Washington Mutual Bankruptcy Settlement Suit Continues (NYSE: JPM)

A bankruptcy examiner won a federal judge’s approval to take more time to investigating the bank failure of Washington Mutual, which was purchased by JPMorgan Chase & Co. (NYSE: JPM), after saying that he needs more time to interview witnesses and to collect documents from federal regulators.

Examiner Joshua Hochberg asked to keep parts of the report confidential when it’s filed on November 1^st. Judge Mary Walrath approved the extension on Friday in a hearing in Wilmington, DE. Walrath had appointed Hochberg in July to investigate Washington Mutual’s plan to settle various lawsuits against JPMorgan Chase & Co. (NYSE: JPM) and federal banking regulators. Washington Mutual was seized by JPMorgan in 2008 for $1.9 billion.

Former shareholders of Washington Mutual oppose the settlement, saying that the lawsuits related to the failure of the bank could bring in $30 billion, enough to pay the company’s debt in full, leaving money for shareholders. The FDIC and JPMorgan Chase & Co. (NYSE: JPM) disagree, who say that there will be nothing left for shareholders when the company finishes liquidating.

Hochberg is charged with investigating claims that JPMorgan Chase & Co. (NYSE: JPM) and the FDIC colluded to buy Washington Mutual at a discount. JPMorgan is also accused of using confidential information to bring down Washington Mutual’s stock price before the company collapsed.

As part of the proposed settlement, Washington Mutual agreed to drop any legal claims against JPMorgan and the FDIC over the bank’s seizure.

JPMorgan Chase & Co. (JPMorgan Chase) is a financial holding company. JPMorgan Chase’s principal bank subsidiaries are JPMorgan Chase Bank, National Association (JPMorgan Chase Bank, N.A.), a national banking association with United States branches in 23 states, and Chase Bank USA, National Association (Chase Bank USA, N.A.), a national banking association that is the Firm’s credit card-issuing bank. JPMorgan Chase’s principal nonbank subsidiary is J.P. Morgan Securities Inc. (JPMorgan Securities), its United States investment banking firm. Its activities are organized into six business segments: Investment Bank, Retail Financial Services (RFS), Card Services (CS), Commercial Banking (CB), Treasury & Securities Services (TSS) and Asset Management (AM). Its wholesale businesses comprise the Investment Bank, Commercial Banking, Treasury & Securities Services and Asset Management segments. Its consumer businesses comprise the Retail Financial Services and Card Services segments.

Shares of JPMorgan Chase & Co. (NYSE: JPM) traded down 0.85%, ending the week at $39.76.