September 12, 2011 Washington Mutual/Broadbill
My observations from court today will be somewhat brief, since in a multi day trial we are just laying the groundwork today and its a lot of foundation (read: boring) opinions and facts from which to argue and cross examine further.
Today's main action involved an attorney from the Weil team for the defendants, Adam Strochak, that we all have come to know, and a new face, attorney Jonathon Hochman, of Schindler Cohen & Hochman, for the plaintiffs. Our one witness today was Barry Levine, an unassuming man that packed a real punch when it was needed!
Strochak first started to lay the foundation in painstaking detail and attempted to get some of the testimony by Levine barred from being on the record. JMW passed on excluding anything, opening the door for Levine to strut his way through the day's questions. While not an attorney, CPA or graduate degree recipient (points made by Strochak on cross), Levine has had a multi faceted career in the financial industry and seems smart, well briefed and fearless.
Hochman began the day with what will be the decision point for JMW; namely, are the LTWs considered debt or equity? In case after case, Levine cited examples of LTWs issued similarly and considered both by the issuing document and by the FASB (Financial Accounting Standards Board) to be debt. At issue for the LTW holders is their finally being paid after 10 years, and if considered debt, being placed high enough on the Washington Mutual waterfall that the payout is 100 cents on the dollar. Otherwise, if JMW rules they are equity, their place on the waterfall is above common shareholders but 100 cents on the dollar is much less likely. NOTE: early on in the housekeeping groundwork, both sides agreed to allow the judge to only rule on this issue: debt vs. equity, and leave the valuation and payoff amount for later.
Levine, guided by Hochman's questions was dull and plodding. He established his credentials and knowledge and gave the judge much to consider. Under Strochak's questioning, Levine turned into a different person, and was both knowledgeable and defiant, effectively painting Strochak into a corner. There were numerous times during the day when Levine simply out foxed and out maneuvered Strochak, and I could see JMW's amusement at this interesting and unexpected turn of events.
Tomorrow holds more cross on Levine and then a re-direct (I imagine) before moving to the next witness.
As the trial progresses, I will attempt to weave today's events, as needed, into future commentary.
Ilene
Quelle: www.delawareshareholderservices.com/qnews.html
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