WAMUQ -- Your Guide to Early Retirement

[kuwlness]

Objection of the Consortium of Trust Preferred Security Holders to Debtors' Motion for Approval of Disclosure Statement for the Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code

http://www.kccllc.net/documents/0812229/0812229100511000000000004.pdf


From Mordicai:

"This is great news for the preferred p's and k's. Besides the fact that they are taking the gloves off against Rozen, they are taking the position that they are still the owners of the cayman's and that there could be no conditional exchange given the filing of the chapter 11. This means they go after the trust assets which are in the possession of jpm and actually constitute the individual investors security, while we are/ will be the receipient of the nol tax refunds without having to share with them. The p's and k's just went up substantially in value in my estimation. GLTA. This is the best read to date of all the legal filings. I trust the ec will soon follow suit."

 

[PeterGriffin]

Anyone still following this case? It looks like the FDIC signed off on Rosen's amended POR today. It will be interesting to see what Walrath does with it.

Exclusivity ends on the 26th which means competing PORs can be submitted after that date. However, Rosen et al. haven't been giving the EC/Susman the documents they need, so I don't think there's any way they can submit one.

I know a lot of people think Rosen is an idiot, but this just shows how shrewd he is, IMO. I think he's managed to stay two or three steps ahead of the EC the whole time.

 

[snoop]

Wamu = R.I.P

 

[kuwlness]

Some recent words from Mordicai:


"That is not the proper thinking. Even if the fdic signs on by friday and the disclosure statement were approved, that doesn't mean the plan will go through. Still plenty of arguments to be made to defeat the plan. Read and re read the objections by all the parties. The plan is defective on legal grounds."


"Rosen can handle the appeal itself, all it is a cut and paste job from what was already argued in his legal memo against the motion. Don't you expect the ec will have its own expert at that hearing? Now how can the debtors expert evaluate the success of pending litigation when the debtors did not even conduct the necessary discovery that the court gave them the go ahead to get? Posters should think of this disclosure statement as nothing more than the first offer in the process. The debtors plan violates the law in many respects, and an equity court must follow the law...that is the first maxim of equity."


"Footnote 7 in particular says it all. This has to be part of the criminal aspect of the case and it speaks to recovery. I know nol refunds exist, a capital loss exists, and a pool of mortgages secure the Caymans. I don't know what else exists because of the fraud. That is why I am in p's and k's. I can value what I have, not what I think I might have."


The way I look at it, the fdic has to give in on not giving equity a dime. The preferreds are a hybrid of debt and equity and this is why the p's and k's will recover but am not so sure she will sign on to anything for the commons. Did you read the footnotes in the link I cited this morning? It says it all."

-- http://www.kccllc.net/documents/0812229/0812229100511000000000004.pdf

 

[BigDon]

Not exactly sure what the heck happened yesterday ? Anybody have an opinion ???

 

[PeterGriffin]

Not exactly sure what the heck happened yesterday ? Anybody have an opinion ???

I don't think a heckuva lot happened, but all in all it was probably a good day for equity. The DS ruling was delayed, which probably doesn't matter much either way, but the big issue, the request for an Examiner, was also delayed.

The thing that confused me was the Examiner ruling, because Walrath said something like 'I can't rule on the Examiner now because it's under appeal. Withdraw the appeal and file a new motion, then it can be ruled on.' However, it sounds like the issue is now with the 3rd circuit, not in Walrath's court? I honestly have no idea what that's about, if they make the ruling, or if they simply sign off on something and then Walrath makes the ultimate decision. If someone has more info on that, please pass it on.

I think people took that as very positive because they thought she was saying that she couldn't rule in their favor right now, but just file a new motion and then she would sign off on it. There's no way I'm going to assume that and I think that's reading way too much into her words, but at the very least I think she seems to at least be open to reversing her initial decision that denied the Examiner.

I also think a lot of people think it's as easy as them resubmitting the paperwork and her signing it, and that it will happen almost immediately. I think this is yet another case where people are going to be disappointed, because I HIGHLY doubt there will be a definitive ruling on the Examiner anytime soon. Remember, everyone thought the $4B SJ was imminent and that was what, 7 months ago?

The other thing that people took as a positive is that, for the first time, she really took Rosen to task. I think she FINALLY gets it that he is not looking out for equity. She said, on numerous occasions, 'you are supposed to be on the same team,' or something to that effect. She seemed to be calling him out, even if it was subtle. He actually had to take a 5-minute break and regroup at one point, which I thought was pretty funny.

The Examiner issue is a bit of a head-scratcher to me, to be honest. Sure, IN THEORY it sounds good for the EC, because then they will have access to all the goodies. Here's the problem though -- does anyone HONESTLY think JPM/FDIC is going to just hand over documents that will bury them? Seriously? The corporation that essentially STOLE a bank, with the help of the government, is going to become ethical all of the sudden, to their own detriment? I think there is ZERO chance of an Examiner or the EC ever seeing any meaningful docs. They might get the ones that JPM is ok with them seeing, but they won't ever get anything that could harm JPM. Remember, there have already been reams of 'blacked-out' documents submitted to the court, so they obviously have no problem with blatant cover-ups.

