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Saga of $4B
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The
Saga of $4B
10-14-08: WMI files a motion (Docket 74, http://tinyurl.com/bjojer)
for a Stipulation regarding Deposit Acounts at WMB/WMBfsb with a combined
balance of approx $4B. The motion asks that WMI be allowed to transfer
those funds to another financial institution. It also reserves all rights/claims
that JPM may have against the funds.
10-20-08: FDIC objects to Stipulation (Docket 104, http://tinyurl.com/b4z6nk): The FDIC makes no claim on the funds, but states that it may have claims in the future. They cite that 'the amount of the funds', and the debtors 'no need' to use the funds, and 'there is no need to disturb the status quo' as reasons. They also mention possible setoff rights.
They make this argument: 'As of this date, the FDIC has been unable to determine whether all or any part of the Funds are property of the Debtors, WMB, or WMBfsb, or whether the Debtors have any obligation to WMB or WMBfsb which would give rise to a right of setoff by the FDIC against the Funds.'
They mention one of their primary functions is to 'maximize net present value return from the sale or other disposition of assets under its control'.
There is no mention of the interest being lost due to the funds residing in a checking account.
10-20-08: The Noteholders Group objects to the Stipulation (Docket 100, http://tinyurl.com/bl7xwb ): They question whether the funds even belong to WMI, since WMI cannot produce any 'signature cards', or other evidence that the monies belong to WMI. They neglect to mention that all records are in possession of JPM at that point, and are inaccessible to WMI. They also state that JPM cannot find the records.
They state: 'WMB had capital in excess of the regulatory standards for "well capitalized" institutions and was unquestionably solvent on a fair valuation basis when the OTS pulled the plug.'
They also make the argument that there are other claims against the funds that may arise.
They suggest the funds should be put into an escrow account instead.
10-20-08: The court hears testimony regarding the Stipulation, and the matter is continued to 10-27-08. (Docket 117)
10-27-08: Hearing on the Stipulation moved to 10-30 hearing. Docket 150
10-30-08: Hearing on the Stipulation moved to 11-14-08. Docket 189.
11-14-08: Hearing on the Stipulation continued to 11-25-08. Docket 289.
11-24-08: Hearing on the Stipulation continued to 12-16-09. Docket 344.
12-15-08: Hearing on the Stipulation adjourned until further notice. Docket 436.
1-26-09: WMI withdraws motion regarding the $4B (Docket 611): http://tinyurl.com/blamb7
3-10-09: At present the $4B is still sitting in the checking account at JP Morgan.
At a 2% rate these funds would have generated roughly $33M from 9-26-08 to 2-26-09.
And at a commercial lending rate of 6%, 90% of $4B represents a $89M profit for the same period for JPM.
4-27-09: WMI has finally acted, and filed suit against JPM for the $4b deposit!!!