The judge overseeing Washington Mutual Inc.’s bankruptcy agreed to consider sending the bank- holding company’s plan to liquidate most of its remaining assets out to creditors for a vote.
U.S. Bankruptcy Judge Mary F. Walrath denied a request by shareholders to put off a hearing on the so-called disclosure statement describing the liquidation plan. The investors asked Walrath to delay a vote until a court-appointed examiner issues a report on the failure of Washington Mutual’s former bank, the biggest bank failure in the U.S.
Should Walrath approve the disclosure statement at the end of today’s hearing, creditors would be able to vote on the plan until Nov. 15, two weeks after the examiner’s report is made public Nov. 1, company attorney Brian Rosen said in court.
The liquidation plan would divide $7 billion among creditors and is based on a settlement among Washington Mutual, known as WaMu, JPMorgan Chase & Co., which bought the failed bank, and the Federal Deposit Insurance Corp., which is overseeing the distribution of bank assets to bank creditors in a separate legal proceeding.
That settlement has the support of all the creditors who have any realistic chance of getting part of their debts repaid, noteholder lawyer Tom Lauria told Walrath.
“The report is not going to change how everyone is going to vote,” Lauria said.
The case is In re Washington Mutual Inc., 08-12229, U.S. Bankruptcy Court, District of Delaware (Wilmington).