WaMu’s Former Parent Company Sues FDIC

Washington Mutual Inc. has sued the Federal Deposit Insurance Corp. (FDIC), which brokered the sale of the failed savings and loan to JP Morgan & Chase in September.

Reuters reports
that WaMu's former parent company is suing the FDIC more than $13 billion, arguing that the regulator made a ‘cryptic disallowance’ of its claims in January. WaMu also says the $1.9 billion sale to JPMorgan was unreasonably low.

WaMu's parent company, which Reuters notes filed for Chapter 11 bankruptcy the day after the JPMorgan deal, filed the lawsuit with the U.S. District Court for the District of Columbia.

The FDIC rejected the parent company's claims in January that it was entitled to funds stemming from tax refunds, trust preferred securities and unpaid loans, among other items, because WaMu's claims "lacked documentation or specificity, failed to state grounds to recover, appeared to be made against third parties, or had no legal basis," Reuters says.

SOURCE: Reuters


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