August 10, 2010, 6:33 PM EDT
http://www.businessweek.com/news/2010-08-10/wamu-examiner-wins-approval-on-scope-of-investigation.html
Aug. 10 (Bloomberg) -- The examiner for Washington Mutual Inc., the former holding company of the biggest U.S. bank to fail, won court approval for the scope of the investigation into its bankruptcy that had been sought by shareholders.
Joshua R. Hochberg, a partner at McKenna Long & Aldridge LLP, and the rest of his team have already contacted the parties that will be part of the probe and begun their investigation, Henry Sewell, an attorney for Hochberg, told U.S. Bankruptcy Judge Mary Walrath at a hearing today in Wilmington, Delaware.
Hochberg filed an Aug. 6 outline saying he will examine WaMu’s proposed settlement with JPMorgan Chase & Co. and the Federal Deposit Insurance Corp., the basis for its plan to distribute more than $6 billion to creditors.
He will also look into the merits of lawsuits that resulted from the bank’s collapse -- and the potential for others -- as well as disputed ownership of assets such as about $6 billion of tax refunds and deposits of about $4 billion.
“I think the work plan was very informative,” Walrath said of the outline.
WaMu agreed not to sue JPMorgan and the FDIC as part of a settlement. Shareholders claim that lawsuit could be worth $30 billion, a figure disputed by the FDIC, WaMu and its creditors. They would get nothing under a proposed liquidation of most of the company’s remaining assets.
There will be a team of about 18 people working on the investigation, Sewell said in court. Hochberg said in his summary that he believes it could cost more than $4 million to complete his work over the next two months. He will file a preliminary report by Sept. 7 and his final report by Oct. 8, according to the schedule in the summary.
The case is In Re Washington Mutual Inc., 08-12229, U.S. Bankruptcy Court, District of Delaware (Wilmington).
--Editors: Fred Strasser, Peter Blumberg
To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at [email protected].