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WaMu asks court to vacate parts of equity claims order amid settlement
By Caroline Salls
Pittsburgh, Jan. 9 - Washington Mutual, Inc. is asking the U.S. Bankruptcy Court for the District of Delaware to eliminate parts of a September order related to the equity committee's standing to prosecute equitable disallowance claims and related to a ruling that the equity committee lacks standing to prosecute claims for equitable subordination, according to a Monday court filing.
The company said it is required to ask the court to vacate these portions of the order as a condition of the mediated settlement included in its seventh amended plan of reorganization.
Specifically, Washington Mutual said it wants the court to rule that, if confirmation of the seventh amended plan is appropriate, it would vacate part of the September order in aid of the settlement, as well as to vacate the standing motion ruling portions as part of an order confirming the seventh amended plan.
According to the motion, the mediated settlement resolves the causes of action asserted in the equity committee's standing motion.
The company said the collapse of the seventh amended plan could result in termination of its global settlement agreement, which would result in the loss of billions of dollars of recoveries in exchange for litigation it said the court has already said would be challenging.
"Without the requested vacatur, the settlement would fail and the consideration being distributed to holders of equity interests under the seventh amended plan would be unavailable," Washington Mutual said in the motion.
A hearing is scheduled for Jan. 25.
Washington Mutual, a Seattle-based savings and loan holding company, filed for bankruptcy on Sept. 26, 2008. Its Chapter 11 case number is 08-12229.
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