Mr Cooper Group Inc fka COOP

[lodas]

The following is a comprehensive list of all court cases associated with the chapter 11, and WAMU cases:....the text from this post is from the amended POR 7......reads it before you dismiss it......Lodas

B.
The Chapter 11 Cases

1.
Certain Administrative Matters

a.
“First-Day” Orders

Due to the limited nature of WMI’s operations, few first-day motions were filed on the Petition Date. The Bankruptcy Court did, however, enter orders authorizing, among other things, (i) the joint administration of the Debtors’ chapter 11 cases; (ii) an extension of time to file the Debtors’ schedules of assets and liabilities and statements of financial affairs; (iii) the waiver of the requirement to file a list of Creditors; and (iv) maintenance by the Debtors of their existing bank accounts and business forms.

b.
Appointment of the Creditors’ Committee

Section 1102 of the Bankruptcy Code requires that as soon as practicable after the commencement of a chapter 11 case, the United States Trustee shall appoint an official committee of unsecured Creditors. On October 15, 2008, the U.S. Trustee appointed the following members to form the Creditors’ Committee: The Bank of New York Mellon Trust Company, N.A., Law Debenture Trust Company of New York, Wells Fargo Bank, N.A., and Wilmington Trust Company.51

The Creditors’ Committee retained Pepper Hamilton LLP and Akin Gump Strauss Hauer & Feld LLP as co-counsel. The Creditors’ Committee also retained FTI Consulting, Inc. as its financial advisors.

c.
Appointment of the Equity Committee

On January 11, 2010, the U.S. Trustee formed the Equity Committee. Immediately thereafter, the Debtors filed a motion to disband the Equity Committee, which motion was denied by the Bankruptcy Court by order, dated February 17, 2010. As of the date hereof, the Equity Committee is comprised of three members. The Equity Committee originally retained Venable LLP and Benesch, Friedlander, Coplan & Aronoff LLP (“Benesch”) as its counsel. The Equity Committee also retained Peter J. Solomon Company as its financial advisor. On March 4, 2010, Benesch withdrew as Delaware counsel to the Equity Committee. The Bankruptcy Court entered an order authorizing the retention of

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51 Verizon Services Corp. was originally appointed to, but is no longer a member of, the Creditors’ Committee.

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Ashby & Geddes, P.A. as Delaware counsel to the Equity Committee on April 8, 2010. The Equity Committee also retained Susman Godfrey LLP as its lead counsel, replacing Venable LLP. Pursuant to an order, dated May 24, 2011, the Equity Committee retained Sullivan Hazeltine Allinson LLC as Delaware special conflicts counsel. In addition, on May 16, 2011, the Equity Committee filed an application to retain BDO USA, LLP (“BDO”) as tax advisor to the Equity Committee, which application the Bankruptcy Court approved, by order, dated June 6, 2011. Pursuant to an order dated July 12, 2011, the Equity Committee also retained Schwabe, Williamson & Wyatt as corporate and securities counsel.

d.
Retention of Professionals

On October 30, 2008 and November 6, 2009, the Bankruptcy Court authorized the Debtors to retain Richards, Layton & Finger, P.A. and Weil, Gotshal & Manges LLP as their attorneys, effective as of the Petition Date. The Bankruptcy Court also authorized the Debtors to employ and retain, among others, the following firms: (a) Davis Wright Tremaine LLP, as special counsel; (b) Elliott Greenleaf, as special litigation counsel and conflicts counsel; (c) Gibson, Dunn & Crutcher LLP, as special tax counsel; (d) John W. Wolfe, P.S., as special counsel; (e) Miller & Chevalier Chartered, as special tax counsel; (f) Bingham McCutchen LLP, as successor in interest to McKee Nelson LLP, as special tax counsel; (g) Perkins Coie LLP, as special counsel; (h) Quinn Emanuel Urquhart & Sullivan, LLP, as special litigation counsel and conflicts counsel; (i) Shearman & Sterling LLP, as special tax counsel; (j) Silverstein & Pomerantz LLP, as special tax counsel; (k) Simpson, Thacher & Bartlett LLP, as special counsel, and (l) Klee, Tuchin, Bogdanoff & Stern LLP as special litigation counsel.

