Replies to post #39511 on Washington Mutual Preferred fka WAMPQ

[marayatano]

I am unaware of other cases because I have not followed them until the end since it resulted in a waterfall that NEVER reached lower tiered securities, however, the 70/30 split was a "proposal" as indicated by the EC Q&A. Keyword being "proposal".

The settlement resulted in a resolution of SNH disallowance claims, however, the "proposed" 70/30 split was not settled, otherwise it would have fixed and the word "proposed" would not have used, nor would have the EC or the Debtor include verbiage of the possible change in the "proposed 70/30 split.

So, settlement is concrete, however, 70/30 is still up in the air. So, since the 70/30 is "proposed", then APR is still up in the air. This infers that not everything has been settled and agreed to. Yes, APR is used as a template and is flexible in a settlement, however, there is still a priority.

As for the GSA not being changed by Walrath, all parties were in agreement and all distributions were "fixed" and accounted for. Not so with our settlement.

So you know, I do not believe commons will be zero'ed out, their releases are needed.

You should ask you attorney friend since he is in the legal field and has a stake in WMI securities. Tell us what his response is.

imo

[WithCatz]

jack, perhaps the question isn't so much "has this specific unique situation occurred before"... eg, the whole pref 70/30% adjustment being possible.

The correct question, to me, is - has a plan been modified by a court, when the plan provides such flexibility.

The answer, is YES. We heard this in prior Disclosure Statement objections -- objectionable, specifically, because the prior plans had no flexibility for the court -- eg, the past 2 plans that made it to Disclosure Hearings/Confirmation Hearings were highly inflexible -- allowing for NO adjustments by the court. All the court could do is reject them, state why, and wait for another round of it all.

{In fact, the irony is, had the debtors not 'overreached' a bit on the prior plans, concurrent with having no inflexibility provided to the court, we may have been confirmed by now.}

So, whether or not "this" kind of adjustment had been done before isn't the question for me. It's whether it CAN be done, if given the flexibility -- and the clear answer is yes, a court can -- and does -- to avoid another delay in confirmation.

...Catz

[clawmann]

Jack: I'm not specifically aware of any other case, but that does not mean it has not happened. In fact, I am pretty certain that judges have often required changes to proposed distributions in PORs submitted by debtors, especially if the judge believes APR requires it and there is no agreement between/among the affected classes agreeing to a deviation from APR.

We should recall that Weil - unlike your attorney friend - is (whether we like them or not) the premier bankruptcy law firm in the US, and they must believe that it is acceptable for the POR to give the judge the authority to change the distribution if she concludes that the law requires it (as she might if she can find no basis to conclude that the prefs consented to the deviation).