b. Difficulties in Collection
The Plan Supporters argue that given the complexity of the
case and the fact that it involves claims against the FIDC as
well as JPMC means that the possibility of collecting is very
difficult. They note that because WMI’s claims against the FDIC
are premised in part on its equity ownership of WMB, the
possibility of collecting on those claims are particularly
remote. The FDIC as Receiver of WMB has significantly fewer
assets than the claims of creditors, making any recovery for
equity unlikely. The Plan Supporters argue that even collection
against JPMC for claims the Debtors have against it is not
assured.
The Plan Objectors disagree, contending that JPMC is a huge
financial institution with many resources and that any collection
of claims against it cannot be difficult. They also note that
several of the assets in dispute are liquid: notably, the $4
billion in Deposit Accounts, the more than $5 billion in tax
refunds, and the $4 billion in TPS. Therefore, they argue that
collectibility is not an issue.
58
The Court disagrees with the Plan Objectors. The collapse
of WMB itself demonstrates that bank deposits (especially in the
amount of $4 billion) may not be easily collectible without
resulting in another bank collapse. Further, given the economic
turmoil in 2008, when even huge institutions like Lehman Brothers
and AIG faced financial difficulties, the Court concludes that it
is not possible to say that any judgment against JPMC would not
face difficulty in collection, especially if it is in the
billions of dollars as the Plan Objectors contend. Finally, to
the extent that the Debtors are successful in proving any claim
against the FDIC as Receiver for WMB, it would be but one of many
claims against the receivership with little prospect of any
meaningful distribution. (Hr’g Tr. 12/2/2010 at 71.) Finally,
the significant counterclaims against the Debtors raised by JPMC
and the FDIC (in excess of $54 billion) add to the difficulties
of collecting from them. Therefore, the Court finds that this
factor supports approval of the Global Settlement.
In her statement to Judge Collyer, Doherty of FDIC Corp mentioned this very fact that FDIC-Receiver does not have the assets that WMI wants, so we would need to go knocking on the door of FDIC-Corp.
MS. DOHERTY: So that's his incentive. He wants to
18 go after another pot of money.
19 THE COURT: No, I understand, believe me. I got that
20 much.
21 My question was whether it were necessary. I mean, his
22 argument is that we got to keep corporate here because in the
23 end when I win this case I want someone to pay for it. Now
24 that's in the end. That's a long, there's a long line of
25 assumptions and presumptions and et cetera. But if you tell me
1 that FDIC, assuming that we found that FDIC-Receiver did wrong
2 things, who would pay and you're saying that it has to come out
3 of the receivership money.
4 MS. DOHERTY: That's correct, Your Honor.
5 THE COURT: Well, that's 1.9 billion dollars period.
6 MS. DOHERTY: That's right.
7 THE COURT: Okay, thank you.
This is what THJMW is referring to in her opinion. It is not an easy case to prove FDIC-Corp liable, just like the Veil of WMI, FDIC has the same separation. They did both sign the P&A and that is where Stochak of Weil is trying to get em.
I've bolded where she pointed this out..
JPMC is a different case, if JPMC is liable, they are a sub of JPM. Now Weil would need to sue JPM in its corporate capacity, but the Deposits that Weil wanted back were in JPMC, not JPM. Once again you get into the Veil issue with JPM.. I am starting to understand where she is going with this opinion. You have to read it objectively.
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