The Bankruptcy Court has also authorized the Debtors to employ and retain (a) Alvarez & Marsal North America, LLC, as restructuring advisors to the Debtors; (b) CP Energy Group, LLC, as investment banker; (c) Domain Assets, LLC d.b.a. Consor Intellectual Asset Management, as intellectual property consultants; (d) Grant Thornton LLP, as tax advisors; (e) Kurtzman Carson Consultants LLC, as Claims and noticing agent; (f) PricewaterhouseCoopers LLP, as special accountants; (g) Blackstone, as financial advisor; (h) Ernst & Young LLP as accounting, tax and reporting service provider; and (i) Valuation Research Corporation, as valuation service provider for certain of the Debtors’ assets.

In addition, the Bankruptcy Court authorized the Debtors to employ professionals utilized in the ordinary course of business, including Arnold & Porter LLP, as litigation counsel; Corporate Counsel Solutions PLLC, to provide information technology and other general contract related legal services; Goodwin Procter LLP, as litigation counsel; Milliman USA, Inc., as reinsurance advisor; The Law Firm of David H. Zielke, PS, as structured finance advisor; Howard IP Law Group, PC, as legal specialist in patent matters; the public relations services of Joele Frank, Wilkinson Brimmer Katcher; Bass, Berry & Sims PLC, as Tennessee tax counsel; Budsberg Law Group, PLLC, as Washington state counsel; and Jenner & Block LLP, as counsel with respect to director and officer insurance issues.

e.
Schedules/Bar Date

On December 19, 2008, the Debtors filed with the Bankruptcy Court their schedules of assets and liabilities (the “Schedules”) and statements of financial affairs (the “SOFAs”). On January 27, 2009 and February 24, 2009, WMI filed with the Bankruptcy Court its first and second, respectively, amended Schedules. On January 14, 2010, WMI filed with the Bankruptcy Court further amendments to its SOFAs. By order, dated January 30, 2009, the Bankruptcy Court established March 31, 2009 as the deadline for filing proofs of Claim against the Debtors. Over 4,050 proofs of Claim have been filed against the Debtors in these chapter 11 cases.

In the January Opinion, the Bankruptcy Court found that, pursuant to sections 726(a) and 1129 of the Bankruptcy Code, the Debtors must satisfy Late-Filed Claims prior to paying Postpetition



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Interest Claims. Accordingly, the Debtors created Class 12A for Late-Filed Claims (i.e., a Claim against any of the Debtors or the Debtors’ estates, (i) proof of which was filed subsequent to March 31, 2009, but prior to the commencement of the hearing on confirmation of the Seventh Amended Plan, and that does not merely amend or supersede any Claim that was filed prior to such date, and (ii) which has not been listed by such Debtor in its Schedules52 as liquidated in amount and not disputed or contingent). Treatment of Late-Filed Claims pursuant to the Seventh Amended Plan is described in greater detail in Section VI.B.13 of this Disclosure Statement.

f.
Vendor Stipulation/Executory Contracts and Unexpired Leases

Section 365 of the Bankruptcy Code grants a debtor the power, subject to the approval of the Bankruptcy Court, to assume or reject executory contracts and unexpired leases. If an executory contract or unexpired lease is rejected, the counterparty to the agreement may file a Claim for damages incurred by reason of the rejection. Such Claim is a general unsecured Claim against a debtor’s estate.

Prior to the Petition Date, WMI was party to numerous contracts, many of which were for the benefit of WMB. As a result of the FDIC’s seizure of WMB’s assets, WMI determined that many of these contracts were no longer needed. However, to assist JPMC with the integration of WMB’s business and to mitigate potential administrative Claim exposure against the Debtors’ estates, the Debtors and JPMC entered into a stipulation regarding certain vendor contracts (the “Vendor Stipulation”), which was approved by the Bankruptcy Court by order dated October 16, 2008. Pursuant to the Vendor Stipulation, the Debtors and JPMC agreed that, among other things, (i) JPMC was authorized to negotiate new agreements with WMI’s vendors, (ii) JPMC would pay such vendors for goods and services provided after the Petition Date, and (iii) the Debtors would cooperate with JPMC to ensure continued performance by the vendors. In addition, JPMC is required to give WMI notice twenty (20) days prior to the date it no longer wishes to avail itself of the benefits of certain vendor contracts, after which JPMC is relieved of the related liability. In most instances, upon the Debtors’ receipt of such notice from JPMC, the identified contracts were rejected. Pursuant to the Global Settlement Agreement, on the effective date thereof, the Vendor Stipulation will be terminated and deemed of no further force and effect.

On March 25, 2009, the Bankruptcy Court entered an order establishing procedures for the rejection of executory contracts and unexpired leases. The approved procedures permit the Debtors to reject an executory contract on 10 days notice, without the additional expense to the Debtors’ estates and the attendant delay that would result if the Debtors were required to proceed by separate motion and hearing for every executory contract and unexpired lease they determined to reject. Pursuant to these procedures, the Debtors have rejected numerous unnecessary and economically burdensome contracts.

