JPMorgan (NYSE:JPM) and FDIC Settle with WaMu for $6 Billion
[Update] – As several commenters have pointed out, the proposal is pending legal approval from the court, which is uncertain.
The legal battle between JPMorgan (NYSE:JPM) and FDIC against the estate of WaMu had gotten down and dirty during the litigation, but that has come to an end now as they all kissed and made up, with the Washington Mutual estate getting $6 billion in the settlement agreed to.
How the $6 billion settlement breaks down is $4 billion in deposits will be returned to the estate, along with $2 billion in cash.
The $4 billion was determined by the claims by Washington Mutual that they had $4 billion in deposits when the FDIC tok over the company.
Other claims against the FDIC and JPMorgan in the lawsuit included the especially damning possibility that the two “conspired to lower WaMu’s sale price by leaking false information about WaMu’s finances to federal regulators and potential rival bidders.”
Most of the case was centered around the alleged releasing of “false information,” and even though the judge blocked a lot of important discovery, this didn’t hinder the settlement because the longer it was in the news the bigger hit JPMorgan and the FDIC were taking as a result.
This had the makings of a real fiasco for the FDIC and JPMorgan, and so it’s no surprise the settlement happened and a significant amount of money was returned to the WaMu estate to pay off many of its creditors.
Even without discovery being allowed in most cases, the overwhelming evidence was enough for the settlement to be the better decision than to allow the battle to be dragged through the media any longer.
This story was originally published by American Banking News (http://www.americanbankingnews.com) and is the sole property of American Banking News. If you are reading this article on another website, that means this article was illegally copied and re-published to this website in violation of U.S. and International copyright law. You can view the original version of this story at http://www.americanbankingnews.com/2010/03/15/jpmorgan-nysejpm-and-fdic-settle-with-wamu-for-6-billion/
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