Washington Mutual Preferred fka WAMPQ

[DJN]

http://www.law.com/jsp/tal/digestTAL.jsp?id=1202429373614

The American Lawyer: Litigation Daily

Battle Brewing over Firesale of WaMu Banking Assets
By Ben Hallman
March 25, 2009
In one sense, at least, Lehman Brothers's precipitous Chapter 11 filing was a blessing in (very heavy) disguise: The investment bank was involved in the sale of its assets in the days and weeks after it entered bankruptcy. Washington Mutual wasn't as fortunate. Seized by the Federal Deposit Insurance Corp. on September 25 last year, the bank had no control over the disposition of its core banking assets, which were quickly sold to JPMorgan Chase & Co. for $1.9 billion.

Now that hasty sale has become the subject of what promises to be protracted litigation. At its core is a question: What, exactly, did JP Morgan buy on that fall day?

The first salvo was fired last week in Washington, D.C., federal district court by WaMu's holding company, Washington Mutual Inc., which filed for Chapter 11 bankruptcy protection the day after the FDIC seized the bank. The holding company, represented by Adam Strochak and David Benz at Weil, Gotshal & Manges, filed a complaint against the FDIC, seeking to recover billions of dollars in tax refunds, capital contributions, and trust securities. Among the holding company's many demands for relief is an order directing the FDIC to provide a list of all the assets sold to JPMorgan. WaMu's core assets were sold off so quickly, it seems, that those left behind aren't quite sure what was taken.

On Tuesday, JPMorgan Chase, represented by David Braff at Sullivan & Cromwell, filed a countersuit against the FDIC and the holding company in Delaware bankruptcy court, stating that the bank wants to "protect its economic interests in the assets."

We've placed calls to the lawyers involved. We'll update the post when we hear back from them.