In addition, to date, outside of the context of the Vendor Stipulation and contracts assigned in conjunction with a sale or settlement, by order dated February 16, 2009, the Bankruptcy Court authorized the Debtors to (i) assume one unexpired lease of nonresidential real property and (ii) assume and assign to JPMC two unexpired leases of nonresidential real property.

2.
Litigation with the FDIC and JPMC

The following is a general overview of the litigation between the Debtors, JPMC and the FDIC that is resolved pursuant to the Global Settlement Agreement. Pursuant to the Global Settlement Agreement, and to the extent and on the terms set forth therein, the parties have agreed to release each
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52 The Debtors filed Schedules on December 19, 2008, which were amended pursuant to filings dated January 27, 2009 and February 24, 2009 [Docket Nos. 475, 477, 619, and 709].

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other of the claims described below. As stated, the Bankruptcy Court has approved the Global Settlement Agreement, but the effectiveness of that agreement remains conditioned on, among other things, confirmation and consummation of a plan of reorganization premised upon that agreement.

a.
The D.C. Action

On December 30, 2008, the Debtors, on their own behalf, and on behalf of each of WMI’s direct and indirect non-banking subsidiaries filed a proof of claim against the FDIC Receiver in connection with WMB’s receivership, asserting claims on behalf of the Debtors’ chapter 11 estates (the “Debtors’ claims”). The Debtors’ proof of claim requested, among other things, compensation for the Debtors’ Equity Interest in WMB, recognition of ownership interests in WMI’s assets claimed by the FDIC, allowance of a protective claim for payment of the Debtors’ deposits, payments of amounts owed to WMI by WMB and the avoidance of certain transfers made by WMI to WMB as a preference or fraudulent transfer, which were transferred or claimed by the FDIC and/or JPMC, and for other money owed by WMB. By letter, dated January 23, 2009, the FDIC notified the Debtors that the FDIC had disallowed the Debtors’ proof of claim in its entirety. The FDIC’s letter also notified the Debtors of their right pursuant to 12 U.S.C. § 1821(d)(6)(A) to challenge the disallowance of their Claim by commencing a lawsuit within sixty (60) days of the notice of disallowance.

Consistent therewith, on March 20, 2009, the Debtors initiated the D.C. Action by filing a complaint in the D.C. District Court (Case No. 09-cv-00533 (RMC)), as required pursuant to 12 U.S.C. § 1821, against the FDIC Receiver and FDIC Corporate. In addition to appealing the disallowance of their proof of claim, the Debtors’ complaint alleged, among other things, that the FDIC sold WMB’s assets for less than they were worth, and as a result, the FDIC breached its statutory duty under the Federal Deposit Insurance Act to maximize the net present value of WMB’s assets. The Debtors’ complaint further alleged that the FDIC’s failure to compensate the Debtors for what they would have received in a straight liquidation constitutes (i) a taking of the Debtors’ property without just compensation in violation of the Fifth Amendment of the U.S. Constitution and (ii) a conversion of the Debtors’ property in violation of the Federal Tort Claims Act.

By motions, dated June 11, 2009 and June 15, 2009, the FDIC Receiver and FDIC Corporate, respectively, filed motions to dismiss the D.C. Action, which motions were opposed by the Debtors. Contemporaneously with their motions to dismiss, the FDIC filed an answer to the Debtors’ complaint, as amended, and counterclaims against the Debtors. The Debtors opposed the FDIC’s motions to dismiss and thereafter, by motion dated July 27, 2009, moved to dismiss the amended counterclaims asserted by the FDIC and to stay the remainder of the D.C. Action, in its entirety, in favor of the pending adversary proceedings in the Bankruptcy Court (the “Debtors’ Motion to Stay/Dismiss”). The FDIC and JPMC both opposed the Debtors’ Motion to Stay/Dismiss. On January 7, 2010, the D.C. District Court granted the Debtors’ Motion to Stay/Dismiss in part and denied all the pending motions to dismiss. Accordingly, the D.C. Action was stayed in its entirety pending outcome of the adversary proceedings pending in the Bankruptcy Court.

JPMC and certain WMB Notes Holders were permitted to intervene in the D.C. Action. The Creditors’ Committee also filed a motion to intervene which was opposed by the FDIC, JPMC and the WMB Notes Holders. The Bankruptcy Court did not rule on the Creditors’ Committee’s proposed intervention.



