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Washington Mutual investor pushes for auction of undervalued company
By Lisa Kerner
Charlotte, N.C., March 15 - Washington Mutual, Inc. investor Farokh Lam asked the court to order an auction of the reorganized company under its current modified sixth amended plan of reorganization, according to a March 15 filing with the U.S. Bankruptcy Court for the District of Delaware.
Lam is a holder of Washington Mutual trust preferred securities and Washington Mutual preferred securities.
According to Lam, while the company is valued at the high end of $185 million by the Blackstone analysis, using the internet "it should be easy to solicit, within a matter of weeks, qualified bids for the stock" in the reorganized company that value it closer to $200 million.
On Feb. 8, Washington Mutual filed a modified sixth amended plan of reorganization and related supplemental disclosure statement to make changes outlined in a court order denying confirmation of the company's previous plan.
As previously reported, the court denied confirmation on Jan. 7 but suggested modifications to the plan that would allow it to be confirmed.
The court also ruled that the global settlement between the company, the Federal Deposit Insurance Corp. and JPMorgan Chase Bank, NA is fair, reasonable and within Washington Mutual's best interests. The modified plan is based on that settlement.
According to a company news release, the settlement has also been revised to conform to the modified plan and has been extended through April 30.
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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