Thursday, November 21, 2013 10:38:06 AM
J.P. Morgan Won’t Back Down From FDIC Fight
http://blogs.wsj.com/moneybeat/2013/11/20/j-p-morgan-wont-back-down-from-fdic-fight/?mod=yahoo_hs
In its $13 billion settlement with the Department of Justice, J.P. Morgan was willing to take financial responsibility for mortgages underwritten by Washington MutualWMIH -0.88% before J.P. Morgan’s 2008 acquisition of the failed bank.
But CEO Jamie Dimon hasn’t given up the fight over who should cover these costs going forward.
On a conference call Tuesday evening, Dimon said that in future litigation, the bank plans to tangle with the Federal Deposit Insurance Corp. over roughly $2.7 billion the regulator is holding in receivership for Washington Mutual creditors.
The question of who bears responsibility for Washington Mutual’s legal liabilities was a major snag during the settlement talks with the DoJ. J.P. Morgan had previously said the FDIC receivership should absorb any claims, but ultimately backed down against the DoJ.
The majority of the $2.7 billion held by the receivership — $1.888 billion – is what J.P. Morgan paid to buy the banking operations of WaMu in 2008 after it was seized by the FDIC. The rest is a hodge podge of assets that J.P. Morgan didn’t purchase when it bought the bank.
J.P. Morgan wants to pursue those funds to pay any portion of future settlements stemming from WaMu lawsuits.
Dimon noted on the conference call that most of Washington Mutual’s creditors are hedge funds. In court documents from 2012, Anchorage Capital, Marathon, and Silver Point were cited as bondholders battling J.P. Morgan for control over the $2.7 billion in the FDIC receivership. A source close to the creditor’s committee said many of those hedge funds have sold their positions, but declined to comment on the current slate of bondholders.
As our colleagues Dan Fitzpatrick and Ryan Tracy noted in an October 31, 2013 article, there were unprecedented ambiguities in the wording over who was responsible for WaMu’s past sins when J.P. Morgan agreed to purchase the banking assets.
For J.P. Morgan any chance to reclaim funds from the receivership would at least provide some cushion on its outstanding legal liabilities. The $13 billion DOJ settlement cut down the remaining legal liabilities but some big ticket items remain, including a $10 billion lawsuit that Deutsche BankDBK.XE -0.28% has brought against J.P. Morgan. Deutsche Bank as trustee is seeking funds to pay back its investor clients who lost money on troubled mortgages sold by Washington Mutual .
Dimon said the bank is willing to keep up the fight for the long haul. “We’re very patient. If it takes five years, we’re fine with that.”
Recent COOP News
- Mr. Cooper Group Announces Senior Leadership Updates to Drive Digital-First Strategy and AI-Powered Home Loan Experience • Business Wire • 10/09/2024 01:00:00 PM
- Mr. Cooper Group Inc. to Discuss Third Quarter 2024 Financial Results on October 23, 2024 • Business Wire • 10/08/2024 09:10:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 10/02/2024 08:04:29 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 10/01/2024 08:32:21 PM
- ZenaTech, Inc. (NASDAQ: ZENA) To Commence Trading Today • InvestorsHub NewsWire • 10/01/2024 11:00:00 AM
- Mr. Cooper Group Inc. to Present at the Barclays Global Financial Services Conference • Business Wire • 09/03/2024 09:00:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/30/2024 08:17:46 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/01/2024 08:31:53 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 07/30/2024 08:09:25 PM
- Mr. Cooper Group Inc. Announces Pricing of Offering of $750 Million of Senior Notes • Business Wire • 07/29/2024 08:30:00 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 07/29/2024 08:24:31 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 07/26/2024 08:20:36 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/25/2024 11:00:12 AM
- FLAGSTAR BANK, N.A. ANNOUNCES SALE OF ITS MORTGAGE SERVICING BUSINESS • PR Newswire (US) • 07/25/2024 11:00:00 AM
- Mr. Cooper Group Reports Second Quarter 2024 Results and Announces Acquisition of Mortgage Operations From Flagstar • Business Wire • 07/25/2024 11:00:00 AM
- Mr. Cooper Group Inc. to Discuss Second Quarter 2024 Financial Results on July 25, 2024 • Business Wire • 07/11/2024 08:00:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/30/2024 08:07:34 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/24/2024 08:36:48 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:33:25 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:28:46 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:26:19 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:24:11 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:22:07 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:19:44 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/24/2024 08:17:44 PM
ZenaTech, Inc. (NASDAQ: ZENA) Launchs IQ Nano Drone for Commercial Indoor Use • HALO • Oct 10, 2024 8:09 AM
CBD Life Sciences Inc. (CBDL) Targets Alibaba as the Next Retail Giant for Wholesale Expansion of Top-Selling CBD Products • CBDL • Oct 10, 2024 8:00 AM
Foremost Lithium Announces Option Agreement with Denison on 10 Uranium Projects Spanning over 330,000 Acres in the Athabasca Basin, Saskatchewan • FAT • Oct 10, 2024 5:51 AM
Element79 Gold Corp. Reports Significant Progress in Community Relations and Development Efforts in Chachas, Peru • ELEM • Oct 9, 2024 10:30 AM
Unitronix Corp Launches Share Buyback Initiative • UTRX • Oct 9, 2024 9:10 AM
BASANITE INDUSTRIES, LLC RECEIVES U.S. PATENT FOR ITS BASAFLEX™ BASALT FIBER COMPOSITE REBAR AND METHOD OF MANUFACTURING • BASA • Oct 9, 2024 7:30 AM