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b.
The Adversary Proceedings

As described above, during the course of the chapter 11 cases, the Debtors have engaged in extensive litigation with JPMC. All such litigation relates to or arises from JPMC’s purchase of WMB’s assets.

(i)
The JPMC Adversary Proceeding

On March 24, 2009, JPMC commenced the JPMC Adversary Proceeding against the Debtors and the FDIC, styled JPMorgan Chase Bank, N.A. v. Washington Mutual, Inc., et al., Adversary Pro. No. 09-50551(MFW) (the “JPMC Adversary Proceeding”), in the Bankruptcy Court seeking a declaratory judgment with respect to the ownership of certain disputed assets. Those assets and interests include, among others, the Trust Preferred Securities, the right to the Tax Refunds, the Disputed Accounts, certain judgment awards arising from the Goodwill Litigation (as described below), assets of the trusts supporting deferred compensation arrangements covering current and former employees of WMB, equity interests in Visa Inc., certain intellectual property and certain contractual rights.

On May 29, 2009, the Debtors filed an answer to JPMC’s complaint and asserted various counterclaims against JPMC claiming ownership rights over disputed assets and seeking avoidance of certain prepetition transfers of assets to WMB and, subsequently to JPMC. JPMC moved to dismiss the counterclaims asserted by the Debtors against JPMC, which motion was opposed by the Debtors, and denied by the Bankruptcy Court by order dated September 14, 2009. On September 18, 2009, JPMC sought leave to appeal the Bankruptcy Court’s ruling, which was opposed by the Debtors. JPMC filed an answer to the Debtors’ counterclaims on September 21, 2009.

The Debtors estimated that certain of their claims and the claims asserted against them in the JPMC Adversary Proceeding could take at least one year, and as much as four years, to fully litigate, depending upon the circumstances and whether the parties to the litigation pursued any appeals.

(ii)
Turnover Action

On April 27, 2009, the Debtors commenced the Turnover Action against JPMC, styled Washington Mutual, Inc. et al. v. JPMorgan Chase Bank, N.A., Adversary Pro. No. 09-50934(MFW) (the “Turnover Action”), in the Bankruptcy Court to recover approximately $4 billion that WMI and WMI Investment had on deposit at WMB and FSB (i.e., the Disputed Accounts), including an Admin Account, which are now held by JPMC, after assuming all the deposit liabilities of WMB and FSB.

JPMC filed a motion to dismiss the Turnover Action, or, in the alternative to consolidate the Turnover Action with the JPMC Adversary Proceeding, which motion was opposed by the Debtors. The FDIC and JPMC also filed motions to stay the Turnover Action and the JPMC Adversary Proceeding, asserting that the Claims must be resolved by the D.C. District Court. At a hearing held before the Bankruptcy Court on June 24, 2009, both of JPMC’s motions and the FDIC’s motion were denied. Orders were entered to this effect on July 6, 2009. Both JPMC and the FDIC have sought leave to appeal the orders denying their motions to dismiss or stay the JPMC Adversary Proceeding and the Turnover Action, which were opposed by the Debtors. JPMC filed counterclaims, as amended, in the Turnover Action on or about August 10, 2009. The Debtors moved to dismiss those counterclaims, which motion is still pending.

By order dated August 28, 2009, the Bankruptcy Court permitted the WMB Notes Holders to intervene in the JPMC Adversary Proceeding and the Turnover Action.



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The parties completed briefing on the Debtors’ motion for summary judgment in the Turnover Action, which motion and the oppositions thereto—filed by the FDIC Receiver, JPMC, and the WMB Notes Holders—were considered at a hearing before the Bankruptcy Court on October 22, 2009. Prior to its approval of the Global Settlement Agreement, the Bankruptcy Court’s decision with respect to the Debtors’ summary judgment motion remained sub judice, although the Bankruptcy Court indicated that it was prepared to rule.

c.
FDIC Motion for Relief from Stay

On November 4, 2009, the FDIC Receiver filed a motion for relief from the automatic stay to permit the FDIC Receiver to exercise its purported contractual right under the Purchase and Assumption Agreement to direct JPMC to return the Deposits to the FDIC Receiver. The Debtors opposed such relief.

