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  • det_sherlock det_sherlock Nov 4, 2010 8:44 AM Flag


    Re-read Susman’s voting packet letter and found his mandate, so was curious to compare it with the Examiner’s mandate.

    One critical variable--TIMEFRAMES they cover.

    Examiner starts at settlement and moves to present. Whereas, Susman starts pre-seizure and moves to the end of the saga, when equity is treated “appropriately.”

    Think of the Examiner’s “report” as a necessary precursor to cleaning up this toxic spill. It provides a ‘version of events’ that is ‘palatable’ to the public and protective of JPM, in the interests of the financial “system.”

    As others have concluded, that leaves the FDIC holding the bag—for seizing a solvent bank [not “unsafe/unsound”], colluding, conducting an unfair bidding process, no effort to get an appropriate market price for WaMu, and the list goes on.

    The report promoted the myth that Dimon’s a hero, who only picked up the bank when it was placed in his lap, so that leaves Dimon the ego latitude to pay more—“without admitting to any wrongdoing”--and still make out well. Plus he’s gained two years of WaMu revenues to pay with. Along with her gov shield, Bair’s hammer is the “unfinalized” sale.

    Are the FDIC and JPM negotiating now? Recent “planted” articles about WaMu’s poor mortgage results say “yes.” Dimon, as usual, has elicited press allies to help make his case for buying “bad goods” to try to avoid paying more for them. The articles scream, “Come on, Sheila, WaMu wasn’t worth that much!”

    With Bair leaving in May, they probably want her to “take care of this” before departing.

    Say the FDIC and JPM arrive at a “supplemental payment” number. Judging by the way things have gone so far, we’ll never see it, and if we did, we wouldn’t like it. But we’re not negotiating for us—Susman is.

    So far the FDIC and JPM have managed to keep most of the dirt out of public view. But if they force Susman to take the next step, submitting an alternate POR, he’ll have to reveal the dirty laundry to “emphasize’ why his POR beats out v.6. Susman’s hammer is—proof of asset values, assets improperly conveyed, ‘outing’ hedge funds and shorting perps, collusion, and all that we’ve discussed for two years.

    If the “chambers” doc alone didn’t do it, once they get a glimpse of ALL that Susman has in his satchel, they will “come to the table” and Susman will be in a position of strength to complete the final phase--negotiating a POR that “treats equity appropriately.”

    No doubt Susman gave them a preview of what’s in store in the closed chambers meeting. After which we saw an acceleration—although few recognized it at the time. First, all parties agreed to an Examiner—huh?--then a short examination time frame, followed by the “looks good to me” results. A rush job—is everybody in a hurry?

    If we’re on a fast track, and if Susman’s “chambers maneuver” is any gauge, he may not even have to submit a competing POR. But if he does, I suspect it will be well received—since I’m sensing all the players are as eager to wrap this up as we are.


    —from settlement to present
    Show results of an examination of the:
    --SETTLEMENT component
    --RETAINED ASSETS component [other claims, assets, causes of action retained by debtors and/or proceeds thereof, if any, DISTRIBUTED to creditors and/or equity PURSUANT to the Plan, and claims and defenses of third parties thereto].

    --from pre-seizure to conclusion
    Excerpt, Susman-Godfrey Oct 18, 2010 letter [with voting docs], my caps added:

    “The Equity Committee is a FIDUCIARY representative of ALL WMI equity security holders and is CHARGED WITH:
    --investigating the circumstances GIVING RISE TO the Washington Mutual bankruptcy and
    --NEGOTIATING with the Washington Mutual debtors and various creditor constituencies towards a plan of reorganization that appropriately treats all WMI equity holders.”

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