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WaMu emerges from bankruptcy

Bank exits Chapter 11 shortly after Lehman Bros.

Just two weeks after Lehman Bros. officially emerged from Chapter 11, another major victim of the 2008 financial crisis also has exited bankruptcy protection.

Seattle-based Washington Mutual Inc. (WaMu), the largest U.S. bank to fail during the recession, emerged from Chapter 11 yesterday. It collapsed in September 2008 after it lost tens of billions of dollars due to risky mortgages and home equity loans. The bank, which fell just 10 days after Lehman went bankrupt, had proposed seven reorganization plans over nearly three and a half years of court battles.

Under the final reorganization plan, which U.S. Bankruptcy Judge Mary Walrath in Delaware approved on Feb. 23, WaMu will begin repaying about $7 billion to creditors, many of whom are hedge fund investors. The reorganized company will be called WMI Holdings Corp. and will include a mortgage reinsurance business, WMI Mortgage Reinsurance Co.

Read Thomson Reuters for more about WaMu’s bankruptcy exit.

Ashley Post

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