d.
The Texas Litigation and the Debtors’ 2004 Examination Requests

On or about February 16, 2009, various insurance company plaintiffs, including American National Insurance Company, filed suit in the 122nd District Court of Galveston County, Texas, in the case captioned American Nat’l Ins. Co., et al. v. JPMC Chase & Co., et al. (Case No. 09-CV-0199) (the “Texas Litigation”). In their complaint, the plaintiffs asserted various causes of action against JPMC in connection with its acquisition of WMB’s assets. Specifically, the plaintiffs asserted that there was a premeditated plan by JPMC designed to damage WMB and FSB, and thereby enable JPMC to acquire WMI’s banking operations at a “fire sale” price. The causes of action asserted by the plaintiffs include various theories of business tort and tortious interference. JPMC has disputed and contested these allegations. Subsequent to the filing of the Texas Litigation, JPMC and the FDIC Receiver, an intervening defendant, removed the action to the United States District Court for the Southern District of Texas (Case No. 09-00044). Upon the motion of the FDIC Receiver, by order, dated September 9, 2009, the United States District Court for the Southern District of Texas then transferred the Texas Litigation to the D.C. District Court (Case No. 09-cv-01743 (RMC)). On April 13, 2010, the D.C. District Court entered an order granting motions to dismiss filed by JPMC and the FDIC Receiver, and stating that (i) the FDIC Receiver was a necessary party to that lawsuit but that (ii) the plaintiffs failed to pursue their Claims against the FDIC Receiver administratively through the exclusive receivership Claims process, such that the plaintiffs’ Claims were barred by the Financial Institutions Reform, Recovery and Enforcement Act (“FIRREA”). On May 10, 2010, the plaintiffs filed a motion to alter or amend the April 13, 2010 judgment and requested leave to file an amended complaint. On June 4, 2010, each of the FDIC and JPMC filed oppositions to plaintiffs’ motion and, on July 19, 2010, the D.C. District Court entered an order denying plaintiffs’ motion, which order the plaintiffs have appealed.

In connection with the Texas Litigation, on May 1, 2009, the Debtors filed a motion (the “Rule 2004 Motion”), pursuant to Bankruptcy Rule 2004, seeking entry of an order directing the examination of JPMC. JPMC opposed the Rule 2004 Motion. By Opinion and Order, dated June 24, 2009, the Bankruptcy Court granted the Rule 2004 Motion. JPMC’s subsequently-filed motion for reconsideration of this Court’s Opinion and Order was denied. Thereafter, JPMC began producing documents to the Debtors for their review.

As a result of the review of certain of the documents produced by JPMC, the Debtors determined that additional fact investigation was necessary. On December 14, 2009, the Debtors filed a motion, pursuant to Bankruptcy Rule 2004, seeking court authority to conduct additional examinations of witnesses and request the production of documents from various third-parties (the “Third Party 2004 Motion”), including, among others, the FDIC, the OTS, the U.S. Department of the Treasury, and former U.S. Treasury secretary Henry M. Paulson, Jr. The Third Party 2004 Motion was denied by the


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Bankruptcy Court. Certain third parties, however, agreed to provide documents responsive to the Debtors’ requests on a consensual basis.

3.
The Global Settlement Agreement

a.
Overview

As noted above, the Seventh Amended Plan incorporates, and is expressly conditioned upon the effectiveness of, the Global Settlement Agreement, which the Bankruptcy Court approved in both the January Opinion and the September Opinion, and which proposes to compromise and settle certain significant issues in dispute among the parties thereto.

Pursuant to the terms of the Global Settlement Agreement, the Debtors, JPMC, the FDIC Receiver, FDIC Corporate, and the Creditors’ Committee have agreed to compromise, settle and release, as to the parties thereto, certain disputes among such parties including, but not limited to the disputes at issue in (i) the D.C. Action, (ii) the JPMC Adversary Proceeding, (iii) the Turnover Action, (iv) the Rule 2004 Motion, (v) the proof of claim filed by the Debtors and each of WMI’s direct and indirect non-banking subsidiaries with the FDIC Receiver, (vi) the proofs of Claim filed in these Chapter 11 Cases by JPMC and the FDIC Receiver, (vii) the transfer of the Trust Preferred Securities and the consequent issuance of the REIT Series, and (viii) certain other disputed assets and liabilities. The Global Settlement Agreement is incorporated into this Disclosure Statement by reference as if fully set forth herein.

