WMI's Chapter 7 Liquidation Plan
Bloomberg - Without the support of the bank bondholders, the entire settlement could collapse, Rosen told U.S. Bankruptcy Judge Mary Walrath. The judge must approve the settlement, which Rosen said will be filed by March 26 with the court as part of the company’s liquidation plan.
I approve. Bondholder Denke
It demonstrates that if the proposed plan is contingent on the WMB bondholder approval and if the WMB bondholders are possibly being offered much less than before (possibly seeing the $1.9 billion reduced by $1.4 billion), the WMB bondholders aren't going to be very happy with it.
It is possible that the $1.4 billion is just flowing through from WMI to FDIC (via plan to skim the tax refunds) to JPM but it could also be a straight reduction to the pool. It's very weird that JPM suddenly gets a new First Priority Claim on the FDIC-Receivership in what appears to be an exchange for the $500 million indemnity. Very bizarrely the NY Post story identifies that the government paid $500 million in legal bills for JPM in this case. SO, aren't they collecting $500 million for legal bills and then exchanging the claim (already used up) for $1.4 billion?
Quoting this section as it appears from the transcript of Rosen describing the proposed settlement:
" With respect to indemnity claims that JPMorgan may have your honor, against the
receivership and against the FDIC itself pursuing to its purchase agreement that it
entered into on September 25 of 2008. JPMorgan has agreed to give up its indemnity
claims back against FDIC corporate and it has agreed and the FDIC has agreed that
JPMorgan will cap its liability against the FDIC receivership in the amount of 1.4
billion dollars and that JPMorgan shall have a first priority claim against
receivership assets on account of that first priority claim, the 1.4 billion dollars.
That claim shall not be subject to any other offset or claim by any other party."
Doesn't this sound like JPM is going to take the first $1.4 billion in the Receivership? That reduces the price they paid from $1.88B by $1.4 billion... bringing it even closer to nothing. As well, that could seriously impact the WMB bondholders if JPM is busy draining the limited funds that are available. Am I misreading this? If I am correct, no wonder the WMB bondholders will be objecting to this settlement!
I think this was designed to be a dead duck right from the start.
They have been able to say in the press that they have a great settlement, now its not news anymore.
The deal will be replaced by a new one, but that information will not spread through the media.
Their reputation will remain solid and their shareholders will not object.
Chapter 7 is for insolvency. We at WMI, Inc. are solvent. EC approval proves this fact. NOL and cash deposit proves that A>L.
US trustee knows this fact. The Judge agrees with this fact when she smiles at Rosen's frivolous arguements.
Chapter 7 is no where in sight. You and your speculation is false. Not going to happen.
As a long-term shareholder of WAMU, when I first invested in WAMU more than 10 years ago, it was my understanding that I was purchasing shares in WAMU, the bank, not WMI, the holding company. Without the bank, what is left? I don't see WMI emerging from bankruptcy with anything for the shareholders. Sorry, just IMHO.
Drafting WMI's Chapter 7 Liquidation Plan.
1. Re: Second Motion extending exclusivity filed
"...this would happen. WMI can't file a reorganization plan when it has nothing to reorganize and major litigation pending. I maintain that no plan will be filed because..." - bopfan 23-Apr-09 02:09 pm
2. Re: Motion to Extend Exclusivity
"...because there'd be no reorganization, just a Chapter 7 liquidation. There'd be nothing to reorganize as I've said before.)Don't forget Judge Walrath. She has..." - bopfan 14-Jan-09 07:05 pm
3. Re: Bofan, what happen to WAMUP when WAMU reorg
"...s business has been gutted by the seizure, so there's really nothing to reorganize. I believe the company will be sold." - bopfan 21-Nov-08 08:56 pm
4. Re: Payout for commons
"...JPM is obviously trying to buy WMI (why else would it be heavily involved in the case) and (2) there is nothing to reorganize." - bopfan 15-Nov-08 02:47 pm
5. Re: Bopfan, what is your take on today's action!!
"...formulate a plan to rehabilitate its enterprise to prosperity. In WMI's case there is nothing to reorganize because it was eviscerated by the seizure. This case will result in a..." - bopfan 14-Nov-08 06:50 pm
6. Misinformation About Common and Preferred in Liquidation
"...of reorganization. However, THERE WILL NOT BE A PLAN OF REORGANIZATION because there is nothing to reorganize -- i.e., the seized assets were the business. If a genuine effort..." - bopfan 12-Nov-08 11:27 am
7. Re: Could see $100 by end of Dec
"...of reorganization. However, THERE WILL NOT BE A PLAN OF REORGANIZATION because there is nothing to reorganize -- i.e., the seized assets were the business). If a genuine effort..." - bopfan 12-Nov-08 10:58 am
8. Re: Don&&39;t get carried away, still a big bet.
"...In the highly unlikely event that a reorganization will take place (there is simply nothing to reorganize!) the preferreds would probably be impaired. The chance of such a reorganization..." bopfan 11-Nov-08 02:45 pm
9. Re: Worst scenario
"There is nothing to reorganize. The company was eviscerated through the asset seizure. The remainder of..." - bopfan 6-Nov-08 11:42 am
Drafting WMI's Chapter 7 Liquidation Plan.
I wish I hadn't read this. I really hope that someone misspoke when saying liquidation instead of reorganization. Changing to a ch 7 would really suck. I hope that's not the reason why Joyce appears to be frantically pushing for a shareholder meeting and new BOD members. I really wish they or Venable could talk to us.
Thanks for ruining the rest of my day.
Search - "nothing to reorganize":
You were informed 14 times!
Bopfan said it first, "nothing to reorganize".
November 6th, 2008, at 11:42 a.m.
GLTA - Denke Garry