Legal News

FDIC, WaMu reach agreement on bankruptcy plan

By (Breaking Legal News)

The FDIC said on Friday the agreement settles claims between the bankrupt bank's holding company and JPMorgan Chase, which acquired the failed bank.

The FDIC is involved because it was appointed receiver of Washington Mutual in September 2008, during the height of the financial crisis. The deal comes after the FDIC board had rejected a previous proposed settlement.

The bank holding company has been seeking a way out of 18 months of legal fights so it can begin repaying creditors.

The three parties have been fighting over deposits Washington Mutual had at its seized bank and over billions of dollars in tax refunds.

"This agreement will result in substantial recoveries to the receiver and resolve potential claims that could have taken years and millions of dollars to litigate," FDIC General Counsel Michael Bradfield said in a statement.

Washington Mutual said in a statement later on Friday that settlement was filed with the full support of the FDIC, JPMorgan, and the official committee of unsecured creditors.

Full post as published by Breaking Legal News on May 22, 2010 (boomark / email).