I have to say that Sandi's point of view merits some better rating, although he writes what people doesn't like to read. I like it, since it is a different point of view. This doesn't mean that I agree with him.
It seems that the EC is on it way of been formed (if that would be the issue which I do not believe it is)
Having read months of comment and arguments, if justice is to be done, I think that:
1. JPM will have to return the 10 B$ that Weill is taking. It could be returned in cash, assets, or JPM shares. The mean does not change the fact that it represents value for WMI.
2. JPM will have by any mean compensate WMI for compensatory dammages.
3. The 2004 procedure will add to JPM compensation. It is a matter of believe (or not) that JPM did something to get WMI on the cheap without thinking that a 3er party could step in the April bid. (JPM can make lateral agreement with competitors, but not with all of them)
So JPM will have to add value to WMU. How much is to be seen. My "intuition" adding above 3 points will be 10B$ (due to inappropriate seizure of assets) + 15B$ in other issues = total 25B$ that will increase WMI assets.
These 15B$ represent WMI = 8.82PPS, so is a number that JD could justify to JPM share holders.
Next issue is FDIC:
1. If FDIC cannot demonstrate how it arrived to 1.9B$ sale, and so used the fair value concept, a new valuation could be ordered. The immediate "out of the hat" valuation is that JPM made a profit of 29B$ on revaluation.
2. FDIC will have to demonstrate the reason by which it sized WMI without having a clear OTC instruction, and why FDIC handled the "passing shot" seizure - sale to JPM in a few ours, that is against the FDIC procedure.
3. FDIC could be ordered to pay for the fair value of WMI on real WMB assets and liabilities.On a second step FDIC and JPM could enter into dispute on who should pay the difference in valuation of those assets that really belonged to WMB. I think that this is a different case, and not in the BK court, and not necessary will delay the FDIC - WMI case.
4. FDIC will have to add to the fair valuation, compensation to WMI for all the mess. FDIC has no shares, so it will be in Cash and or Credits in favor of WMI.
So FDIC case will add to WMI value. Let assume 29b$ valuation that is the JPM gain + damages = Total 39B$
In terms of SETTLEMENT date expectation, nobody knows.
The trigger to it on JPM could be 2004 probe disclosure by WMI or the trial jury.
The trigger to it on FDIC, would be a request by Judge Mary of fair valuation, and or the year closing of the seizure that I do not know how strong this date is.
I do not think that other courts will intervene against the BK court. (but it is always possible)
If Judge Mary begins to take decision that will help speed the case, although several appeals will come in, and I think that it will take some time to clean the denial process.
I do hope and wish that by October, after the BK court takes some decision thing will move faster and may be and agreement will be reached. It can also take at least 6 more months.
So WMI will find itself this 69B$ in cash and or credits, of which it has to pay to debtors and Pref, around 11 B$. That is WMI will be a clean box with 58b$ in liquid.
This means a PPS 34$, if all things come together. After that WMI could restar a bank o be purchased by ??.
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