Replies to post #38941 on Washington Mutual Preferred fka WAMPQ

[gophilipgo]

Ah, I perceived the loan as not being of the "death spiral" financing type, but I too, am not an expert on that, so I will trust your word and the word of others in the know.

If in fact it is, and I have no reason to doubt you, then we absolutely, positively have to get this changed. I've been invested in companies with "death spiral" financing before, and never once has it ended positively for shareholders. Frankly, if we don't get such provision removed, I'll feel very, very uneasy holding my shares.

[PickStocks]

The really "out there" (to a degree) worry is that we go 'dark' for some period of time in trading and in reporting, and simultaneously be burdened with the 'debt' -- approved by an unknown new Board of Directors, and we can't service that debt through revenue or merger -- and become, once again, cash-flow impaired, and start the whole bankruptcy process all over again -- and this time, the creditors are those who provided the loans.

Catz, I am more the information I obtained this from is not wrong, but we will not be trading on any major exchange or may not be reporting at all, but will be listed on the pinks for the short period. we will follow the same path as lehman's as they too came out of BK with a new company and new business approach.

It may take time to get all in place, but will be on the major exchanges sooner than later.

[Desperado90]

I've read the loan terms and IMO it's not dilutive therefore, cannot be death spiral loan. The main characteristic of death spiral financing is the issuance or reservation of shares to the lender.

I'm still skeptical about the 5% for the SNH because that could be the shares reserved to cover the loan but it's still not very clear to me.

Finally, I know you know this already. There's is a major difference between liquidity and assets. WMMRC has assets but might need some liquidity to get business going and start writing new policies and maybe start employing personnel and meeting payroll and the rest of what goes into start a new company.

If I were the EC, instead of starting from the scratch, they should immediately go into acquisition and merger mode.

[GO4AWILDRIDE]

CATZ

I was under the assumption that once out of BK that a company could not refile for BK for 7 years, is this correct?


GO WAAAMMMUUUU

GO SUSMAN

GO EC

[gophilipgo]

Okay, after reading the equity committee's support letter, it appears to me that some terms of the loan in fact are "death spiral" financing. 1% of the interest on the $125 million loan is payment in kind. This is a very destructive type of loan, and could mean very heavy dilution.

http://www.finweb.com/loans/understanding-payment-in-kind-loans.html

We need to get these terms changed.