Per AI The Washington Mutual, Inc. (WMI) Liquidating Trust (WMILT) has completed its intended purpose, and the underlying bankruptcy case has been closed. Therefore, it is not possible to simply "reopen" the trust for general claims.
(***Given the info below, one would THINK that the FDIC would have CLOSED the Receivership expeditiously, rather than leave it open 18 years and growing. enabling ANY potential recovered assets to be accounted for. and distributed to creditors & equity following BK payout waterfall... WHY possibly wait so long IF there is no potential for additional asset recovery???)
Key Details
Bankruptcy Case is Closed: The U.S. Bankruptcy Court for the District of Delaware entered an order in December 2019 granting approval to close the Chapter 11 cases for Washington Mutual, Inc..
Final Distributions Made: The Trust has made its final distributions to creditors and equity holders according to the Seventh Amended Plan of Reorganization.
Trust Term Expired: The term of the Trust was extended several times, ultimately through March 19, 2021 (unless dissolved earlier). After fulfilling its obligations, the trust was dissolved.
Challenges to the Plan Addressed: Various appeals and legal challenges related to the settlement and distributions were heard by the courts, but these cases did not result in the wholesale reopening of the entire liquidation process. The courts determined that the settlement was fair and equitable.
Options for Specific Issues
While the entire trust cannot be reopened, a closed bankruptcy case can, in certain specific and limited circumstances, be reopened by filing a motion with the court. This is typically done to address very specific, unaddressed matters, such as:
Undisclosed Assets: If previously unknown or undisclosed assets are discovered.
Specific Legal Claims: To address specific claims if it can be proven that "meaningful relief" is still possible and the issues were not already litigated. (***LIBOR and ???)
Administrative Errors: To fix errors like missing documentation or to add previously unlisted creditors in certain situations.
A party interested in pursuing any such action would need to consult legal counsel specializing in bankruptcy law and file a motion with the original U.S. Bankruptcy Court for the District of Delaware. Further information about the WMI Liquidating Trust can typically be found on the claims agent's website, such as Kurtzman Carson Consultants (KCC).
A closed bankruptcy case, such as that of the Washington Mutual, Inc. Liquidating Trust, can be reopened in limited circumstances "to administer assets, to accord relief to the debtor, or for other cause." A party seeking to reopen a case must file a motion with the court, and the decision is within the court's discretion.
Common types of legal claims or reasons that could potentially lead to a case being reopened include:
Discovery of Unadministered Assets: If previously unknown or undisclosed assets (such as a pending lawsuit not listed in the original filing) are discovered after the case is closed, a trustee or other party may move to reopen the case to administer and distribute those assets to creditors.
Enforcement of the Discharge Injunction: If a creditor attempts to collect a debt that was already legally discharged by the bankruptcy court's final order, the debtor may need to reopen the case to seek court intervention and enforce the permanent injunction that prevents collection efforts.
Correction of Errors: Cases can be reopened to correct administrative or clerical errors in the court records or bankruptcy papers, such as omitting a creditor from the schedules.
Addressing Undischarged Debts: In some situations, a debtor may seek to reopen a case to add an omitted creditor and have the associated debt discharged, although this is generally only granted if the creditor would not have received any payment anyway ("no-asset" cases).
Lien Avoidance: A debtor might need to reopen a case to file a motion to remove a specific judgment lien from their property if it impairs an exemption they are entitled to.
Fraud or Misrepresentation: If it can be proven that a settlement or court order was obtained through fraud, such as intentionally hidden evidence or false testimony, the court may reopen the case to address the injustice.
A general dissatisfaction with the previous outcome or a desire to relitigate issues that were already fully addressed and decided by the court are not typically valid reasons for reopening a closed case.
9 sites
Reopening a Federal Bankruptcy Case
Dec 13, 2015 — There are a variety of reasons why a federal bankruptcy case may be reopened after the debtor has been discharged and ...
National Legal Research Group
11 U.S. Code § 350 - Closing and reopening cases
11 U.S. Code § 350 - Closing and reopening cases. ... After an estate is fully administered and the court has discharged the trust...
LII | Legal Information Institute
Open and Shut: Southern District Upholds Denial of Trustee's ...
Mar 11, 2014 — The district court noted that a case can be closed under section 350(a) only after an estate's assets have been “fully...
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