WaMu seeks to redo bankruptcy
By Randall Chase |
March 29, 2010, Monday
|
Print Edition
Print Edition
WASHINGTON Mutual Inc filed a bankruptcy reorganization plan, two weeks after resolving a US$4 billion dispute with JPMorgan Chase & Co and the Federal Deposit Insurance Corp.
The FDIC seized WaMu's flagship bank in 2008 and sold its assets to JPMorgan for US$1.9 billion. The sale resulted in the two banking companies and the government agency trading lawsuits over roughly US$4 billion in disputed deposit accounts following the largest bank failure in United States history.
The bank holding company filed its 521-page Chapter 11 plan late Friday in US Bankruptcy Court in Delaware.
The plan, which still has to be approved by a judge, would set up a US$7 billion trust fund for paying creditors, including the US$4 billion in deposit accounts that JPMorgan had claimed for itself.
As part of a compromise reached this month, JPMorgan has agreed to turn over the US$4 billion to WaMu in return for 70 percent of the tax refunds expected from WaMu's prior operating losses, which are valued at about US$3 billion.
WaMu would get 40 percent of the tax refunds resulting from a second round of operating losses. The remaining 60 percent would go to the FDIC.
The FDIC seized WaMu's flagship bank in 2008 and sold its assets to JPMorgan for US$1.9 billion. The sale resulted in the two banking companies and the government agency trading lawsuits over roughly US$4 billion in disputed deposit accounts following the largest bank failure in United States history.
The bank holding company filed its 521-page Chapter 11 plan late Friday in US Bankruptcy Court in Delaware.
The plan, which still has to be approved by a judge, would set up a US$7 billion trust fund for paying creditors, including the US$4 billion in deposit accounts that JPMorgan had claimed for itself.
As part of a compromise reached this month, JPMorgan has agreed to turn over the US$4 billion to WaMu in return for 70 percent of the tax refunds expected from WaMu's prior operating losses, which are valued at about US$3 billion.
WaMu would get 40 percent of the tax refunds resulting from a second round of operating losses. The remaining 60 percent would go to the FDIC.
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