Washington Mutual Inc pfd K (fka WAMKQ)

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Washington Mutual Holders May Get Official Ch 11 Committee

http://www.djnewsplus.com/article/DN-CO-20091218-009571.html?mod=J1&a=T+Wire&h=Washington+Mutual+Holders+May+Get+Official+Ch+11+Committee+

DOW JONES NEWSWIRES


By Peg Brickley
Of DOW JONES DAILY BANKRUPTCY REVIEW



The Justice Department is considering appointing an official committee to represent shareholders in the bankruptcy case of Washington Mutual Inc. (WAMUQ), the former parent of the thrift involved in the largest banking collapse in U.S. history, Washington Mutual Bank.

"The interests of equity need to be protected," wrote Roberta A. DeAngelis, acting U.S. Trustee for the Delaware bankruptcy court where WaMu's former parent is operating under Chapter 11 protection.

DeAngelis pushed the company for a sortable list of shareholder names to help as she "solicits interest" from those willing to serve on an official committee in Washington Mutual's bankruptcy case.

An arm of the Department of Justice, the U.S. Trustee has the discretion to name official shareholder panels in bankruptcy cases if the agency believes there's a chance of recovery for equity holders.

Billions of dollars in cash and tax refunds were thrown up for grabs when regulators seized WaMu in September 2008 and sold it to J.P. Morgan Chase & Co. (JPM) for $1.9 billion.

To get anything, Washington Mutual shareholders would have to battle creditors of both the parent company and creditors of WaMu, who are out billions due to the deal.

Besides cash, however, Washington Mutual is examining assets such as lawsuits over the takeover and sale of WaMu, court documents say. If those suits pan out, it could mean billions more for creditors, and, possibly, shareholders.

The U.S. Trustee moved Wednesday to force the company to hand over a list of shareholders and rushed to get the matter before Judge Mary Walrath at a hearing Friday.

An attorney for the company said at Friday's hearing that Washington Mutual would likely be heard from on the issue if federal bankruptcy monitors do decide shareholders need an official voice in the bankruptcy court.

Appointment of an official panel is no guarantee shareholders will get anything out of the hard-fought Chapter 11 case. But it would mean they would have a seat at the bankruptcy bargaining table, with attorneys and financial advisers paid for by Washington Mutual Inc.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)

-By Peg Brickley, Dow Jones Daily Bankruptcy Review; 302-521-2266; [e-mail]

Copyright (c) 2009 Dow Jones & Company, Inc.

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