JPMorgan and WaMu closer to settling deposit dispute, attorney claims

8 March 2010

JPMorgan, Washington Mutual (WaMu) and an industry regulator may strike a deal over the ownership of a $4 billion bank deposit during the coming days, an attorney has claimed.

WaMu was declared bankrupt in September 2008 and was sold by Federal Deposit Insurance Corp to JPMorgan for $1.9 billion.

The funds were seized as part of the transaction and now all three parties are disputing which one has the ownership rights.

Brian Rosen, a partner at law firm Weil, Gotshal & Manges LLP in New York, who represents WaMu, said that “there seems to be some momentum” to the talks.

However, his request for a one week delay in proceedings to allow the three parties more time to discuss the funds has been granted by a Delaware judge.

WaMu claimed that the funds should be used to repay creditors while JPMorgan believes it owns the assets after acquiring the failed
institution.

The Wall Street Journal reported that WaMu and JPMorgan are also discussing ownership of $5.6 billion worth of tax refunds and a pension fund.

By Jim Ottewill

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