If Genworth can settle for less than the $834M with BofA, lets just say its 560M, how does that change the balance sheet when in flows thru the company, I'll assume its a one time payout.
That is still a lot of money, is that money held in reserves(loss) and a known amount, with no changes to current balance sheet, etc? Would the settlement of lets say 560M+-(less than reserves) actually benefit Genworth BS if the amount is already in loss reserves?
Assuming the amount of the reserve set aside is 834M and the settlement is for an amount less than the difference will go to the will go to the P&L (and EPS) as a favorable item. GNW has the cash to pay. Does anyone know the amount of the reserve that was set aside for this issue?
I am certainly no insurance expert, guru or CPA, Soule but my humble opinion on this potential settlement should resolve to the positive for GNW. Bottom line reasoning, it is less than the amount reserved by GNW for the suit resolution---hence leaving a positive balance---as opposed to the negative, requiring more cash reserved. Where this residual balance money will be placed in the BS presently or in the future resides with the decisions by the professionals employed at headquarters. I am certain they will have it categorized for maximum benefit as to their overall plan moving forward. What flexibility and opportunities they create--- remains to be seen.
Cheers that the street views these decisions as positive and their trade continues to support our SP ascent!
Have a great week end!
You and I are in the same camp, I think the overall settlement is good and less is more. Probably digging in to deep for the balance sheet, but thinking out the flow thru, I think this settlement is the next step in implementation of a dividend program, that is better news!
you are over thinking this sir, keep it simple. BAC was suing GNW for 834M.....GNW already has that money in reserve and ready to disperse. even if they pay 833M thats a positive for GNW. Same thing like JPM and BP . They over saved and thats cool. Monday we fly to the sky.