[url]www.kccllc.net/documents/0812229/...1228000000000014.pdf[/url]
Da ich die Objection von Ben Manson als ungemein interessant und wichtig finde und ich der Meinung bin dass jeder sie lesen sollte der hier investiert ist, habe ich mir erlaubt die wichtigsten (IMHO) Passagen herauszufiltern :
[i]It has become painfully obvious to us that WG&M does not consider equity holders to be their clients
WMI is owned by its equity holders and given historical and recent events related to tax issues, assets are currently above liabilities despite the best efforts of debtor's counsel to maintain the appearance of insolvency.
[u]VISA shares[/u]
On the first amended SOFA, (page 14/176) the debtors list 5.4 million VISA class B shares as an asset.
"JPMC will pay WMI $25 million for WMI's 3.147 million Class B shares of Visa Inc."
[b]where are the other 2.23 million shares?[/b]
[u]Boli/Coli[/u]
It is important to note that JP Morgan Chase reported an addition 5B of BOLl/COLI policies in their 2008 regulatory filing. While Mr. [b]Rosen stated in court that these have
not been transferred, Mr. Kosturos stated that they had[/b], in fact, been liquidated (though he quickly retracted).
Last, without releasing analysis of ownership claims yet reporting three different numbers for BOLl/COLI value (two values within the SOFAs and one during testimony) we should simply trust the debtors have fairly analyzed these claims?
[u]WMI investments[/u]
Alternatively, we must assume the debtors are simply pretending to sell assets behind closed doors and refusing to provide an asset list in order to obscure value or drastically
undervalue the company going forward, which also leads to the conclusion that the bankruptcy process cannot be trusted.
1) How many "captive reinsurance companies" did WMI have? There are more than one but the total is unclear.
2) How many trusts are there vs. how many trusts were there? The debtors state that there are currently six functioning trusts with WMMRC. though there used to be a seventh. These trusts are related to WMMRC. Were there any trusts related to the other captives? If yes, where did they go?
f) In the POR, the debtors state there are 96,000 mortgages (around $20 billion). But then CEO Alan Fishman stated 600B in mortgages were serviced by Washington Mutual in his letter to regulators on September 24, 2008. Is the 20B number accurate?
g) If other reinsurance trusts have moved to cut-off, where did the money go? Or is it just sitting somewhere, quietly, unaudited and unreported?
h) Marion provided a dividend of the trust to WMI to ensure the successful wind~ The trust expires on December 31, 2011, after which remaining assets will revert, unrestricted to WMI. How much are these dividends as projected given current market conditions? If such projections are beyond the debtors' abilities, would a Stalking Horse bid be more appropriate?
Considering the debtors have repeatedly stated in every MOR that the results were unaudited, did not follow any standard of accounting, and could not be relied upon to be accurate, how can a Plan of Reorganization be undertaken given the information available?
[u]Wind farms[/u]
Farms similar in size and production have netted 400M in price the debtors have avoided this thorny issue of asset value by simply giving it away to JP Morgan Chase.
[u]The excess TPS assets[/u]
Looking at simple regression lines suggest at least 10.2B in assets remaining in those trusts. However, it is noted that the Settlement proposes to give away the TPS assets while leaving the liabilities with the holding company.
For example, the TPS asset disposition may represent a 14.2B dollar giveaway (1O.2B in assets to JPMC and 4B in liabilities to WMI) at the expense of equity that the debtors have evaded explaining by claiming attomey-client privilege. Given the hostility shown by the debtors and debtors' counsel toward the equity committee, it is reasonable to conclude that whatever remaining or excess TPS asset value over and above TPS holders' claims, the debtors' through debtors' counsel, are gifting such value away due in part to a perceived effort to lock equity interests out of the bargaining process.
[u]The other subsidiaries[/u]
The book value of the above subsidiaries alone is 1.47 billion dollars ten times the purported vale of the restructured debtor, yet there is no mention of them anywhere in the plan of reorganization.
[u]Contested Assets sold by JP Morgan Chase[/u]
it has become clear to us that assets owned by WMI per previous SEC filings have been sold by JP Morgan Chase, without clear authority in the vague PSA.
[u]The art collection[/u]
It is also reported that over half of the artwork had been donated by September 4, 200, well before the Global Settlement had been negotiated. It appears painfully obvious that liberties have been taken with estate assets.
[u]Second & Union 'the missing subsidiary'[/u]
According to prior annual filings, there were multiple properties listed as estate property, but these have never been evaluated for ownership or potential value. It is averred that upon information and belief some properties were left unchallenged and sold without proper title. If this represents a "gentleman's agreement" and thus a breach of fiduciary duty or not is the decision of the court, but it is apparent that unresolved assets have been sold or donated without court consent.
As of December 31, 2007, the Company's owned and leased property in 36 states was comprised of 2,257 retail banking stores, 233 lending stores and centers and 290 administrative and other offices.
JP Morgan Chase bas sold significant properties without ever providing a list of assets. There have been no objections from the debtors regarding these sales! Again, was there a "'gentleman's agreement" agreed upon at the expense of equity to sell estate property without complaint?
[u]Capital Contributions, Taxes Paid, and WMfsB[/u]
However, it is difficult to argue that over 20B+ held at WMfsB in cash should be sold for 1.9B in any auction held during the light of day. This potential recovery of 29.6B (6.5+3.1+20B) represents more than enough to satisfy all stakeholders.
