Now it gets a bit more interesting/speculative, and I’m hoping we have some legal experts on VIC willing to chime in here. My thinking is that the longer these cases drag on, the higher the settlement rate will become for the lenders who have not yet settled. One basic reason is that the trust’s legal costs continue to accrue. I was shocked to discover that the trust has already incurred $344M in cash legal costs over the past ~3 years, and they currently estimate another $280M will be spent going forward. Therefore, Quinn-Emanuel will end up making ~$624M from these Rescap cases in total. (Is that some sort of record?) But more generally, I think the "additional sources of value" as described below may apply to active-case defendants (those who have refused to settle up to this point) to a greater extent than they were applied to the settlements already completed.
I assume the active-case defendants are only responsible for their pro rata share of past legal expenses, where pro rata share is calculated as Unsettled Securitized OPB / (Unsettled Securitized OPB + Settled Securitized OPB), but they’re 100% responsible for future legal expenses. Note: the current Trust NAV of $3.15/sh includes $280M of liabilities for estimated future legal/trust operating expenses. So, what I’m claiming is that we should add back at least some of that liability, because I think the active defendants are on the hook for it. Then there’s the prejudgment interest that Katana brought up in his write-up. These cases have already been going on for about 3 years and it looks like we’ve got about 2 years to go. So that’s around 5 years of pre-judgement interest at 9% per year on an estimated remaining settlement of $1.354B. If we then assume a 70% “settlement factor” on these charges (similar to Katana), the total “Additional sources of value” amount to $8.09/sh.