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Washington Mutual Holding Co. sues FDIC

21 March, 2009

from Reuters Washington Mutual sues FDIC for over $13 billion

Washington Mutual Holding Company has filed a lawsuit against the Federal Deposit Insurance Company in which it claims that WaMu’s rights were violated when the FDIC seized the banks in September of 2008 and then sold it to JP Morgan for $1.9 billion.
According to WaMu, a properly handled liquidation of its assets would have raised far more money.

In its complaint, Washington Mutual seeks to recover as much as $6.5 billion of capital contributions it said it made to its banking unit from December 2007 through the seizure.

Washington Mutual also seeks the return of $4 billion of trust preferred securities it said were wrongfully transferred to the banking unit, and said it may be entitled to as much as $3 billion of tax refunds. It also seeks damages of $177.1 million related to unpaid loans made to the banking unit.

The company also made claims on several other matters that together could add to any recovery. Washington Mutual is seeking a jury trial.

Neither the FDIC nor JP Morgan has responded publicly to the lawsuit.

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