Washington Mutual again seeks approval of reorganization plan

Associated Press//July 13, 2011//

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WILMINGTON, Del. — Bank holding company Washington Mutual Inc. is asking a Delaware judge to approve its revised reorganization plan.

The judge convened a three-day hearing Wednesday to consider the plan, which centers on the settlement of lawsuits pitting Washington Mutual, the Federal Deposit Insurance Corp. and JPMorgan against one another. The lawsuits were filed after the FDIC seized WaMu’s flagship bank in 2008 and sold its assets to JPMorgan in the largest bank failure in U.S. history.

The judge ruled in January that the proposed settlement was reasonable but refused to confirm WaMu’s plan until changes were made.

Washington Mutual shareholders oppose the new plan, saying it favors hedge funds who dominated negotiations with JPMorgan for their own gain and used inside information from the bankruptcy to trade in Washington Mutual securities.

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