After a long and contentious legal battle and more than three years in bankruptcy, Washington Mutual Inc. has won court approval of a reorganization plan, the Associated Press reports.
A Delaware judge who had twice rejected reorganization plans filed by Washington Mutual approved the company’s latest plan today.
As with its earlier proposals, Washington Mutual’s plan is based on WMI, JPMorgan Chase and the Federal Deposit Insurance Corp. settling lawsuits they filed against one another after the collapse of Seattle-based Washington Mutual Bank and the sale of its assets to JPMorgan Chase & Co. for $1.9 billion. It was the largest bank failure in U.S. history.
The plan calls for some $7 billion to be distributed to creditors and includes significant recoveries for shareholders, who often are left with nothing in bankruptcy cases.