Some people are saying JPM would have to settle if the Examiner gets approved. Why? It's a lot easier to just destroy the evidence and save yourself potentially billions of dollars than it is to throw your hands in the air and say 'Uncle!' Sure it would piss the court off, and it would make it virtually impossible to get their POR approved, but how would the EC prove valuation numbers without the docs they need? I wouldn't be surprised if all of the meaningful docs have been to destroyed, to be honest. Maybe there is another way for the EC to proceed without those docs, but the way they are acting now it is essential for them to have access the docs to have any kind of a case.

I still think this saga is going to go on for a very long time, but at the very least it's getting interesting now...

 

[PeterGriffin]

Wow. Sorry about that -- I had no idea I wrote that much!

 

[BigDon]

thanks for the insight.... I would like to see this be over but on the other hand it could take a long time.......

 

[PeterGriffin]

thanks for the insight.... I would like to see this be over but on the other hand it could take a long time.......

Don,

That's just nothing more than my opinion. If you asked someone else, they may see it in a completely different light. And in case it isn't apparent yet I tend to look at things in a skeptical light, but given the circumstances of this case I am VERY skeptical about this one in particular. I mean, the reason this case is before the judge in the first place is because of widespread corruption. I think it's a bit naive to think there can't, or won't, be more corruption during the case itself.

As for the length, it would be great for it to get wrapped up soon, but I just think there is too much out there for there to be any kind of a quick resolution. If JPM even considers settling (which I'm not sure they will), it won't be until they are absolutely certain they are cooked and have no other alternative. Considering we still have the shareholders meeting, the possible election of a new BOD, Solomon's valuation figures, possible Examiner appointment, $4B SJ ruling, and numerous motions, appeals, delays, and hearings where nothing gets accomplished, I think we're still a long ways away.

My WAG has always been that it will take 3-5 years to see any kind of resolution. That would take us to almost 2012, at the earliest. I know that probably sounds outrageous to some, but in the first 20 months there has been a lot less accomplished than what needs to get accomplished now, so I think it's a real possibility. I'd like to be wrong though...

 

[kuwlness]

Interesting things brewing over here ... i have a feel we might be in store for another big run. This has been as much as a 600% ROI from my initial call to buy at .10 and if you road it out thru the ups and downs you're at a 75% ROI and coming up on long-term capital gains. Congrats to those that have held.

I for one have continue to accumulate in the low teens. Lets get another run to .70 next month : )

 

[efresh]

I noticed that every entry position must always pull back in some way...i wonder why it does that. Messes with my emotions men...

 

[BigDon]

UPDATE - US judge appoints WaMu examiner; shareholders win

 

[BigDon]

Peter, I sent you a PM BIGDON

 

[BigDon]

wow. Sorry about that -- i had no idea i wrote that much!

lets try this again--peter i sent you a pm--thanks bigdon

 

[tiznow]

I'd have to rate this thread title as kuwl's best of the bunch

essentially sucked people in for 2 years and than in one day any positions opened during that time frame...and still held are now heavy underwater....

buy some pink sheet stock for early retirement that's essentially equivalent to saying go play some roulette at the casino for early retirement....

 

[tanner12oz]

i agree this is dragging on forever....talk about dead money

 

[guitarjosh]

http://www.bloomberg.com/news/2011-...-shareholders-on-post-bankruptcy-control.html


WaMu, Creditors, Shareholders Said to End Bankruptcy Fight
By Steven Church and Linda Sandler - May 20, 2011
Washington Mutual Inc. (WAMUQ) and its biggest creditors agreed to settle a fight with shareholders by giving them equity in the company that will emerge from bankruptcy, two people familiar with the proposal said.

The outline of the deal includes $25 million for a litigation trust that would bring lawsuits to collect more money for shareholders. In return, shareholders would drop allegations that hedge funds who own $2.54 billion of WaMu’s debt used confidential information to guide their investments.

Washington Mutual shares rose as much as 90 percent to 7.9 cents in over-the-counter trading.

How much the deal is worth to shareholders can’t be easily calculated because the value of the reinsurance company they will get a stake in relies in part on future tax breaks, said one of the people, who declined to be identified because the discussions are private.

“That is impossible to assess,” one of the people said.

Shareholders are among the last opponents to WaMu’s reorganization plan, which would pay more than $7 billion to creditors, who are mostly unsecured note holders. The parties to the negotiation haven’t decided how to split equity in the reorganized company between preferred and common shareholders.

