Monday, May 23, 2011
Washington Mutual Emerges from Bankruptcy with a Proposal for Shareholders
On September 26, 2008, Washington Mutual filed for bankruptcy after being sold to JP Morgan Chase and Co. for $1.9 billion. Nearly three years after this event was deemed the biggest bank failure in U.S. history, Washington Mutual is finally on its way to recovery.
On Friday, May 20, Washington Mutual discussed a plan to give shareholders control of the company once it fully recovers from bankruptcy. In return, shareholders must agree to drop allegations that WaMu's hedge funds were using confidential information during trading.
This new proposal smoothes the feathers of disgruntled shareholders who were upset with a former proposal that paid off creditors but left little for them. In addition to giving shareholders control, the proposal sets aside $25 million that can be used for lawsuits on the shareholders' behalf.
Currently the proposal still needs many details worked out, and has a possibility of falling through. A hearing scheduled for June 29 will decide the proposal's fate. In the meantime, Washington Mutual looks forward to ridding itself of its bankruptcy status, and its shares have risen almost 90 percent in value.
If your company is facing bankruptcy or to learn more about bankruptcy, contact an experienced bankruptcy lawyer near you.