Washington Mutual demanda a la FDIC por 17 billones US$ + daños

Nunca se ha sabido en que bando esta Bopfan, si en el los pumpers para animar las acciones con noticias y datos falsos o es simplemente alguien con conocimientos que da su opinion objetivamente. A saber, puede que este dando su opinion mas sincera confirmando la inviabilidad de las comunes y su destino cero o puede que este dando animos para vender porque habrán una noticia que las impulsará despues de la mediacion. Hay que recordar que con la ultima noticia se multiplicaron x 6 pero en el ultimo intento apenas subieron, pocos se creen estas acciones despues de numerosos fracasos de entente entre las partes. Incluso con noticias boyantes se duda de subidas fulminantes, llega un momento que determinadas acciones se van quemando conforme transcurre el tiempo y esta es una de ellas. Que MW lleve comunes solo es anecdotico, cualquier presidente de EC debe llevarlas por imagen, en realidad a traves de fiduciarios debe estar posicionado en clases preferentes y cualquier acuerdo que pueda surgir dará opcion a las mismas antes que a las comunes, aunque todo es posible. Lamentablemente no se verá nada extremadamente positivo para la equidad ya que ni FDIC ni JPM participan en la mediacion lo cual indica que no hay dinero para la equidad salvo que se cambie el GSA algo improbable en la mediacion.

Bueno hoy cerré la operación que abrí en el dax en 5380, hoy cerrada en 5900 en total un poco más de 500 puntos de beneficio a 25 euros por punto, unos 12500 euros por contrato de beneficio. Lo he cerrado antes de tiempo ya que todos los autómatas están chillando tendencia primaria bajista. No es descartable en el dax alguna subida más hasta la parte superior de la primaria bajista sobre los 6400 (oportunidad de abrir cortos) pero demasiado riesgo para pocos puntos. El que haya seguido la operativa que haga lo que quiera pero vamos mi profit en esta operación acaba aquí que no está nada mal, dedicar el dinerito en cosas buenas ;).

Saludos

The SNHs’ response to Judge’s September Opinion was their motion to appeal filed on September 27. In addition to denouncing Judge’s ruling on IT as “grossly injustice”, and seeking overturn of it by the higher court, the appeal serves two purposes: (1) giving the warning to EC that they are coming for a long, hard fight. Since EC (Equity holders) has nothing to lose, we don’t mind to fight to the bitter end. Besides, SNHs reactions are not unexpected. EC (equity holders) is thoroughly unafraid and ready for the hand to hand battles at the mediation. (2) The appeal, more importantly, is a potential threat to the debtors and possibly to an even wider audience. “Judging from the vigor” (borrowing the Judge’s words) in their defense, it threatens to dig their heels in and draw the case into a costly, chaotic “litigation morass”, a situation the Judge clearly was trying to avoid. In a prolonged, draw-out battle, not just SNHs, but the debtors, senior secured creditors, and possibly other GSA parties, have more to lose. Furthermore, in their appeal, SNHs have already started pointing fingers at the debtors and other creditors. There is an old Chinese saying that the longer the night, the more likely to have unexpected, and often unpleasant dreams. Giving the potential fallout of this fight (mediation or litigation), the time is not on the side of the debtors and GSAs.

In addition to other motives (including pursuing Plan confirmation at all cost and at every turn), the debtors’ 10/5 Statement on Mediation scope and Confirmation was, in my view, partly a strategic response to SNHs’ appeal action. Realizing a stand-off between SNHs and EC (Equity) could not just derail the Plan further, but drag the debtors and other creditors into the IT mess, giving the chance for the adversaries to blow open the whole good faith / bad faith charge, the debtors desperately attempted to separate the mediation and confirmation, in their words, to “de-link” the two, and move the case on a so-called “parallel” path.

The Judge did the right thing by denying the debtors’ request for “de-link” and “parallel track”. She did so based on the original meaning of her Opinion that without the mediation, the case will disintegrate into a “litigation morass”, implying, in my view, try mediation first, confirmation second. The debtors did their best but an un-honorable thing of attempting to twist the Judge’s words with the intention to confuse and mislead. I don’t think the Judge appreciate that. By denying “parallel track”, the Judge in effect accepted (at least partially) EC’s arguments for maintaining “bargaining chips”, “maximum flexibility”, and flexible “options” that are crucial in facilitating a successful mediation by involving more interested parties. After failing to de-link, the debtors filed their own appeal to make another attempt to disrupt the Court order on mediation. EC followed with a cross-appeal motion, suggesting if the appeals that try to undermine the Court ordered mediation are approved, the Court should also approve EC’s timely-filed appeal to the Court’s January Opinion of “fair and reasonable”, which, I consider the “mother of all appeals” in this case. EC’s arguments were built on the solid grounds of “fair play” as well as on other legal basis. It’s essentially telling everyone that we can either blow up the whole case, or to be boxed in the mediation for a fair fight. EC meanwhile filed its full Opposition to any attempts (motions) to leave for appeal by the debtors, SNHs, and creditors. EC means business and is ready.