b.
Certain Terms of the Global Settlement Agreement

(i)
Treatment of the Disputed Accounts

In partial consideration for the assets sold pursuant to the Global Settlement Agreement and the releases and other benefits provided to the Released Parties pursuant to the Seventh Amended Plan, the JPMC Entities (as defined in the Global Settlement Agreement), the FDIC Receiver and FDIC Corporate will (i) waive any and all Claims, rights and liabilities with respect to the funds, in excess of $4 billion, in the Disputed Accounts, and (ii) take such actions, if any, as may be reasonably requested by WMI, including, without limitation, filing with the Bankruptcy Court such notices or pleadings setting forth the waiver of any and all interests in the Disputed Accounts. The FDIC Receiver and FDIC Corporate will waive and release any and all interest in and any and all rights to seize or set off against the Disputed Accounts and any funds contained therein in accordance with Section 9.5 of the Purchase and Assumption Agreement including, without limitation, by withdrawing with prejudice the motion filed by the FDIC Receiver seeking relief from the automatic stay imposed by section 362 of the Bankruptcy Code to permit the FDIC Receiver to exercise its purported contractual right, pursuant to the Purchase and Assumption Agreement, to direct JPMC to transfer the funds on deposit in the Disputed Accounts to the FDIC Receiver (the “FDIC Stay Relief Motion”). JPMC will pay to WMI or such other of the WMI Entities (as defined in the Global Settlement Agreement) as WMI will designate, the amounts contained in the Disputed Accounts as of the effective date of the Global Settlement Agreement, net of eighty percent (80%) of the amounts received by WMI during the period from the Petition Date up to and including the date of the Global Settlement Agreement attributable to refunds of taxes deposited in the Disputed Accounts (including the interest component of any such refunds and interest, if any, earned thereon), free and clear of all liens, Claims, interests and encumbrances of any Person.

In addition, JPMC, as successor to WMB, will (i) release any security interest in or lien upon that certain administrative account, having a balance, as of the Petition Date, in the approximate amount of $52.6 million (the “Admin Account”) and the monies contained therein and (ii) release and




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otherwise transfer the Admin Account and the funds contained therein in accordance with the direction of WMI.

(ii)
Allocation of the Tax Refunds

WMI believes that, in total, the Tax Group is entitled to federal and state Tax Refunds, net of tax payments estimated to be owed to taxing authorities, of approximately $5.5 to $5.8 billion in taxes in the aggregate, including interest through a projected future date of receipt. Over 90% of this amount reflects the federal income tax refunds already received, with certain unrelated federal tax refund litigation still pending.53 On August 27, 2010, the Bankruptcy Court approved a Stipulation Regarding Establishment of Segregated Account for Tax-Related Payments, among the Debtors, the FDIC Receiver and JPMC [D.I. 5365], pursuant to which the parties agreed to a protocol for the deposit and retention of the Tax Refunds, as they are received, in a segregated interest bearing account, pending approval and consummation of the Global Settlement Agreement. This account has been established and all Tax Refunds received since the execution of the Global Settlement Agreement have been deposited therein. This includes federal Tax Refunds (approximately $5.278 billion in amount),54 and state Tax Refunds totaling approximately $4.3 million.

Allocation of the Tax Refunds. The ownership of the Tax Refunds is in dispute. Pursuant to the Global Settlement Agreement, the parties thereto have agreed to share the Tax Refunds as follows:

The First Portion. The amount of net Tax Refunds (including state and local income taxes) that are received, and would have been receivable absent the Worker, Homeownership, and Business Assistance Act of 2009’s extension of the federal net operating loss (“NOL”) carryback period (the “First Portion”) will be allocated as follows: 20% of such refunds allocated to the Debtors and the remaining 80% of such refunds to JPMC. The Debtors currently estimate that the First Portion of the Tax Refunds will be approximately $2.7 to $3.0 billion in the aggregate, approximately $540 to $600 million of which will be allocated to the Debtors’ estates.

The Second Portion. Any additional net Tax Refunds, attributable to the Worker, Homeownership, and Business Assistance Act of 2009, will be allocated as follows: 69.643% of such refunds will be allocated to WMI and 30.357% of such refunds will be allocated to the FDIC Receiver.

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53 Certain of the pending federal tax refund litigations relate to claimed deductions for the amortization and abandonment of certain assets in certain tax years of a predecessor company in the time period 1991 through 1998. These assets were acquired by the predecessor company in exchange for its acquisition of certain failed institutions in the early 1980’s. The first of these refund claims was filed in the U.S. District Court of Western Washington at Seattle (“District Court”). In this case, the Debtors and the Government each filed a Motion for Summary Judgment seeking a determination as to whether the Tax Group was entitled to a tax basis in the specified assets. The District Court ruled in favor of the Government. Washington Mutual, Inc. v. United States, No. C06-1550-JCC (W.D. Wash. August 12, 2008). The Debtors appealed this decision to the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”), which reversed the decision of the District Court. Washington Mutual, Inc. v. U.S., 636 F.3d 1207 (9th Cir. March 3, 2011). The Ninth Circuit remanded the case to the District Court to determine the amount of tax basis and the corresponding amount of tax refunds. The government did not appeal the Ninth Circuit decision to the United States Supreme Court. A trial to determine the amount of tax basis and refund is scheduled to commence on March 26, 2012 in the District Court.

