The litigation had gotten ugly, but it came to an amicable end on Friday.Washington Mutual’s estate announced a global settlement agreement with JPMorgan and the FDIC, which will, a WaMu statement said, “provide substantial recoveries for the company’s creditors.”
“Substantial recoveries” means the return of $4 billion in deposits and nearly $2 billion in other cash, Zach Lowe of The Am Law Daily reported.
If the $4 billion number sounds familiar, it’s because that is the amount WaMu claimed was on deposit when the FDIC seized the bank in late 2008. The bank’s estate also claimed JPMorgan and the FDIC “conspired to lower WaMu’s sale price by leaking false information about WaMu’s finances to federal regulators and potential rival bidders,” Lowe summarized.
WaMu had demanded discovery from various third-part entities, including Sullivan & Cromwell, who served as M&A counsel for JPMorgan. Though, Lowe noted, the FDIC’s firm, DLA Piper, turned over documents, S&C refused and the judge eventually agreed the firm did not have to turn over its related documents.
Discovery aside, WaMu apparently had a convincing enough argument about the $4 billion in deposits to make it worth settling over.
As we noted before, there were powerhouse lawyers on all sides; Quinn Emanuel represented WaMu. Weil, not surprisingly, is serving as WaMu’s debtor counsel, and S&C continued its representation of JPMorgan.
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