SEATTLE, Dec. 12, 2011 /PRNewswire/ -- Washington Mutual,
Inc. (Pink Sheets: WAMUQ.PK) ("WMI" or the "Company") today
announced that the Company and certain significant parties in the
Company's chapter 11 proceedings (including the Official Committee
of Equity Security Holders (the "Equity Committee")) have reached a
comprehensive settlement of the disputes that the Company and the
settling parties believe facilitates the filing of, and
confirmation of, the Company's Plan (as defined below).
In connection with the foregoing, and in accordance with chapter
11 of the United States Bankruptcy Code, the Company and WMI
Investment Corp. (together, the "Debtors") filed the Seventh
Amended Joint Plan of Affiliated Debtors (as amended, modified or
supplemented from time to time, the "Plan") and a related
disclosure statement for the Plan (as amended, modified or
supplemented from time to time, the "Disclosure Statement").
The Plan and Disclosure Statement were filed earlier today with the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court").
"The comprehensive settlement announced today represents a fair
and reasonable recovery for the thousands of equity holders of the
Company who have been following this case closely for three
years. The Equity Committee and its advisors are pleased with
the result and look forward to and support the swift confirmation
of the Plan," said Michael
Willingham, chairman of the Equity Committee appointed in
the Company's chapter 11 proceedings.
As more fully described in the Disclosure Statement, the Plan
largely mirrors the Company's Modified Sixth Amended Joint Plan of
Reorganization (the "Modified Sixth Plan") and is premised upon and
incorporates the terms of the Second Amended and Restated Global
Settlement Agreement (as amended, modified or supplemented from
time to time, the "GSA") previously entered into by parties
including the Company, JPMorgan Chase Bank, N.A., the Federal
Deposit Insurance Corporation (both in its individual capacity and
as receiver for Washington Mutual Bank, the "FDIC"). The
Bankruptcy Court previously determined that the GSA, and the
transactions contemplated therein, are fair, reasonable and in the
best interests of the Debtors' estates.
In addition, under the terms of the comprehensive settlement
announced today, which remains subject to approval by the
Bankruptcy Court, the parties have agreed to the following:
- Upon the effective date of the Plan, reorganized WMI's assets
will consist of its equity interests in WMI Investment Corp. and WM
Mortgage Reinsurance Company, Inc. ("WMMRC").
- The reorganized Company will be funded by a $75 million contribution from certain
creditors.
- In addition, subject to execution of definitive documentation,
the parties generally referred to as the "Settlement Noteholders"
have committed to provide exit financing in the form of a
$125 million senior secured,
multi-draw credit facility to fund working capital, general
corporate purposes and eligible originations and
acquisitions.
- The majority of the common equity in the reorganized Company
will be distributed to the Company's current preferred and common
equity holders in accordance with the Plan and as described in the
Disclosure Statement. The reorganized Company's board of
directors will, initially, be composed of four members selected by
the Equity Committee and one member selected by the lenders under
the credit agreement.
- As in the Modified Sixth Plan, the Plan provides for the
establishment of a liquidating trust (the "Liquidating Trust") for
the benefit of holders of allowed claims against the Debtors.
The Plan contemplates that the Liquidating Trust will be
capitalized with an initial budget of between $50 and $60 million, a significant portion of
which will be available to pursue litigation as described in the
Plan. Consistent with the opinion issued by the Bankruptcy
Court in relation to the Modified Sixth Plan, the Plan incorporates
modifications to resolve certain governance issues related to the
Liquidating Trust, including the management and prosecution of
certain claims and causes of action transferred to the Liquidating
Trust by the Debtors.
WMI issued the following statement:
The proposed settlement agreement represents a positive step
toward completing the Chapter 11 process. WMI has worked
closely with all significant creditor groups and the Equity
Committee to achieve a plan that will result in the distribution of
over $7 billion to the estate's
parties-in-interest upon confirmation and approval by the
Bankruptcy Court. WMI believes that the value of the estate
and recoveries for its creditors will be maximized by the
implementation of the Plan.
WMI has requested, and the Bankruptcy Court has agreed, to
schedule a hearing at 2:00 p.m. (EST)
on January 11, 2012 to consider
approval of the Disclosure Statement. Following approval of
the Disclosure Statement, WMI will ask the Bankruptcy Court to
schedule a hearing in mid-February to confirm the Plan. The
Company hopes to emerge from chapter 11 by the end of February.
Additional details regarding the settlement agreement are
available at www.kccllc.net/wamu.
SOURCE Washington Mutual, Inc.