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Washington Mutual Bank noteholders, investors’ first mediation fails
By Caroline Salls
Pittsburgh, March 2 – An informal steering committee of Washington Mutual Bank senior noteholders and holders of residential mortgage-backed securities sponsored by the bank did not execute a proposed $2.28 billion memorandum of understanding or reach a settlement in mediation that took place between July and October 2015, according to a news release.
The steering committee said its proposal to the institutional investors included an allowed unsecured claim against the Washington Mutual Bank receivership in the amount of $2.28 billion on behalf of trusts for which Deutsche Bank National Trust Co. serves as trustee.
The proposal also included provisions regarding the possible reduction of Deutsche Bank’s claims against the receivership in the event of a successful appeal in specified bank litigation, the payment of counsel fees and various procedural details.
The committee said the proposal was expected to be reflected in an executed memorandum of understanding, which would then be fully documented in settlement agreements that would include Deutsche Bank and the Federal Deposit Insurance Corp.
Specifically, an agreement between the parties to the first mediation was meant to be a step toward a global settlement of the claims asserted by Deutsche Bank on behalf of some Washington Mutual Bank trusts, as well as of the indemnity claims filed against the receivership by JPMorgan Chase Bank NA.
The committee said it understands that a mediation among the named parties to the litigation began in December, but no information has been shared with committee members.
Washington Mutual, a Seattle-based savings and loan holding company, emerged from bankruptcy on March 19, 2012.
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