54 The Debtors estimate that, in the aggregate, another $200 million to $500 million of net Tax Refunds could be recovered through ongoing tax litigation and negotiation. Because such refunds are part of the First Portion (as defined below), WMI’s portion of these refunds would be 20% of the total received.


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As described more fully in Sections III.B.6.b and V.B.5.g(i) hereof, pursuant to the terms of the Seventh Amended Plan, a certain portion of WMI’s share of such refunds will be distributed to certain holders of WMB Senior Notes, in the aggregate amount of Three Hundred Thirty-Five Million Dollars ($335 million). The Debtors have received the Second Portion of the Tax Refunds in the amount of $2.779 billion, approximately $1.94 billion of which would be allocated to the Debtors’ estates, including any distribution that may be payable to holders of WMB Senior Notes.

Per the Global Settlement Agreement, the Debtors currently estimate that their share of the total estimated Tax Refunds will be approximately $2.17 billion, after the distribution that may be payable to holders of WMB Senior Notes.

(iii)
Transfer of Assets to JPMC

Pursuant to the Global Settlement Agreement, WMI, WMI Investment, Ahmanson Obligation Company, H.S. Loan Corporation, WAMU 1031 Exchange, WMMRC, WM Citation Holdings, LLC, WMI Rainier LLC and Washington Mutual Capital Trust 2001 (collectively, the “WMI Entities”), the FDIC Receiver and the Receivership, will sell, transfer, and assign (or cause to be sold, transferred or assigned) to the JPMC Entities, and the JPMC Entities will acquire, pursuant to the Seventh Amended Plan and sections 363 and 365 of the Bankruptcy Code, free and clear of all liens, Claims and encumbrances, or otherwise waive and relinquish any and all right, title and interest any of the WMI Entities, the FDIC Receiver and the Receivership may have in the following assets, each of which is described in detail herein: (i) the Trust Preferred Securities, (ii) the Washington Mutual, Inc. Flexible Benefits Plan (the “Medical Plan”) and any checks made out to or received by WMI or otherwise for the benefit of the Medical Plan including pharmacy rebates in connection with contracts associated with the Medical Plan which includes uncashed checks in an amount equal to the pharmacy rebates received by the WMI Entities from and after the Petition Date currently estimated to be approximately $776,000, (iii) those certain JPMC Rabbi Trusts, set forth in the Global Settlement Agreement and the Seventh Amended Plan, and certain JPMC Policies (i.e., BOLI/COLI policies and the proceeds thereof), as identified in the Global Settlement Agreement and as defined in the Seventh Amended Plan, (iv) the two defined benefit plans sponsored by WMI, the WaMu Pension Plan (the “WaMu Pension Plan”) and the Retirement Income Plan for the Salaried Employees of Lakeview Savings Bank (the “Lakeview Pension Plan” and, together, the “Pension Plans”) and all of WMI’s interest in the assets contained in any Pension Plan-related trusts or assets that are otherwise associated with such plans (subject to the correction and satisfaction of certain potential defects and remediation obligations, as set forth in the Global Settlement Agreement), (v) the proceeds of litigation commenced by Anchor Savings Bank FSB, described herein, (vi) the Visa Shares and the VISA Strategic Agreement (as defined in the Global Settlement Agreement), (vii) certain intellectual property identified in the Global Settlement Agreement and as described below, (viii) WMI Investment’s indirect membership interest in a portfolio holding company, JPMC Wind Investment Portfolio LLC, which owns an Equity Interest in certain wind investment projects, discussed below, (ix) certain bonds issued by certain insurance or bonding companies on behalf of WMB and FSB, pursuant to that certain general agreement of indemnity, dated as of June 14, 1999, executed and delivered by WMI, and (x) certain Tax Refunds (as discussed herein and as set forth in Section 2.4 of the Global Settlement Agreement), in each case, free and clear of all liens, Claims, interests and encumbrances, except for any Claim that is an Allowed JPMC Assumed Liability.

