WMI Liquidating Trust $37 million directors and officers deal approved

By Caroline Salls

Pittsburgh, Dec. 23 – WMI Liquidating Trust received court approval of a $37 million settlement with several director and officer claimants and insurers, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The director and officer claimants filed claims in Washington Mutual, Inc.’s bankruptcy case for advancement of defense and other litigation costs and damages tied to investigations and lawsuits, as well as for employment-related benefits.

Washington Mutual’s official committee of unsecured creditors subsequently said the claimants “engaged in wrongful acts that injured the debtors, the debtors’ estates and the creditors.” The committee said this conduct resulted in a “wasteful transfer” of $500 million to WMB from Washington Mutual.

A dispute also ensued with the insurers over directors and officers insurance coverage for the claims in question.

Under the settlement, the insurers will pay $37 million to WMI Liquidating Trust.

Also, 12 non-indemnity outside director claims will be allowed in amounts ranging from $13,936 to $300,518. Kerry K. Killinger will either receive $7.28 million in cash for his non-indemnity claim or have a $7 million allowed claim, at his election.

Washington Mutual, a Seattle-based savings and loan holding company, emerged from bankruptcy on March 19, 2012.

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