Liquidating Trust Interests to be redistributed, each to be shared on a
pari passu basis with holders of the Dime Warrants to the extent that Dime Warrants are
determined pursuant to a Final Order, to constitute Equity Interests or subordinated to the level
of Common Equity Interests in accordance with section 510 of the Bankruptcy Code; provided,
however, that, in the event at the Confirmation Hearing and in the Confirmation Order, the
Bankruptcy Court determines that a different percentage should apply, the foregoing percentage
shall be adjusted in accordance with the determination of the Bankruptcy Court and be binding
upon each holder of a Common Equity Interest.

Same with commons, states pari passu w/ dimeq, but does NOT state after prefferds are paid to receive distribution, HOWEVER, after Subordinated Claims. It skipped preffereds to be paid. I find that very strange and disturbing.


Thoughts? Looks like we share with commons/dimes and no regard to APR, other than may be the 70/30 split, (but really that 70/30 split is a 3 way split, 33.33/33.33/33.33 REITS/P&K/Commons/Dimeq)

I wonder if we are getting more shafted as prefferds.

imo

imo

[gophilipgo]

Catz, first of all, thank you for sharing your thoughts. Could you further expand on your sixth point:

6) There are three values to NewCo. One is the value of WMMRC is “run-off” mode. The other is the value of non-debtor subs. And the third is the ‘unknown’ future value of the Litigation Trust. {A forth value, a negative one on the balance sheets, is the loans from the SNHs to litigate and/or merge -- that is a negative value as draws against those loans occur - and a liability that is of a big concern to me, and to others I've spoken with. Do not underestimate this issue.}

From my quick reading of the POR, the loan is non-dilutive, so in that sense, it's a plus. The interest rates certainly seem to be high, so that poses a potentially big problem. What other potential problems do you and others foresee? If you don't feel comfortable sharing that with the board, no worries. (Or you could PM me if you're cool with that.)