"A number of political insiders say they've grown weary of Mr. Dimon's protestations, viewing him as just another elite New York banker out to protect his turf. Some note that the bank profited handsomely during the financial crisis, when it scooped up securities firm Bear Stearns Cos. Inc. and Washington Mutual Inc.'s failed banking operations at bargain prices. "
"In April 2009, Ohio Democrat Rep. Marcy Kaptur confronted Mr. Dimon at dinner at a Washington hotel with other lawmakers. "I have just come from my district and our Realtors told us this morning your company was absolutely the worst to deal with in terms of the foreclosure crisis," Ms. Kaptur recalls saying to the CEO. "He looked at me, straight in the eye, and said, 'That can't possibly be true.' "
Thanks for posting the article below.
It looks like the judge has allowed WMB bondholders to pursue claims against WMI Inc. if FDIC does not do that for them.
Isn't this bad news for the equity? Bacause anything goes to WMB bondholders as part of a new settlement will come from equity's share (this is actually Mordicai's comment from one of his posts yesterday)?
I do not understanf why the stock is moving up?
WMB bondholders has, I think, about $13B of claims.
WaMu Bond Claims Clear First Hurdle In Parent Bankruptcy
| 07 April 2010
A bankruptcy judge on Tuesday refused to throw out claims that bondholders of Washington Mutual Bank, or WaMu, filed in the Chapter 11 case of its former parent, Washington Mutual Inc.
Judge Mary F. Walrath said creditors of the failed thrift, which was seized and sold in September 2008, can move to phase two of a multi-billion-dollar legal fight, and attempt to prove allegations the parent company is to blame for WaMu's failure.
The finger-pointing is not just a matter of legal theory. Washington Mutual, the former parent, is positioned to amass up to $7 billion in cash in its Chapter 11 case, including tax refunds and funds on deposit.
WaMu, in contrast, left behind only about $1.9 billion in a receivership - the cash J.P. Morgan Chase & Co. paid for the thrift.
Walrath's ruling gives WaMu bondholders a shot at collecting some of the Washington Mutual cash.
It also cut the ground out from under what's left of a tentative settlement between WaMu's former parent, Washington Mutual, its new owner, J.P. Morgan Chase & Co. and the Federal Deposit Insurance Corp.
Announced in late March, the pact that would end disputes over what went wrong at WaMu is still up in the air, with the FDIC refusing to sign off.
The former parent company attempted to hold WaMu bondholders at bay with arguments that only the FDIC, as receiver for WaMu creditors, has the right to demand payment on their behalf from the parent company.
Walrath said Tuesday that WaMu bondholders may pursue certain claims against Washington Mutual if the FDIC declines to do so. Her decision gives WaMu's bondholders leverage in the bargaining.
Alleged grounds for WaMu's claims against Washington Mutual include securities fraud, misrepresentation, mismanagement and fraudulent transfer of billions from WaMu as it teetered on the brink of collapse.
Tuesday's ruling is a victory for an assortment of institutional investors who say they thought they were backing a sound, regulated Seattle thrift, only to find themselves with distressed debt.
WaMu bondholder attorney Philip Anker said the decision should drive "a settlement, a settlement that is productive for everyone."
The attorney, who's with Wilmer Cutler Pickering Hale & Dorr, said his largest client paid 100 cents on the dollar for WaMu bonds.
That's in sharp contrast to many parent company bondholders, who, he claimed bought Washington Mutual debt in September 2008, paying less than 1 cent on the dollar.
Parent company debt has been trading above 100 cents on the dollar, driven by hopes of a deal that will send most of the billions left in the wreckage of WaMu into the pockets of those who bet on the parent company.
(c) 2010 Dow Jones & Company, Inc. https://www.fis.dowjones.com/...plication=&r=wsjblog&s=djfdbr
Posted by: fsshon Date: Wednesday, April 07, 2010 11:06:32 AM
In reply to: David West who wrote msg# 185781 Post # of 185834
Lawrence "this war is what we need and want" the idea that such a travesty on the investing world and the citizens whose funds and pensions were depleted overnight, by the acts of a colluding (gov agency) and a "big Wall Street" bank that is used to getting what it wants at all costs, leaving nothing but skeletons and bones for the cleanup crew is appalling and is should be drug out of the depths of the cave (which it lies in) and brought to the surface for all to see. If it takes a claim litigated by the bondholders to do this, then I welcome it.
The evidence is overwhelming in this case and the lack of ability of Weil to work on bringing it up, to force the parties to work together with checkbooks open, is not why the lawyers were employed. I want Quinn to be unleashed and let him get back to work. The abilities of that firm should never be forgotten or discounted, if we get this case moving forward again. It's like Rosen stalled the car 9 ran out of gas) and someone needs to make him open the tank lid (from inside the car) so we can pour in some gas and get this thing going again. I mean he is the driver. THJMW is giving the car a push !!
EC hiring heavyweight ex-Weil attorney is what was needed.
UST should prosecute this case to the fullest extent of the law. If our system of justice and banking are to survive, the dirty laundry must be aired or the confidence will stay down in that cave for ages. Rosen is a puppet and needs to be removed by the new EC once the new valuation puts A>L. THJMW is moving the parties along the best she can, as some have said "giving them just enough rope to hang themselves with!"
Remember we are dealing with a "cheap scape" Greek and a powerful woman who will not ever admit she did anything wrong or was pushed into her decision by said Greek! They screwed up, by not settleing to good terms for all and keeping this court hearing from happening.
I was told "they never should have let it go this far, because bondholders finance banks and the banks are trying to screw them out of money they aRE LEGALLY LIABLE for." It is not enough for JPM to have made over 40 Bil off WAMU assets, they illegally received.
I want THJMW to unwind the entire deal and start over or WMI gets everything back. Should take about 6 months to funnel most assets back to the bank "hold co".