It’s a bizarre case turning into an even more bizarre situation. Two major parties (JPMC and FDIC) that caused this whole mess will not be at the mediation table, scratching free (at least for now) while other players are gearing up to fight tooth and nail. However, as many of us pointed out, the door is still open. In my view, when one desperate is chasing another into desperation, the chased will turn the heat on the next target for escape or salvation, then to the next… Sooner or later, we will have enough desperate parties with uncontrollable desperations. The Court didn’t order JPM and FDIC to the mediation at this time. Some people will draw them in. Besides, as I said, who would like to be in a situation where other players mediate, negotiate, or fight behind your back for some solutions which are likely to have serious impact on your own interests?

The debtors’ counsel once said the WMI case called for a “holistic” solution. The Judge seconded that approach (in her Jan. Opinion). When the debtors argued for “parallel track” early this month, they clearly abandoned their “holistic” notion to suit their immediate needs, and tried to use a “surgical laser” approach to cut and run. The EC recognized and understood the scheme, which is neither practical nor fair, so did the Court. By denying the parallel track forcefully, the Court essentially told the debtors to go back to the “whole body operation” solution. I believe the Court did the right thing. I just hope at this time we can achieve a true “whole body”, “holistic” resolution.

We will see how things unfold in coming months.

Great summation, Patience. The Judge did say she would not require JPM/FDIC in mediation "in this instance" which could mean it may come to that at some point.

What I don't understand is what exactly happens if Rosen gets up in court on the 7th and says, "Your Honor, we are far apart and the EC's demands are unreasistic". I doubt she'll just say, "OK, fine, go ahead and schedule another contentious confirmation hearing, Mr. Rosen." The bad guys MUST realize that a confirmation hearing is far away and we're also looking at yet more NOLs after 1/1/12 as well as the strong possibility that she stays the BK while the EC/SG crawls deep into this thing with additional discovery on the SNs which could implicate the Debtor and SO MANY others associated with our SNs.

La juez tiene que decidir de una vez, o le da la razon al EC o a los debtors, rechazando el GSA o confirma el POR de una vez y mata a la equidad totalmente. Despues de la mediacion veremos si es o no corrupta. En vez de dar una solucion en la mediacion haciendo participar a los actores importantes, JPM_FDIC, los deja al margen como si no tuvieran nada que decir o aportar, cuando son los que tienen la solucion a todos los problemas cediendo NOLS repartidos para dejar a la equidad sin un solo dolar.

Shrapnel from the explosion of the subprime market may yet produce a significant change in the way investors and their managers with a distressed-assets strategy maneuver for advantage in the context of chapter 11 proceedings. Specifically, a Bankruptcy Court’s refusal to confirm a plan in the Washington Mutual Inc. (WMI) reorganization proceedings may herald the rise of a new weapon – the “colorable claim” that a party with an interest prior to one’s own has engaged in insider trading – in the in-fighting among interested parties.

All is fair in love and war but it is impossible to avoid the impression that Judge Mary Walrath’s opinion could do a lot of mischief.

Background

WMI was a big part of the madness that we all fondly remember from the years 2007-2008. It was the holding company of Washington Mutual Bank (WaMu) back when WaMu was the country’s largest savings-and-loan association. As the subprime crisis became a more general banking crisis, depositors decided WaMu was a bad bet, and then withdrew more than $16 billion from their accounts in a ten-day period in the middle of September 2008.

On September 25, WaMu’s regulator, the Office of Thrift Supervision, seized the bank and appointed the FDIC as receiver. The FDIC immediately sold the bank to JPMorgan Chase through a hasty and, it turns out, rather sloppily drafted purchase and assumption agreement. It remained very unclear which assets belonged to the holding company, WMI, and which had passed through this seizure-and-sale into the hands of JPM. WMI filed a chapter 11 petition on September 26, and the resulting litigation has been even more-than- usually hard fought.

Refusal to Confirm

But we’ll fast forward three years, to September 13, 2011, when Judge Mary Walrath of the Delaware bankruptcy court refused to confirm the reorganization plan, because the holders of equity in WMI argued that four hedge funds, collectively referred to as the Settlement Noteholders, had engaged in insider trading, in other words that they had become insiders under the law when the Debtor provided them with confidential information during the course of negotiations toward such a settlement, and that there is at least circumstantial evidence that the Settlement Noteholders knowingly traded on the basis of this information.

How exactly are the two issues (insider trading and plan confirmation) related? The equity holders noted that bankruptcy law requires that a plan, to be confirmed, must be “proposed in good faith and not by any means forbidden by law,” 11 U.S.C. §1129(a)(3). They cited the alleged insider trades as a reason why the proposed settlement should be regarded as failing the good faith test. Strikingly, Walrath makes a point of rejecting this particular contention: “While the Court is not suggesting that the Settlement Noteholders be commended for their actions, the record shows their actions do not support a conclusion that the Modified Plan cannot be confirmed because it has been proposed in bad faith.”

