As a broad strokes overview:
(Before I start, anyone that wants to elaborate or correct me, feel free. I am doing this off the top of my head and will likely need correction or at least clarification.)
VERY BROAD STROKES
The underwriters were considered a creditor to WMI once the bankruptcy occurred.
They were compensated for their involvement with WMI with stakes in the same trance (or class) as preferred stock holders.
There was a technicality in that the judge never actually approved part of the compensation as the underwriters were given extra time to decide if they would take their deal. 'Our' lawyer cut a deal with them after POR7 had been approved and apparently the paperwork never crossed the judge's desk.
Late in the BK, a lawyer filed a motion that they this was inappropriate and since the judge never signed off on it, was invalid. In that motion or a later motion (I think it was later), the same lawyer tried to get their claim moved to the same tranche (class) as commons.
The judge refused to do this for several reason. One was that it was too late to file such a motion (the term 'latches' has this connotation). The other was that the judge would have signed off on it anyway so 'no harm, no foul'.
That is it in a nutshell. Hopefully, by writing this, others will confrontationally correct me and you will get a better picture of the details.
Enjoy the show! LOL
News 
Market Data 
Discover 
