WaMu reaches deal to end bankruptcy
REUTERS — 53 MINUTES AGO
WILMINGTON, Del., May 24 (Reuters) - Washington Mutual Inc (Symbol : WAMUQ
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) has reached a deal to end its bankruptcy after shareholders and some debtholders agreed to a settlement, the company's attorney told a bankruptcy court on Tuesday.
Under the plan, shareholders will have control of the reorganized company that exits bankruptcy, according to Brian Rosen, of Weil, Gotshal & Manges LLP, which represents Washington Mutual (Symbol : WAMUQ
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).
The reorganized company will be a reinsurance business with a value of $160 million, he said at a hearing in U.S. Bankruptcy Court in Wilmington, Delaware.
Washington Mutual (Symbol : WAMUQ
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) filed for bankruptcy in 2008 after regulators seized its WaMu savings and loan business in the biggest bank failure in U.S. history.
Rosen said a group of four hedge funds, known in the bankruptcy as the settlement noteholders, will provide a $100 million credit facility to the reorganized company so it can pursue acquisitions. The company is expected to have valuable tax breaks that could be used to offset future profits.
Rosen said Washington Mutual (Symbol : WAMUQ
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) will file a new bankruptcy plan in the next 10 days. He said he hoped the company would exit bankruptcy by the middle of August.
The case is In re Washington Mutual (Symbol : WAMUQ
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), U.S. Bankruptcy Court, District of Delaware, No. 08-12229. (Reporting by Tom Hals, editing by Matthew Lewis)