Additionally, let it be noted to the court that the examiner's report appears to conflate "equity recovery" with "common equity recovery". There is not much distance in the current POR to preferred equity, even with multiple billions of dollars in giveaways to third parties and unaudited assets. Again, the debtors assure us that there are insufficient funds to reach equity holders while giving away assets and claims worth billions of dollars yet refusing to engage in standard accounting practices.
[u]The Global Settlement Agreement/Plan of Reorganization[/u]
this case is unprecedented in that bondholders have already attained similar returns based only on current market prices and yet desire to give away billions upon billions in estate assets in order to both maintain control of the bankruptcy and retain the reorganized company. It is our opinion that this plan, if confirmed, is in danger of becoming the single largest asset giveaway at the expense of equity and abuse of the bankruptcy system in the history of American jurisprudence.
[u]The 'Uncertain' deposit[/u]
It is fairly obvious to those of us involved in this case that the Settlement knew full well the proper ownership of the assets involved, the inherent risk in purchasing the bonds, but stopped litigating for equity the instant it was sure the waterfall wou1d maximize their net return. Indeed, some bonds continued to be purchased above par as the case progressed. The Worker, Homeownership, and Business Assistance Act was enacted on November 26th of 2009. This immediately opened up approximately 2.8 billion additional estate funds. It is perhaps most telling that despite this additional value that should have reached well into preferred equity (the PIERS reflect only a 500M claim), none of
the UCC purchased and held any securities lower than those already held (the PIERS). This suggests that they never had any intention of pursuing estate recovery beyond that which would ensure the waterfall would end at the level of their majority ownership.
[u]The Tax Returns (present and future)[/u]
Having established that a major member of the settlement noteholders knew as early as 13 months before entering into the GSA that the deposits were estate property, they then propose to settle this "complex issue" by giving away more estate assets in the form of the tax refunds, all claims, and more property in a settlement that manages to stop all significant recovery at the level of their own majority holdings-the PIERs.
This central theme occurs repeatedly in the GSA: give assets away without properly conducting valuations or ascertaining rightful ownership. Otherwise, the severely impaired bank bondholders may attempt to claim them.
Additionally, tax returns have been received and held in segregated accounts that do not appear on the MOR Why was this done prior to any confirmed Global Settlement? Are there other segregated accounts (or monies received? When the aforementioned "wholly owned subsidiaries which generate net positive income n receive funds, where are they held? Last, there has been precious little information available to equity regarding the debtors' use of net operating losses (NOLs), with a Friday night filing related to more than 5 Billion in tax benefits to the reorganized debtors that will be available after the reorganized debtor has successfully canceled equity. It is our information and belief that other tax assets will manifest if this goal is accomplished with court assistance. Additionally, most voting equity holders had already cast their vote before this filing was made publicly available. This recovery might have swayed many votes about the fairness of the plan, as there was no equity benefit to this asset and was not disclosed in the POR voting materials. Last, the NOL may be as high as 17B if all interested and qualifying "old and cold" parties have not been sufficiently plied with estate assets before confirmation.
[u]Alternatives exist for Reorganized WMI[/u]
The Debtors do not appear to have explored alternative avenues for extracting value from the estates' potentially massive NOL carry forwards.
[u]JPM's claim to the tax returns[/u]
the following is from Bracewell & Guiliani's report to the FDIC (examiner's materials, page 19).
"Further, JPM thus no right to tiny refund arising with respect to the Sale Losses or the WMB Post-Sale Losses since they were not accrued US of the WMB Closing. Accordingly, the right to such refunds is also retained by the FDIC for the benefit of the WMB creditor. .
Additionally, even if JPM had a valid claim. there can be no division of the carryback to "the first and second NOL" it was an irrevocable decision that created one refund-a refund that JPM cannot claim as a TARP recipient.
The debtors are well aware of this exclusion that prevents JP Morgan Chase from claiming any of the NOL refunds,
Why would the transfer of billions in estate property to JP Morgan Chase need to be considered a capital contribution to the bank if JP Morgan Chase had any legitimate and direct claim?
[u]The FDIC claim to the tax refunds[/u]
If the FDIC receivership has any legitimate claim to estate tax refunds per the Tax Sharing Agreement then they should assert that claim in a true adversarial process, but with the knowledge that such claims would likely be offset by the 3.1B in taxes prepaid by WMI for WMB in 2008 as well as the 6.5B in capital contributions to the bank. They would of course, have to construct an impressive argument considering their current failure to gain access to Colonial or TeamBank's NOLs. These two banks cost the FDIC deposit fund approximately 2.9 billion dollars. Washington Mutual's total cost to the deposit fund was zero.
[u]The Plan treats separate class members differently[/u]
1. The TPS should, upon information and belief, stand pari passu with the other preferred securities. However, the TPS have aggressively pursued litigation and thus the settlement attempts to break class holder equivalency by offering additional funds from JPM as inducement.
The transfer of billions in estate property to JPM allows them much financial flexibility to buy off objecting parties.
there are numerous unvalued assets and subsidiaries within the proposed reorganized company that have not been disclosed within the SOFAs, MORs or Plan of Reorganization. Furthennore. the tax attributes the debtors are attempting to obscure are many, many times over any stated distribution to retail holders of PIERS.
[u]The Settlement Notebolders as Insiders[/u]
the Settlement Noteholders functioned, for all intents and purposes. as the debtors.
As insiders, the four members of the Settlement should open their trading histories within Washington Mutual bonds and equity classes with appropriate dates and prices included to insure they were not trading on insider information.
Additionally, due to the large sums involved with this case and missing subsidiaries, a report of suspected bankruptcy fraud with extensive supporting documentation will be filed with the US Trustee's office before the lit of January.
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