(iv)
Transfer of Assets to the Debtors

The Global Settlement Agreement provides that the JPMC Entities will sell, transfer, and assign to the WMI Entities, and the WMI Entities will acquire, pursuant to the Seventh Amended Plan and sections 363 and 365 of the Bankruptcy Code, any and all right, title and interest any of the JPMC Entities may have in (i) certain rabbi trusts and certain BOLI-COLI policies and the proceeds thereof,


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identified in the Global Settlement Agreement, (ii) the stock of H.S. Loan Corporation, 98.67% of which is owned by WMI and 1.33% of which is owned by WMB, (iii) the WMI Intellectual Property (as defined in the Global Settlement Agreement), and (iv) WMI’s portion of the Tax Refunds, as set forth herein and in Section 2.4 of the Global Settlement Agreement, in each case, free and clear of all liens, claims, interests and encumbrances of any entity.

(v)
Additional Consideration to the Debtors

As additional consideration for the asset sale and compromise and settlement embodied in the Global Settlement Agreement, and as further consideration for the releases and other benefits provided to JPMC pursuant to the Seventh Amended Plan, the parties have agreed that (i) JPMC will pay WMI $25 million for WMI’s 3.147 million Class B shares of Visa Inc., WMI will retain all dividends with respect thereto received prior to the effective date of the Global Settlement Agreement, and JPMC will assume liabilities of the WMI Entities relating to that certain “Interchange” litigation (described in Section V.B.6.i below), as set forth in the Global Settlement Agreement; (ii) JPMC will (a) assume all obligations of WMB, WMB’s subsidiaries or JPMC to subsidiaries of WMI pursuant to certain intercompany notes, resulting in a net amount of approximately $180 million of principal and interest which will be paid by JPMC to WMI, (b) JPMC, the FDIC Receiver and WMI will waive all remaining intercompany claims, resulting in a net amount of approximately $9 million of WMI receivables that WMI has agreed to waive, and (c) each of JPMC and the FDIC Receiver will waive their Claims against WMI, which total approximately $274 million, regarding certain disputed liabilities related to the funding of the WaMu Pension Plan; (iii) JPMC will cause its affiliates to continue providing loan servicing with respect to certain mortgage loans owned by the Debtors or their affiliates and the remittal of checks and payments received in connection therewith; (iv) JPMC will (a) assume any and all liabilities and obligations of the WMI Entities for remediation or clean-up costs and expenses, in excess of applicable and available insurance, arising from or relating to that certain litigation styled California Dept. of Toxic Substances Control, et al. v. American Honda Motor Co., Inc., et al., No. CV05-7746 CAS (JWJ), currently pending in the United States District Court for the Central District of California (the “BKK Litigation”), and certain agreements related thereto (the “BKK Liabilities”), (b) pay or fund the payment of BKK Liabilities to the extent such liabilities are not covered by applicable insurance policies, (c) defend the Debtors against and reimburse the Debtors for any distribution which the Debtors become obligated to make on account of remediation or clean-up costs and expenses not otherwise covered by the BKK-Related Policies (as defined in the Global Settlement Agreement) and/or reimbursed by the BKK-Related Carriers (as defined in the Global Settlement Agreement), and (d) indemnify (subject to certain limitations with respect to WMI Rainier LLC) the WMI Entities for the BKK Liabilities to the extent that such liabilities are not covered by applicable insurance policies; provided, however, that nothing in the Seventh Amended Plan or the Confirmation Order is intended to, nor shall it, release any non-Debtor or non-Debtor Entity that may be a Released Party or a Related Person, in connection with any legal action or Claim brought by CDTSC or the BKK Group relating to the BKK Site that is the subject of the BKK Litigation; (v) JPMC will assume the JPMC Assumed Liabilities (as defined the Seventh Amended Plan), namely certain liabilities in connection with the assets it receives pursuant to the Global Settlement Agreement and, on or after the Effective Date of the Seventh Amended Plan, JPMC will pay or fund the payment of certain Allowed Claims arising from or relating to such liabilities (defined as Allowed JPMC Assumed Liability Claims in the Seventh Amended Plan); (vi) the JPMC Entities, the FDIC Receiver and FDIC Corporate (as applicable) will be deemed to have waived and released any and all rights and claims relating to any claims or causes of action associated with the American Savings Litigation, including rights and claims to the Registry Funds and the American Savings Escrow (discussed below); (vii) JPMC has agreed to (a) pay or otherwise satisfy any proofs of claim filed against the Debtors by vendors with respect to services, software licenses, or goods provided to WMB and its subsidiaries (whether prior or subsequent to JPMC’s acquisition of the assets of WMB) pursuant to contracts between WMB and/or one or more of its subsidiaries and such vendors (to the extent such portion of any such Claim becomes an


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Allowed Claim and to the extent payable, in whole or in part, by the Debtors), (b) pay to WMI $50 million, which funds will be deposited into an escrow