Hedge Funds

The deal would include the court-appointed committee of WaMu’s equity holders, WaMu, and four hedge funds that helped negotiate the current reorganization plan: Appaloosa Management LP, Centerbridge Partners LP, Owl Creek Asset Management LP and Aurelius Capital Management LP.

Mark Gallogly, a managing principal of Centerbridge, and David Tepper, president of Appaloosa, didn’t immediately respond to e-mails seeking comment.

Details of the proposed settlement have not yet been decided and the deal could still fall through, one of the people said.

The two sides have agreed that the noteholders will provide $100 million in exit financing to the new reorganization plan. The form the financing will take has not been worked out, one of the people said.

WaMu, based in Seattle, filed for bankruptcy on Sept. 26, 2008, the day after its banking unit was taken over by regulators and sold to JPMorgan Chase & Co. (JPM) for $1.9 billion. Washington Mutual Bank was the biggest bank to fail in U.S. history, with more than 2,200 branches and $188 billion in deposits.

U.S. Bankruptcy Judge Mary Walrath has given shareholders permission to question the hedge funds’ under oath and collect documents about their WaMu trades. Depositions of the hedge funds were scheduled to begin this month.

Hearing Next Month

Any evidence they found could be used at a hearing Walrath scheduled for June 29 to decide whether to approve WaMu’s reorganization proposal.

Under the plan WaMu would distribute more than $7 billion in cash and tax refunds and reorganize a reinsurance company that has the right to offset taxes on future profits with losses from the former bank-holding company.

Until now WaMu and its creditors had argued that shareholders were not entitled to receive anything under the reorganization plan. Senior noteholders owed $4.13 billion are scheduled to be fully repaid with interest, as are senior subordinated noteholders owed $1.67 billion, under WaMu’s original reorganization plan.

Washington Mutual shares rose as much as 90 percent to 7.9 cents in over-the-counter trading. WaMu’s 5 3/8 percent convertible bonds rose as much as $2.85, or about 24 percent, to $14.60 before closing at $12.50. The securities can be converted to shares until 2041.

The case is In re Washington Mutual Inc., 08-12229, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net Linda Sandler in New York at lsandler@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.

 

[guitarjosh]

Washington Mutual, Inc. Announces Settlement With Significant Creditors and Equity Committee
PR Newswire

SEATTLE, May 24, 2011

SEATTLE, May 24, 2011 /PRNewswire/ -- Washington Mutual, Inc. (Pink Sheets: WAMUQ.PK) ("WMI" or the "Company") today announced that the Company and certain of the Company's creditors have reached a tentative settlement agreement with the Official Committee of Equity Security Interest Holders.

Under the terms of the tentative agreement, which remains subject to the parties executing definitive documentation memorializing the terms thereof, the parties have agreed to the following:

A litigation trust will be established to pursue claims and causes of action that are property of the Debtors against certain non-released third parties. This litigation trust will be funded by the Company with an initial $5 million cash contribution and additional contributions, under certain circumstances, in an amount not to exceed $25 million. The previously announced liquidating trust contemplated by the Company's pending plan of reorganization will be entitled to receive all proceeds realized by the litigation trust until repaid in full (other than with respect to the initial $5 million contribution); thereafter, the beneficiaries of the litigation trust will be the holders of allowed, subordinated claims, as well as preferred and common equity holders.
Common equity in the reorganized Debtor will be distributed to holders of allowed, subordinated claims and the Company's preferred and common equity holders. In addition, certain holders of allowed claims, other than those holding allowed claims who would have previously received common equity in the reorganized Debtor, have agreed to receive a debt instrument and a preferred equity instrument having a combined, aggregate net present value of approximately $160 million.
Certain significant creditors will commit to provide a senior secured credit facility for the reorganized Debtor in an amount not to exceed $100 million.
Upon filing of a plan consistent with these additional terms, the Equity Committee will stay its appeal of the Bankruptcy Court's order, dated January 7, 2011, regarding plan confirmation. Additionally, upon confirmation of such plan, the Equity Committee will withdraw, with prejudice, such appeal.


WMI issued the following statement:

"WMI is pleased to have reached this tentative settlement agreement, which is an important step toward completing the Chapter 11 process. WMI looks forward to distributing over $7 billion to the estate's parties-in-interest upon confirmation and approval by the Bankruptcy Court."

If the parties are unable to reach a definitive agreement that incorporates the tentative settlement announced today, the Debtors intend to proceed with the hearing scheduled to begin on June 29, 2011 to seek confirmation of the plan of reorganization currently pending before the Bankruptcy Court.

Additional details regarding the settlement agreement are available at www.kccllc.net/wamu.

SOURCE Washington Mutual, Inc.

 

[erwinmark]

CCME, DJSP, and WAQUQ Kuwlness could pick some winners, I feel sorry for anybody that listened to him. It's a good lesson, do your own research, before you invest.

 

[michael777]

dead