Washington Mutual Notice of Waiver Filed, Plan Effective
Washington Mutual (WMI) filed with the U.S. Bankruptcy Court a notice of waiver of certain conditions precedent to the (A) Seventh Amended Joint Plan of Affiliated Debtors pursuant to Chapter 11 of the United States Bankruptcy Code, (B) global settlement agreement and (C) credit facility. The notice states, "...pursuant to Section 37.2 of the Plan, the Debtors, with the approval of the Creditors' Committee, the Equity Committee, the JPMC Entities, the FDIC Receiver, FDIC Corporate and AAOC, hereby waive the condition precedent set forth in Section 37.1(b) of Plan that the Confirmation Order become a Final Order prior to the occurrence of the Effective Date and the substantial consummation of the Plan." The Plan is now effective, and the Company has emerged from Chapter 11 protection. As a result, WMI will commence the distribution of funds of approximately $7 billion to parties-in-interest on account of their allowed claims and the distribution of substantially all of the stock in the reorganized company to equity holders. WMI has emerged as a newly-reorganized company, WMI Holdings Corp., which will consist primarily of WM Mortgage Reinsurance Company (WMMRC), a wholly-owned subsidiary of WMI that is incorporated in Hawaii and which will be funded by a $75 million contribution from certain WMI creditors. In addition, the Company will have access to a $125 million senior credit facility to be used for working capital and permitted acquisitions and originations in the financial services sector. Initially, the primary business of WMI Holdings will be a legacy reinsurance business that is currently operated in runoff mode by WMMRC. Michael Willingham, Diane Glossman, Mark Holliday, Gene Davis, Timothy Graham, Steve Scheiwe and Michael Renoff will comprise the board of directors of WMI Holdings. The Court confirmed WMI's Plan on February 24, 2012. This savings and loan holding company filed for Chapter 11 protection on September 26, 2008, listing $328 billion in pre-petition assets. Washington Mutual's bankruptcy is the second-largest all time filing, second only to Lehman Brothers Holdings.
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