xxxx

Following what WaMu said is an unreasonably low price of $1.9 billion sale to JP Morgan Chase, the failed savings and loan company is suing the FDIC for over $13 billion.

WaMu filed a complaint with the U.S. District Court for the District of Columbia accusing the FDIC of making a “cryptic disallowance” as well as agreeing to the low selling price to JPMorgan late last year. At the time of the sale, regulators seized WaMu and the FDIC was appointed as the receiver.

In its complaint, Washington Mutual seeks to recover as much as $6.5 billion of capital contributions it said it made to its banking unit from December 2007 through the seizure.

Washington Mutual also seeks the return of $4 billion of trust preferred securities it said were wrongfully transferred to the banking unit, and said it may be entitled to as much as $3 billion of tax refunds. It also seeks damages of $177.1 million related to unpaid loans made to the banking unit.

The company also made claims on several other matters that together could add to any recovery. Washington Mutual is seeking a jury trial.

The FDIC, really? How about suing JPMorgan too? Wait, if neither of the parties would have gotten involved the whole company would have collapsed. The day after the FDIC was appointed as receiver, the parent holding company of WaMu filed for Chapter 11. WaMu was going to either be sold off or go out of business.

Source

Jeremy

View all posts by Jeremy
Jeremys website