The allegations of insider trading arise again much later in Walrath’s opinion, though, in the context of “equitable disallowance,” the authority of the bankruptcy court to disallow the claims of a wrongdoer, thereby expanding the size of the estate available to other claimants. Judge Walrath made no finding on the question whether there had been insider trading, and thus no finding disallowing the Settlement Noteholders’ claims. She did find, though, that the equity committee had made a “colorable claim” to that effect under both the “classical and misappropriation theories” of insider trading. She granted the committee permission to bring an adversary proceeding on that basis, but stayed any such proceeding pending efforts at mediation.

Scarce Precedent

Precedents for disallowance on the ground of insider trading would seem to be scarce – though Walrath cites a U.S. Supreme Court decision in its support, the decision is an old one, preceding the existing statutory language. It is the 1939 case of Pepper v. Litton, where the high court said that one who is in a fiduciary position with regard to a corporation “cannot utilize his inside information and his strategic position for his own preferment.” That was one of a list of principles such a person cannot violate. When these principles are violated, the Pepper court continued, “equity will undo the wrong or intervene to prevent its consummation.”

Walrath expressed her view that there will only be “extreme instances – perhaps very rare” when it will be necessary and thus appropriate for a bankruptcy court to invoke equitable disallowance. But evoke it (as the potential outcome of those “colorable claims”) she did, and if her assertion of this power holds up it will provide a new piece of munitions, of indeterminate charge, for use in future reorganizations.

The Settlement Noteholders have appealed to the District Court, contending that there are “fundamental errors of securities and bankruptcy law and violations of due process” inherent in Walrath’s opinion and order. They make the case for example that when Congress was debating the bill that became the existing bankruptcy statute, in 1978, it “considered – and then ultimately rejected – the inclusion of equitable disallowance as a remedy

http://allaboutalpha.com/blog/2011/10/19/wmi-reorganization-produces-potentially-disruptive-bankruptcy-decision/

Besugo no le des más vueltas la juez es corrupta, ha dejado de nuevo al margen del todo a JPM y la FDIC por lo que no van a ceder en nada y ya le dijeron poco más que sinvergüenza a la juez para por no aprobar el POR, si no tenían nada que ver el IT con la GSA justa y razonable. Los miembros del EC siguen abandonando, M.W mrsimpson en su pumperio dice que es bueno que esté y ya vemos como llevaba el EC cuando estaba sólo. MW ya hace tiempo que está comprado por Rosen cuando le dio en el POR un puesto en el liquidation trust incluso en la nueva compañía reorganizada podrá conseguir un puesto, por lo que el dinero que va a cobrar allí va a superar en muchos dígitos su inversión en un millón de comunes. La perdida de un miebro del EC es muy mala, porque supone más facilidad para corrumpir más aún a los pocos que queden.

Esta juez ha dejado un hueso casi sin carne que son el los hedge con el tema del IT, para que lo compartan muchos perros callejeros como son TPS, EC, las h's, bonistas wmb, y los propios Hedge. Recordemos que TPS está dirigidos por otro hedge fund, lo que los hace altamanete peligrosos y no cederan nada en sus pretensiones a favor del EC. Por tanto "si todo sale bien" se avecina una dura lucha que va a durar mucho ya que los hedge han apelado y están dispuestos a ir hasta el final, y todo por migajas.

Respecto a las H's ya dije que su precio objetivo respecto a las K's serían unos 2,20 y respectoa las P's unos 1,70 dólares, sin duda todo lo que bajan por debajo de los 2,50 es para hacer una compra fuerte y hacer un swap de todo el resto de preferenets a estas, yo ya tengo órdenes de compra en esas cotizaciones. Quien siga con sus K's o P's con las H's en estos precios es que no se entera del caso. Son la opción más segura a estos precios, si al final no hay nada de IT y el POR se aprueba tal cual está saldrán muy beneficiadas las H's, y si se reparten migajas, hasta que la juez no haga un ruling contra las H's deberemos de cobrar más que cualquier preferente, y si la juez hace ruling cobraremos igual que preferentes. Conclusión unas H's por debajo de 2,50 todos son ventajas, no hay ninguna sola razón obejtiva que haga estar en preferentes k's, p's o comunes, estando las h's a estos precios por mucho que diga mrsimpson.

Por mi parte el beneficio del trading con el dax, está puesto a un buen paqueton de h's, veremos si se ejecuta, sino tampoco pasaría nada.

Saludos

La Juez puede estar comprada o dirigida por altos estamentos que soportan a la FDIC en el juicio, ahi ya se le ha visto el plumero, esto lo tengo bastante claro. Lo que queda por ver es que decision tomará sobre el GSA en cuanto al IT ya que la base del rechazo del POR fue por esta causa y lo que no parece es que este corrompida por los Hedges ni por los debtors, a los cuales les puede salir el tiro por la culata a favor de la equidad, siempre sin afectar a la FDIC que es la protegida de la Juez. En relacion a tu comentario sobre las H´s, totalmente de acuerdo, seran ganadoras en el proceso por delante de las preferentes, no se si las dejaran bajar a los niveles que marcas, pero creo que tarde o temprano las volveremos a ver entre 10 y 15.