Washington Mutual Bank bondholders agree to $350 million settlement
By APWednesday, October 6, 2010
WaMu bank bondholders settle for $350 million
SEATTLE — A group of Washington Mutual creditors have signed on to a settlement that pushes the bank’s reorganization plan a step closer to approval.
Washington Mutual Bank bondholders agreed to a $350 million settlement, according to an amended reorganization plan filed Wednesday with U.S. Bankruptcy Court in Delaware.
The bondholders, who are owed billions of dollars, are among the last to sign on to a settlement that would pave the way for the bank holding company to emerge from Chapter 11 bankruptcy.
Seattle-based Washington Mutual was the biggest U.S. bank ever to fail. The Federal Deposit Insurance Corp. seized WaMu’s flagship bank in 2008 and sold its assets to New York-based JPMorgan for $1.9 billion. The parties subsequently filed lawsuits against one another over roughly $4 billion in disputed deposit accounts.
Under an earlier version of the plan, WaMu’s bank bondholders were eligible to receive up to $150 million.
Shareholders get nothing under the current plan and have not agreed to the settlement.
