Heute mprgen schrieb ich noch über die Presse-Hengste siehe da - da ist die erste Richtigstellung:
Another day spent following the courtroom drama surrounding the Washington Mutual bankruptcy proceedings brings yet more confusion as the press gets it wrong yet again.
Bloomberg Businessweek states, "A settlement agreement “should be completed by the end of this week,” FDIC attorney Thomas Califano said in an interview after the hearing. Califano earlier told U.S. Bankruptcy Judge Mary F. Walrath in Wilmington, Delaware, that the agency would have enough time to review and approve the proposed settlement."
The only problem is, anyone listening to the court audio heard the exact opposite from Mr. Califano.
Click Here to listen to a recording of Califano's statement
Califano clearly states, "The FDIC expects that drafting on the remaining issues and obtaining all of the necessary approvals wouldn't be completed by the end of this week." Furthermore, the article says "Califano earlier told U.S. Bankruptcy Judge Mary F. Walrath in Wilmington, Delaware, that the agency would have enough time to review and approve the proposed settlement."
Califano made no prior statement about having enough time to do anything. In truth, he arrived to the court late because of issues with mass transit. The totality of his presentation before the court went as follows.
"Good morning your Honor, I'm sorry I am late... I was late. Your Honor, we've been working with all the parties to achieve a settlement of the issues in this case. The basic provisions of the settlement agreement in the Plan and Disclosure Statement positively address the issues of the FDIC-R, uh, and the FDIC expects that drafting on the remaining issues and obtaining all the necessary internal approvals wouldn't be completed by the end of this week."
This "mistake" appears to have taken on a life of its own as it's been repeated in more than a handful of stories.
"Washington Mutual Inc and the Federal Deposit Insurance Corp expect to reach a settlement by Friday to resolve legal disputes, a key to ending a bankruptcy stemming from the biggest bank failure in U.S. history." -Reuters
The Wall Street Journal's Market Watch had the story correct, and then changed it to match everyone else's error.
"("Washington Mutual Says FDIC Will Sign On To Chapter 11 Deal," published at 12:04 p.m. EDT, incorrectly stated the FDIC would not be able to take action by Friday. The corrected version follows.)
Thomas Califano of DLA Piper, attorney for the FDIC, said he did expect the agency will be able to take final action on the proposed settlement by the end of the week."
While this may seem like a small issue, "this week or next who really cares," shareholders of Washington Mutual Inc are watching this drama unfold with more than a slight interest in the timing.
WaMu's plan of reorganization currently hinges upon a "global settlement" between Washington Mutual Inc, JP Morgan Chase, and the FDIC. This "settlement's" terms appear to see Washington Mutual Inc "gifting" billions in cash to the FDIC and JP Morgan as the holding company and its creditors do everything within their power to wipe out equity while retaining control of the company, which is due well over $10 billion in on going tax credits.
If this "settlement" and the company's plan of reorganization aren't consummated by May 26th, the debtors (Washington Mutual Inc) will lose control of the case, in that they will have used up 20 months of exclusivity during which they retained exclusive control over the reorganization process. Once past the May 26th date, shareholders and other parties of interest can then file competing plans which could be far more fair to equity and much less "generous" with the estate's money.
It's unlikely that any plan put forth by the Equity Committee (the shareholder's representation in the proceedings) would gift any cash or assets to JP Morgan Chase or the FDIC. They would more likely use the company's money to pay off its creditors and bondholders so that the shareholders would retain control over the holding company, its on going tax credits, as well as its rights to pursue litigation against JP Morgan Chase and the FDIC with an estimated value of well over $20 billion.
There's no telling if the FDIC will or will not be able to sign onto the agreement by Friday. But as usual, a careful study of Washington Mutual's case reveals serious issues with the press. At worst they are reporting known fallacies. At best they're inept and derelict in their duties as reporters. It's astonishing to see how they can't even get simple facts correct.
If the press WOULD just go back and check facts before reporting them, they WOULDN'T be losing subscribers and advertising revenue at record levels.
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