Bankrupt WaMu reaches final deal with FDIC, JPMorgan
SEATTLE - The final chapter in the saga of once-mighty Washington Mutual may have been written at long last.
Washington Mutual Inc. announced Friday it has reached a "global settlement agreement" that it believes will provide reimbursements for its creditors and maximize the value of its bankruptcy estate.
The agreement was reached with JPMorgan and the Federal Deposit Insurance Corp., according to a WaMu statement released Friday.
The government agency had seized Washington Mutual's flagship bank in 2008 and sold its assets to JPMorgan for $1.9 billion. But the two banking companies and the FDIC have traded lawsuits over roughly $4 billion in disputed deposit accounts.
A WaMu attorney told a judge Friday that JPMorgan has agreed to turn over the money to Washington Mutual after deducting $172 million in tax refunds that WaMu has already received.
In return, JPMorgan and the FDIC will get will get a major share of future tax refunds valued at about $5.6 billion.
Reuters reported that WaMu, which is in bankruptcy, will split an expected tax refund of $3 billion with JPMorgan and an expected tax refund of $2.6 billion with the FDIC.
WaMu will get 30 percent of the first refund and about 40 percent of the second.
Shares of WaMu stock dropped from 45 cents to 9 cents on the news, then rebounded as the price continued to fluctuate.
Washington Mutual Inc. announced Friday it has reached a "global settlement agreement" that it believes will provide reimbursements for its creditors and maximize the value of its bankruptcy estate.
The agreement was reached with JPMorgan and the Federal Deposit Insurance Corp., according to a WaMu statement released Friday.
The government agency had seized Washington Mutual's flagship bank in 2008 and sold its assets to JPMorgan for $1.9 billion. But the two banking companies and the FDIC have traded lawsuits over roughly $4 billion in disputed deposit accounts.
A WaMu attorney told a judge Friday that JPMorgan has agreed to turn over the money to Washington Mutual after deducting $172 million in tax refunds that WaMu has already received.
In return, JPMorgan and the FDIC will get will get a major share of future tax refunds valued at about $5.6 billion.
Reuters reported that WaMu, which is in bankruptcy, will split an expected tax refund of $3 billion with JPMorgan and an expected tax refund of $2.6 billion with the FDIC.
WaMu will get 30 percent of the first refund and about 40 percent of the second.
Shares of WaMu stock dropped from 45 cents to 9 cents on the news, then rebounded as the price continued to fluctuate.