WaMu to meet with shareholders
Washington Mutual Inc. has agreed to meet with shareholders seeking information in the company's Chapter 11 bankruptcy, the largest bank failure in U.S. history.
The Associated Press
WILMINGTON, Del. — Washington Mutual Inc. has agreed to meet with shareholders seeking information in the company's Chapter 11 bankruptcy, the largest bank failure in U.S. history.
WaMu attorneys Thursday said they would meet with parties wanting more information and would withdraw a motion setting deadlines for objecting to the company's reorganization plan and outlining rules to obtain information about it.
Judge Mary Walrath postponed consideration of the plan's outline and told attorneys to try to resolve their disputes over information sharing before a hearing June 17.
Her decision came after an attorney for WMI's official committee of equity security holders said WaMu, JPMorgan Chase and the Federal Deposit Insurance Corp. are stonewalling efforts to obtain information about the bankruptcy and the proposed settlement of resulting lawsuits that is the basis for the reorganization plan.
That prompted Walrath to suggest she might reconsider her earlier denial of the equity holders' request for an examiner to investigate the facts of the bankruptcy. She later ruled that the shareholders could appeal her denial directly to a federal appeals court, bypassing a district court judge.
The FDIC seized Washington Mutual's banking operations in September 2008 and sold those assets to JPMorgan for $1.9 billion. The parties subsequently sued one another over roughly $4 billion in disputed deposit accounts.
The shareholders are seeking information underlying the proposed settlement, in which JPMorgan agreed to turn over the disputed deposits to Washington Mutual.
In return, JPMorgan would receive 80 percent of expected tax refunds resulting from WaMu's prior operating losses, which are valued at about $3 billion, with Washington Mutual getting 20 percent.
WaMu also would get 68.5 percent of a second round of operating-loss tax refunds valued at about $2.6 billion, with the rest going to the FDIC.
WaMu's bank bondholders also would be eligible to receive up to 5.5 percent of WMI's share of the second round of tax refunds, with a cap of $150 million, but shareholders would receive nothing.
Last month, Walrath directed Washington Mutual to provide information relevant to the settlement to the shareholders committee. But Justin Nelson, an attorney for the equity committee, said WMI, JPMorgan Chase and the FDIC have provided little information.
An attorney for the FDIC responded that the equity committee wants "every piece of paper having to do with Washington Mutual. ... If we have to go through that, this case isn't getting confirmed for years."
Seattle Times business staff contributed to this report.
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