Washington Mutual asks court to disband official equity committee

By Caroline Salls

Pittsburgh, Jan. 12 - Washington Mutual, Inc. has asked the U.S. Bankruptcy Court for the District of Delaware to either disband the official committee of equity security holders appointed by the U.S. Trustee or limit the fees and expenses that can be incurred by the committee to $250,000, according to a Monday court filing.

The equity committee was appointed on Monday.

Washington Mutual said it has been providing the U.S. Trustee with its financial information for more than a year.

"Based upon such reportings, the debtors are baffled as to why the U.S. Trustee, at this late date, would choose to saddle these estates with another committee and, presumably, professionals that will needlessly incur significant fees and expenses," the company said in the motion.

In addition, the company said it is insolvent, and equity holders "are unlikely to receive any recovery, and, therefore, have little, if any, economic interest in these Chapter 11 cases."

Washington Mutual said appointment of the equity committee will also interrupt the administration of its estates to the detriment of parties with an actual economic interest.

"Not only will time be lost while the equity committee's sure-to-be-retained professionals get up to speed, but the sudden addition of another official committee to the complex litigations and negotiations that have been ongoing could imperil the debtors' efforts to reach a global resolution with all parties and timely make distributions to creditors," the company said.

The company also said no one has tried to stop any equity holder from participating in the Chapter 11 cases.

A hearing is scheduled for Jan. 28.

Washington Mutual, a Seattle-based savings and loan holding company, filed for Chapter 11 bankruptcy on Sept. 26, 2008. Its Chapter 11 case number is 08-12229.

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