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.

WILMINGTON, Del. — Bank holding company Washington Mutual Inc. is asking a Delaware judge to approve its revised reorganization plan.

The judge convened a three-day hearing today to consider the plan, which centers on the settlement of lawsuits pitting Washington Mutual, the Federal Deposit Insurance Corp. and JPMorgan against one another, the Associated Press reported.

The lawsuits were filed after the FDIC seized WaMu’s flagship bank in 2008 and sold its assets to JPMorgan in the largest bank failure in U.S. history.

The judge ruled in January that the proposed settlement was reasonable but refused to confirm WaMu’s plan until changes were made.

Washington Mutual shareholders oppose the new plan, saying it favors hedge funds who dominated negotiations with JPMorgan for their own gain and used inside information from the bankruptcy to trade in Washington Mutual securities.