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A Win for WaMu Shareholders?
By Dan Freed 12/17/09 - 01:11 PM EST Loading Comments... Add Comment Stock quotes in this article: JPM , WAMUQ.PK , GS , MCO , WFC
NEW YORK (TheStreet) -- A U.S. bankruptcy court judge has asked Washington Mutual(WAMUQ.PK Quote) to provide a list of equity holders with an eye to allowing them to form a committee in the case involving the failed Seattle thrift, according to a research note published Thursday.
The news appears to have sparked a big rally in shares of Washington Mutual, which were up nearly 40% to 16 cents on volume of 33 million around midday.
The total was higher than any full day since Sept. 25. Other highly speculative stocks which rallied over the summer, such as Fannie Mae and Freddie Mac, have also recently seen a resurgence of trading activity.
Since Washington Mutual went bankrupt last year and the Federal Deposit Insurance Corp. sold its assets to JPMorgan Chase(JPM Quote), JPMorgan's attorneys have been hard at work in at least two major cases.
In the bankruptcy case, Washington Mutual and JPMorgan are battling over $4 billion in deposits and billions in other assets to which both parties have laid claim. In a separate lawsuit, JPMorgan is defending itself against accusations the bank "engaged in sham negotiations," among other tactics "to gain an unfair advantage in obtaining [Washington Mutual] assets at a 'fire sale' price."
The cases came together earlier this week when Washington Mutual attorneys requested the judge allow them to take testimony from a wide range of high profile parties to learn more about the circumstances surrounding the deal.
Those parties include all the major U.S. regulators, as well as executive at Wells Fargo(WFC Quote), Goldman Sachs(GS Quote), and Moody's Corp.(MCO Quote) and Standard & Poor's, among others
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