Washington Mutual Inc. (WaMu) has been floundering in the waters of Chapter 11 bankruptcy ever since it went under in September 2008 (the largest bank in U.S. history to ever fail). But WaMu may have finally gotten hold of the proverbial life raft, Thomson Reuters reports, as it says it has reached a settlement in the dispute between its shareholders and creditors.
"The proposed settlement agreement represents a positive step toward completing the Chapter 11 process," WaMu said.
A court filing on Monday stated that the shareholders, represented by an equity committee, would drop their legal claims against settlement noteholders. Under this settlement, WaMu will be able to distribute $7 billion to creditors. Its reorganized assets will include equity interests in WMI Investment Corp. and WM Mortgage Reinsurance Co. Inc.
The reorganized WaMu will be funded by $75 million from creditors, with a credit line of $125 million, which will hopefully help it come out stronger from its bankruptcy proceedings.