Battle Brewing over Fire Sale of WaMu Banking AssetsBoth sides are suing the FDIC, with WaMu's holding company "seeking to recover billions of dollars in tax refunds, capital contributions, and trust securities," while JPM looks to ""protect its economic interests in the assets."
In one sense, at least, Lehman Brothers's precipitous Chapter 11 filing was a blessing in (very heavy) disguise: The investment bank was involved in the sale of its assets in the days and weeks after it entered bankruptcy. Washington Mutual wasn't as fortunate. Seized by the Federal Deposit Insurance Corp. on September 25 last year, the bank had no control over the disposition of its core banking assets, which were quickly sold to JPMorgan Chase & Co. for $1.9 billion.
Now that hasty sale has become the subject of what promises to be protracted litigation. At its core is a question: What, exactly, did JP Morgan buy on that fall day?
Now, imagine those spats cubed in the wind-down of a global bank with assets and counterparties on every continent. The FT's John Gapper offers a preview.