Mr Cooper Group Inc fka COOP

[Yanik]

UPDATE 3-Court revives WaMu bondholder suit vs JPMorgan
Fri Jun 24, 2011 3:30pm EDT

* Several insurers objected to JPMorgan sweetheart deal

* DC Circuit says lower court erred in dismissing case

* JPMorgan, FDIC decline to comment (Adds comment from lawyer for insurers, updated stock price)

By Jonathan Stempel

NEW YORK, June 24 (Reuters) - A U.S. appeals court revived a lawsuit by bondholders of the failed Washington Mutual Bank who accused JPMorgan Chase & Co (JPM.N) of causing them losses when it bought the thrift's assets at a "fire sale" price.

Friday's ruling by the D.C. Circuit Court of Appeals lets five insurers renew claims accusing JPMorgan of having pressured the U.S. Federal Deposit Insurance Corp to force a $1.9 billion sale of what was once the largest U.S. savings and loan.

These insurers said the terms "drastically undervalued" the banking unit of Washington Mutual Inc (WAMUQ.PK) and let JPMorgan cherry-pick its best assets at their expense, causing their bond investments to become worthless.

Writing for a three-judge appeals court panel, Chief Judge David Sentelle reversed the April 2010 dismissal of the case by a federal district judge, who concluded the bondholders should have pursued all administrative remedies before suing.

The panel returned the case to the lower court for further proceedings. The FDIC agreed with JPMorgan, the nation's second-largest bank, that the case was properly dismissed.
http://www.reuters.com/article/2011/06/24/washingtonmutual-idUSN1E75N0N720110624?feedType=RSS&feedName=governmentFilingsNews&rpc=43