Washington Mutual preferred shareholder suggests company plan changes

By Caroline Salls

Pittsburgh, Dec. 1 - Washington Mutual, Inc. preferred shareholder Roman Gelsi filed a competing plan of reorganization Tuesday, just two days before the confirmation hearing for the company's plan, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

"With these minor changes to the plan, preferred shareholders will receive a modest recovery," Gelsi said in his filing.

Under Gelsi's plan:

• The company's first tax return will be split 50/50 between JPMorgan and Washington Mutual;

• The second tax return will still be split between the Federal Deposit Insurance Corp., Washington Mutual and its bondholders;

• Visa shares and wind farms will be given fair value for Washington Mutual;

• Full disputed deposits will be returned to Washington Mutual, minus JPMorgan's 50% of tax refunds;

• Interest rates to bondholders will be paid at the Federal judgment rate;

• All releases will be granted to all parties; and

• All other parts of the plan will remain the same.

The company's plan confirmation hearing is scheduled to begin on Dec. 2.

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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