Washington Mutual Inc. told a bankruptcy judge yesterday that a revised Chapter 11 plan for the bank holding company probably will be filed by the end of this month.
Feb. 25 may be the date to consider approving revised election forms and other documents to be given creditors, WaMu said. A confirmation hearing to approve the plan could take place on March 28, WaMu’s lawyer said.
The official shareholders’ committee filed papers this week seeking authority to investigate whether some noteholders traded in securities of the company based on non-public information. The committee referred to the judge’s Jan. 7 opinion denying WaMu’s plan.
The judge mentioned that allegations were made at the confirmation hearing that some creditors traded on confidential information. The allegations against four hedge funds are “unproven,” the committee said.
The committee said an investigation would relate to whether the noteholders should be given releases, whether their claims should be subordinated, and the interest rates that should be paid on their claims.
The noteholders own so-called PIERS securities and would become stockholders under WaMu’s plan. The bankruptcy judge found the plan defective in part because only the four noteholders could receive new stock for their claims. The plan unfairly discriminated against creditors holding less than $2 million of the PIERS securities, the judge said.
For Bloomberg coverage of yesterday’s hearing, click here. For details of the Jan. 7 opinion denying confirmation, click here for the Jan. 10 Bloomberg bankruptcy report.
Assuming WaMu can remedy defects, the plan would distribute $7.5 billion based on a global settlement that the judge said passed muster.
Click here to read the May 18 Bloomberg bankruptcy report for a summary of WaMu’s original plan. To read about the settlement before it was modified, click here for the May 24 Bloomberg bankruptcy report. For a summary of changes WaMu made to its plan in October, click here for the Oct. 7 Bloomberg bankruptcy report.
The WaMu holding company filed under Chapter 11 in September 2008, one day after the bank subsidiary was taken over. The bank, once the sixth-largest depository and credit- card issuer in the U.S., was the largest bank failure in the country’s history. The holding company filed formal lists of assets and debt showing property with a total value of $4.49 billion against liabilities of $7.83 billion.
The holding company Chapter 11 case is In re Washington Mutual Inc., 08-12229, U.S. Bankruptcy Court, District of Delaware (
www.bloomberg.com/news/2011-01-21/...uptcy.html?cmpid=msnmoney
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